By David Banks, Public Affairs Officer - CIPD, @DC_banks
The Queen has unveiled the Coalition Government’s legislative agenda for the ensuing parliamentary session; the last Speech prior to the 2015 general election. Although many of the 11 Bills to go before the House had been previously trailed in the media and by politicians, the Coalition was keen to ‘call time’ on criticism that the next parliamentary session would be a ‘zombie Parliament’ with little or no legislation going through the House. So what do the Bills announced in the Queen’s Speech mean for employers, employees and the world of work?
Centre-stage of this year’s speech were the Government’s reforms to Defined Contribution pensions previously announced in the 2014 Budget (Pensions Tax Bill), and proposals to boost the creation of Collective Defined Contribution and Defined Ambition pensions schemes (Private Pensions Bill). The former proposal, which allows employees to have greater control and access of their Defined Contribution pensions and will allow individuals aged over 55 to draw-down their savings as and when they wish, breaks the reliance on buying annuities and has been broadly welcomed by the pensions industry (other than those in the annuities industry, unsurprisingly). The Government is currently consulting employers, employees and representatives on this issue, to which the CIPD will be responding. As always, the devil will be in the detail: who should provide the pre-retirement advice and guidance is expected to be a source of contention.
The Private Pensions Bill is intended to provide individuals with wider choice when investing in a workplace pension, and, to an extent, allow employees to share risk between multiple parties to increase certainty over the returns on long-term retirement investment. Shadow Work and Pensions Minister Rachel Reeves MP spoke favourably about the use of Collective Defined Contribution pensions during a recent panel discussion at the Resolution Foundation; a ‘One Nation’-style pension scheme, if you will.
However, the inclusion of both the Pension Tax Bill and the Private Pensions Bill in this year’s Queen’s Speech do appear to juxtapose each other: on the one hand, the Government wants to encourage individuals to have greater control over their retirement income, and on the other, they appear to be championing collective rather than individual pensions saving. The questions should be put: is the Government’s message rather confused as to what savers should prioritise – are we to be a nation of individual savers or a nation of collective savers?
Also worthy of note is the Small Business, Enterprise and Employment Bill, which will cover abuses of zero hours contracts, increase fines for employers who flout National Minimum Wage legislation and will ‘crack down on tribunal delays’. While increasing maximum fines for employers to £20,000 per employee is a welcome move, the finer detail of this Bill has yet to be revealed. The Government has yet to unveil how it intends to crack down on zero hours contract abuses: it is likely that exclusivity clauses will be banned (with one or two provisos) and Vince Cable MP has indicated that a ‘right to request’ more hours may be the way to go, as we previously called for.
It is also unclear as to how tribunal delays will be reduced and what this means exactly. Tribunal fees are also likely to be subject to more political football as the 2015 election grows closer. Employment regulation needs to be depoliticised and independently recommended by a Workplace Commission: constant political tussling is unlikely to be helpful for employers and employees who both want long-term certainty and security, rather than constant regulatory change.
The Government will also be introducing reforms to Apprenticeship funding, following the Richard Review and two public consultations. The reforms will enable employers to more closely align their longer-term business needs and strategy with their recruitment of apprentices, and enable training to be more responsive to employer needs. The Government’s intention to create 2million Apprenticeship starts over the course of this Parliament is noble and we welcome their proposals to reform funding, however it is vital that Apprenticeship quality is not jeopardised by any numbers game that may be afoot.
Finally: childcare. From autumn 2015 the Government will be closing Employer-Supported Childcare schemes to new entrants, replacing the scheme with Tax-Free Childcare which will extend support to all working parents and reduce the role employers play in childcare provision. The Childcare Payments Bill will mean that working parents do not have to rely on working for an employer who offers a childcare scheme to receive childcare funding. Up to £2,000 per year per child will be made available to parents (so long as they are in work and not in receipt of tax credits or Universal Credit). The timescale for implementation of this scheme is ambitious and it is paramount that the changes are communicated not only to employees but also to employers who may be faced with the prospect of operating two childcare schemes in tandem, as Employer-Supported Childcare is phased out and the new scheme phased in. However, before HMT and HMRC communicate the intended changes, we must first await the outcome of the further consultation on the provision of childcare accounts.
Perhaps most telling, however, was the phrase: “Other measures will be laid before you”. There may well be life in this zombie yet…
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Er, what employment tribunal delays? And how will it make any difference to increase the maximum NMW penalty even further? Only a tiny proportion of those caught by HMRC pay anywhere near the current maximum. As for zero hours, key problem is that, while ET fees remain, a R2R a fixed-hours contract from an *exploitative* employer is as good as worthless. And everyone says it is the abusive use of ZHCs by exploitative employers, not ZHCs per se, that is the problem.
4 Jun, 2014 14:27
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