The Conservative Party Conference in Birmingham this week has produced plenty of headlines about political infighting, but what about the policies?
In her conference speech today, Prime Minister Liz Truss confirmed that deregulating aspects of retained EU law would be a priority of her administration.
“By the end of the year all EU red tape will be consigned to history,” she said. “We will ensure regulation is pro-business and pro-growth”.
What does this mean for employers? We look at seven areas of employment law the government could have in its sights.
More or less immigration?
Early into her new premiership, prime minister Liz Truss indicated that she planned a review of the UK visa system to tackle labour shortages, potentially making changes to the shortage occupation list and lifting a cap on seasonal workers.
At this week’s conference home secretary Suella Braverman appeared to contradict this pledge, claiming she would aspire to cut net migration to the tens of thousands.
“In the 90s it was in the tens of thousands under Mrs Thatcher – net migration – and David Cameron famously said tens of thousands, no ifs no buts,” she told the conference.
“So that would be my ultimate aspiration but we’ve got to take it slowly and we’ve got to go incrementally.”
She added she would like to “substantially” reduce the number of students coming into the UK and the number of people coming in on work visas or who are dependents of employees coming in on work visas.
The UK government has already introduced a raft of new routes into the UK this year in a bid to attract the “brightest and the best” to work in the UK.
Scrapping GDPR
As part of plans to scrap much EU retained law, digital and culture secretary Michelle Donelan said the UK government would scrap the General Data Protection Regulation, or GDPR.
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GDPR was introduced in 2018 as an EU-wide data privacy regime applying to all businesses across the EU and European Economic Area. The government intends to replace it with “our own business and consumer-friendly” data protection regime, according to Donelan, to avoid being “shackled by lots of unnecessary red tape”.
Labour MP Chris Bryant called the plans “madness”, pointing out that UK companies would still have to abide by GDPR if they wanted to offer online business in Europe, and it would potentially increase costs for businesses to comply with a new law.
Removing reporting requirements
One of the early conference announcements came from the Prime Minister’s office, indicating that the government would exempt companies with fewer than 500 employees from obligations such as gender pay gap reporting and executive pay ratio reporting. The current threshold is 250 employees, and the government hinted the cut-off could go as high as 1,000 employees “once the impact of the current extension is known”.
TUC general secretary Frances O’Grady said that removing the requirement to report gender pay figures for thousands of companies would “risk turning the clock back for women at work”.
Diluting employment rights
New business secretary Jacob Rees-Mogg has plans to take away certain employment rights for people who earn more than £50,000, according to reports in the Financial Times.
According to sources quoted in the FT, Rees-Mogg wants to introduce no-fault dismissals for higher earners, as well as remove current rights that enable agency workers to become permanent employees.
However, the source said the proposal was one of “several unworkable and half-baked ideas” that Truss had rejected, so it remains to be seen if it will come to fruition.
Flip-flopping on tax
After announcing that the 45% rate of tax for those earning more than £150,000 would be scrapped in last month’s mini-budget, chancellor Kwasi Kwarteng performed a U-turn on the policy at this week’s conference, calling it “a massive distraction”.
The pound plunged against the dollar following the announcement of as yet unfunded tax cuts, and it is thought the initial policy is unlikely to have succeeded in a House of Commons vote. Kwarteng said the about-turn on the policy would “allow us to focus on delivering the major parts of our growth package”.
However, the government will continue with plans to cut the basic rate of income tax by 1p and cancel the 1.25% increase in national insurance contributions for the Health and Social Care Levy.
IR35 reforms reversed
Tucked away in last month’s mini budget was an announcement that reforms to off-payroll working rules, which only came into force in the private sector in 2021, would be repealed in April 2023.
This means that from 6 April 2023, contractors working for an organisation via an intermediary will be responsible for determining their employment status and paying the appropriate amount of tax and national insurance contributions, rather than their employer.
When the reforms were introduced, the government claimed they would help claw back millions in “disguised employment” tax revenue where employers were describing staff as self-employed when they were actually engaged on similar terms to their permanent workforce.
The Treasury says repealing the rules will free up time and money for businesses that can be put towards other priorities.
Changes to working time rules
Even before her formal handover as new leader and Prime Minister, reports in early September suggested that the UK’s Working Time Regulations – derived from the EU Working Time Directive – could be in Truss’ sights.
While further confirmation of these plans is yet to emerge, reports at the time indicated that the government will review the EU legislation, which imposes limits on weekly working hours, although employees can opt out of this cap.
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Certain working time rules also govern employees’ rights to take breaks and how much paid holiday they are entitled to, which could also be included in the review.
