The REC is understandably delighted that George Osborne has reversed part of the plan to increase National Insurance Contributions. They had opposed the move, as had all business bodies, as the potential cost would have prevented the jobs market recovering fully from the recession.
The British Chamber of Commerce also see this news as a positive step but feels that, instead of just a partial roll-back, the government should scrap the entire rise.
The PCG was also relieved when the Speech outlined plans to simplify the tax system. The group has long been campaigning for the abolition, or at least simplification, of the IR35 legislation.
Another item in the Queen’s Speech that has caused comment is the plan to cap the number of non-EU economic migrants that are allowed to come to the UK to work.
According to Dr John Philpott from the CIPD, this could prove a risky measure. He pointed out that we already have a points based system that prevents non-EU, unskilled workers from entering the UK.
His primary concern is that an additional cap could bar entry to the skilled migrants that are needed by some UK employees. The UK still suffers severe skills shortages in certain sectors and unless the coalition can guarantee to meet this need, without bringing in foreign workers, we could see higher wages and higher prices that would hamper the economic recovery.
Brendan Barber from the TUC welcomed some of the issues that were mentioned in the Queen’s Speech, such as restoring SERPS and the extension of flexible working rights.
However, he says that scrapping the initiatives that have helped young people secure employment and throwing public sector employees out of work will only hamper the economic recovery. He believes that instead of concentrating on debt reduction, the coalition should be focusing on restoring growth and getting the unemployed back to work.
© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.
Image: It’s a kind of magic… Maaaagiiiic! by LordFerguson
