This month has seen the appointment of a new Prime Minister after Liz Truss won the leadership contest for the Conservative Party following the resignation of Boris Johnson. Throughout the race she declared a number of proposals to deliver when in office, but what does this mean for employment and companies?
It’s been a tough couple of months for the employment sector with worker’s strikes, redundancies, and a record number of job vacancies. The cost of living crisis is also inevitably on the minds of many across the UK. So it’s no surprise that finances is top of Truss’ list, but there are a number of other matters to bear in mind too during her tenure at Number 10.
Her main economic priority is to cut taxes to help with the burden of rising energy bills and reboot the economy. As part of this pledge she has promised to reverse the increase in national insurance which came into force earlier this year. It’s also announced that a scheduled rise in corporation tax will be scrapped, with the original increase going from 19% to 23% in 2023. Instead £30billion of tax cuts will be put in place to help with the struggling economy.
VAT is also a topic up for discussion too with it being potentially cut by 5%, or alternatively income tax as a whole being reduced to help with household budgets. Of course, moves like this don’t just happen easily and it’s reported that these plans would be funded by delaying the repayment of post-Covid debts and also by fiscal headroom. On the downside, these tax cuts will do little for the country’s productivity growth when looking at skills, investment in infrastructure and other forms of capital.
Another notable movement in the last year was that manual jobs in areas such as farming have suffered following Brexit. Therefore, Truss has announced a short-term extension of the seasonal agricultural scheme which means that foreign workers will be able to work in the UK for summer agricultural jobs. Speaking of Brexit, trade unions have asked her to open up about her plans for workers’ rights after it was reported she is looking at restructuring employment laws. This would include reviewing a revision of the 48-hour working week which was taken on as part of the working time directive from the European Union.
As we have seen strikes across the board from those in aviation, law and rail workers, there are also growing pressures to resolve these ongoing moves. This is particularly evident as we head into winter with more threats of industrial action from a number of sectors. The ongoing effect of transport strikes means that it’s making commutes into work more difficult, especially for those who can’t drive, and Truss says that she will propose new laws to make it more difficult to call strikes and will “guarantee minimum levels of service are maintained on public transport.” This could mean that the threshold for strike action could be raised by limiting the number of strikes that unions are able to carry out based on the number of backing votes they have received.
It’s understandable that with a long-term recession on our hands there is much debate about how the country moves forward, especially with a new leader. Many industry insiders are saying that a priority for the new Prime Minister is to help workers and businesses through the cost of living crisis with effective and targeted support as we head into the colder months.
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