CIPD responds to the Chancellor’s budget measures on pay and jobs

In response to the Chancellor’s 2022 growth plan, Ben Willmott, head of public policy at CIPD, the professional association for human resources and human resource development, commented:

Regarding the Energy Bill Relief Scheme:

“The Energy Bill Relief Scheme will help many businesses continue to be viable through the winter and will no doubt save thousands of jobs. However, it is crucial that the Government stands ready to extend these beyond the first six months and provide targeted support to employers who are most under pressure if energy costs remain very high or continue to rise. As we learned on the holiday, it is important for companies to have a clear, timely view of what support is available to them so they can make the right decisions for their business and avoid unnecessary downsizing.”

To secure growth through tax cuts:

“The government cannot expect tax cuts alone to boost overall economy growth. A broader plan is needed to increase business productivity through key reforms in skills and other policy areas that can boost employers’ investment in training, people management skills and new technologies. Reforming the failed apprenticeship levy and working with regions to radically improve locally provided business support services would be good starting points.”

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When reversing the employer’s NIKS increase:

“The government’s decision not to go ahead with planned increases in employers’ social security contributions is welcomed by many employers. We urge employers to reinvest these funds wherever they can in supporting their employees during this difficult time. Some employers have already told us that they intend to use the money that would have been spent to support their employees during the cost-of-living crisis. For example, by funding a higher salary increase, a one-time cost-of-living bonus, or other financial welfare benefits such as an increase in employer contributions to retirement benefits.”

To remove the banker bonus cap:

“At a time when so many people’s wages and income are lagging behind inflation, the decision to lift the cap on bankers’ bonuses is unlikely to be understood or accepted except for the few who will benefit directly. There are also questions about its effectiveness as a means of boosting performance and growth, and whether the behavior it encourages could reignite the kind of risk-taking among financiers that led to the financial crisis. Instead of rewarding the few, companies should think about how to increase wages and rewards for all of their employees.”

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On measures to get applicants back to work:

“The announced tailored support to help beneficiaries get back to work and earn more is positive. However, the government needs to recognize that many people who are looking for work or want to earn more money need access to flexible jobs, for example if they have caring responsibilities or health problems. Evidence shows that working parents, carers and older workers particularly value and are more likely to need flexible working, underscoring the importance of government honoring its earlier commitment to help create more flexible workplaces. Any measures designed to encourage people to seek work or earn more would need to be proportionate and take into account the individual circumstances of the applicants.”

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To review the Rules of Procedure:

“It is important that any forthcoming corporate regulation review to which the Chancellor is alluding does not include plans for unnecessary labor law tinkering. The UK is already one of the least regulated labor markets among developed economies, with a high proportion of permanent workers and below average unemployment. Business surveys consistently show that most employers, including SMEs, do not see employment regulation as a major impediment to growth and are therefore unlikely to welcome or benefit from legislative changes in this area.

“A more productive first step for the government would be to honor previous commitments to improve labor market enforcement and support the creation of more flexible jobs. These changes would help raise overall employment standards, create better quality jobs and underpin the growth spurt.”

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