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Will the changes in Westminster impact businesses and employment?

We now know that Boris Johnson is standing down as the leader of the Conservative Party following mass resignations from both cabinet members and ministers. We are also seeing changes being made to who occupies which cabinet roles as well as within government departments, and no doubt, we can expect further changes in the future, not just in terms of who will form the new cabinet, but government policy, when a new Prime Minister is appointed.

So, what does this all mean for employers and employment generally? Well, it may seem like events in Westminster are far away, but when a new Leader and cabinet are formed, it will no doubt influence how businesses operate, as this article sets out.

Could the forthcoming increase in corporation tax be pulled?

Under the previous Chancellor, government economic policies included a rise in corporation tax from 19% to 25%, which is currently due to come into effect from 1 April 2023.

This announcement naturally would have had a bearing on businesses setting their budgets given the increase in costs that will be expected from next year. In turn, this would then influence employment policies, especially those relating to pay and reward.

Will we continue to pay towards a Health and Social Care levy?

A controversial government policy was to continue with the national insurance increase as part of the creation of the new health and social care levy. At the time of its introduction, many employers, professional bodies, as well as political parties were calling for it to either be delayed or pulled entirely given the current cost of living crisis.

In Boris Johnson’s speech yesterday, he said that the next Prime Minister should be equally committed to cutting burdens on businesses and families, including cutting taxes. Whether the new Prime Minister and Chancellor will change policy around the health and social care levy, or in fact, other taxes, is unclear, but we could well see a change in direction over the coming months.

How the government will manage its economic policies will ultimately impact how businesses can operate and will therefore have a direct impact on human resource planning and policy development As a result, it could affect how employers recruit or engage, and retain their employees.

The next few months will be important to all businesses, especially leading up to setting budgets for the 2023/2024 financial year and when they start to think about their strategic business plans going into 2023.

The Employment Bill and Bill of Rights

Both the Employment Bill and Bill of Rights have been in the pipeline for some time. The former was announced in the Queen’s Speech back in 2019, and introduced new employment rights around neonatal leave, carer’s leave as well as other important changes.

However, since the pandemic, there has been no further news around this. We will have to wait and see whether the new Prime Minister and their government look to progress these matters as they begin to look at policy areas moving forward.

There is also a Bill of Rights currently progressing through the House of Commons, and then on to the House of Lords. This Bill will replace the Human Rights Act, and impact employment in several ways. For example, how employees use social media outside of the workplace and at what point can an employer act when there is a link of their social media usage to the workplace.

Or it may be, that we see the reintroduction of the requirements for vaccinations in certain sectors. Again, there is a fundamental human right to choose whether to become vaccinated or not.
It is still early days in the development of the Bill of Rights, but with a new Prime Minister and government, it is unclear where this would be as a priority moving forward.

How can we help?

If you would like HR support whether this is on general help and advice, or in helping you develop your strategic people plan for next year, then do get in touch with us and we can help support you. Contact HR Solutions on 0844 324 5840.

On 27 September 2022, HR Solutions is holding a workshop on ‘Your People Strategy in a Day- How to Transform Your Organisation’. This workshop will help business owners and HR team members to successfully plan your people strategy to give you the tools to maximise the potential from your people, in the midst of potential economic changes that impact your business.

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