CIPP Policy Update - July

3 July 2017

Adviser Introduction

The general election has been and gone and while the conservative party lost their overall majority, Theresa May continues to lead while negotiating for the support of the Democratic Unionist Party, which is needed for a minority government.

With less pomp and ceremony as usual the Queen's Speech has taken place, which marks the start of the Parliamentary year and has added resonance after a change of government, with the contents of the Speech highlighting the priorities of new ministers and setting the scene for Parliamentary battle ahead.

It comes as no surprise that the priority for government is to secure the best possible deal as the country leaves the European Union. A bill is to be introduced to repeal the European Communities Act and provide certainty for individuals and businesses. This will be complemented by legislation to ensure that the United Kingdom makes a success of Brexit, establishing new national policies on immigration, international sanctions, nuclear safeguards, agriculture, and fisheries.

A priority will be to build a more united country, strengthening the social, economic and cultural bonds between England, Northern Ireland, Scotland and Wales. The Queen said that her government will work in cooperation with the devolved administrations, and it will work with all of the parties in Northern Ireland to support the return of devolved government.

Further progress is to be made to tackle the gender pay gap and discrimination against people on the basis of their race, faith, gender, disability or sexual orientation. There will be enhanced rights and protections in the modern workplace and the National Living Wage will be increased so that people who are on the lowest pay benefit from the same improvements in earnings as higher paid workers.

Minimum wage

On the topic of minimum wage, one of the consultations that the CIPP Policy team is involved with every year is the Low Pay Commission's (LPC) call for evidence on the impact of the National Minimum Wage (NMW) and the National Living Wage (NLW) rates.

The LPC is the independent body that monitors the impact of the minimum wage and they are seeking evidence of the impact of the most recent increases to inform thinking about future upratings. The LPC undertakes consultation on the effects of the minimum wage each year with a view to building the evidence base and providing recommendations to government. It is then up to the government as to whether they accept or reject the LPC's recommendations.

The LPC are particularly interested in evidence of the impact of past increases in theNLW (both the 2016 introduction and the latest April 2017 increase) on workers, employers, the labour market and the economy – including how firms are adjusting and impacts on pay, terms and conditions, income, hours, employment, investment, productivity, prices and profits.

The LPC are also looking for evidence on the economic outlook following the vote to leave the EU (including effects on the labour market and workers such as a weaker currency, higher inflation, and possible changes to labour supply):

  • views on the affordability and effects of possible future increases, particularly for 2018.
  • other rates – those affecting workers under 25 and apprentices –in particular;
  • - evidence on the impact of the rates on younger workers' employment prospects including how widely the new 21-24 Year Old Rate is used, and what effect, if any, the gaps between the different rates have on different age groups' labour market performance
  • - arguments for and against faster increases for these rates
  • - views on the affordability and effects of possible future increases, particularly for 2018.

We are currently running a survey to gather feedback from the payroll profession and employers. Please spare around 15 minutes to complete this survey (closes on 5 July 2017).

Recording the number of hours worked on payslips

Another area of consultation we are involved in is the LPC's recommendation that employers should include in their staff's payslips the hours each worker is being paid for. The reasoning behind the recommendation is to increase transparency and information provided to workers about how their pay is calculated.

The Department for Business, Energy and Industrial Strategy (BEIS) is exploring the best way to implement this recommendation and has asked the CIPP to survey the payroll profession in order to understand whether this proposal will bring additional financial and administrative burdens. The survey will also aim to obtain a better estimate of the proposal's business impacts and benefits. The survey is aimed at employers, payroll agents and software developers.

We were running this survey in April but had to close it early due to Purdah; BEIS has now asked that we re-open the survey to gather further views.

If this is something that affects your role, please do take a few minutes to complete our survey (closes 31 July 2017).

  • Author Profile
    • Sp avatar Diana Bruce

      Diana is CIPP Senior Policy Liaison Officer and Guest Author for Smart Pension.