26th June 2010
All the latest stories from the world of work
Ed Sweeney warned that the private sector may not be yet in the clear as workforces begin to demand their ‘deferred pay’ following the recession. Speaking on the industrial relations landscape for 2010 at the IPA’s AGM, Sweeney reported that ACAS was beginning to see signs that private sector workforces that had worked closely with employers during the recession, often accepted zero pay rises and reduced working hours, were now looking for improved rewards.
Responding to Sweeney’s comments, IPA director Nita Clarke called on the Coalition government and public sector leaders to step up efforts to involve staff in redesigning services to save money and better meet citizen’s needs. Top down approaches risked industrial action and disengaging workforces, she said.
The event followed a roundtable seminar led by Ed Davis of Macquarie University, Mike Emmott of CIPD and trade union adviser John Lloyd, discussing the prospects for the public and private sector over the next 12 months, and the likely impact of the new government on industrial relations. Davis opened the session with a comparative perspective from Australia, and in particular, the prospects for the labour movement. Participants discussed the ability of the labour movement to influence the political agenda, the challenges of establishing collective forms of voice and representation in the private sector and likely areas of labour market and employment law reform under the new government.
The Coalition government’s emergency budget announced changes to taxes, welfare and departmental spending. The budget will have wide ranging implications for the workplace and workforce. Headline measures include:
Pay and taxes
- National Insurance threshold to rise from April 2011. Businesses outside the South-East to received national insurance exemption for the first ten people they employ over the next three years
- Public sector pay freeze to be extended for a further year (two year total) for all employees earning above £21,000. Employees earning below this level will receive £250 extra per year
- VAT will be raised from 17.5 per cent to 20 per cent from January 2011
Pensions and retirement
- Government to review the default retirement age and will accelerate raising the state pension age to 66
- From 2011 the basic state pension will be linked to earnings
- Government will hold a brief review on pensions auto-enrolment
Welfare
- Parents to be forced to look for work once their child reaches five years of age, or lose income support. Parents on income support currently have to find work once their child reaches ten years of age
- Those on disability living allowance to undergo medical tests for eligibility every three years
Labour market experts warned that the budget did little to support growth and job creation to compensate for the job losses expected in the public sector.
General secretary of the TUC, Brendan Barber, called the budget “dangerous and divisive”, he added; “This Budget was economically dangerous and socially divisive. The one thing we can now say is that we are very definitely not all in this together. Those on middle and low incomes have done worse than expected, and the rich have been let off much of what they feared.
“But we will all suffer from an economy that is now likely to be sluggish at best and with a double-dip recession at worst.”
You can read more about the budget at
http://www.hm-treasury.gov.uk/junebudget_documents.htm
