Commenting on the speech, Chris Jones, Chief Executive of the City & Guilds Group said: “If we really want apprenticeships to be seen as a credible and valuable route to a career, we desperately need to see stability in the system. Too much to-ing and fro-ing on the policy around apprenticeships only serves to confuse people.
“We know businesses can benefit from taking on apprentices, particularly with ever-increasing skills gaps but things keep changing around apprenticeship policy. For employers and young people alike this only causes confusion. We should be making the system easier to navigate, not harder. We need a strong, stable, consistent system that meets the needs of young people, employers, and our economy.”
City & Guilds also believes that to ‘continue to deliver the best schools and skills for young people,’ and to succeed in reaching the target of two million apprenticeships, ineffective careers advice needs to be dealt with. Recent research from the City & Guilds Group found that only 25% were informed about apprenticeships, compared to 44% of degrees.
Charles Cotton, Performance and Reward Adviser at the CIPD, comments: “Giving employees greater choice over what they do with their pension pots is to be welcomed, but it will be vitally important to ensure that people are made aware of the potential consequences of drawing down their pensions as they wish. Individuals need first and foremost to plan for a sustainable retirement, and avoid making decisions that could jeopardise their financial security when they stop working. It will therefore be important for savers to be given access to independent and objective advice before the point of retirement, so that they are well informed about the options available to them and how they stand to be affected.”
The CIPD also welcomed plans to tackle abuses of zero hours contracts, included in the Small Business, Enterprise and Employment Bill.
Ben Willmott, Head of Public Policy at the CIPD, comments: “CIPD research into zero hours workers shows that while, overall, zero hours workers enjoy similar levels of job satisfaction to other workers and report better work-life balance and less stress, there are significant areas of bad practice which should be addressed. For example, nearly half of zero hours workers have had work cancelled on them with no notice, while a quarter say they are never or only sometimes allowed to work for another employer when their primary employer has no work available for them.”
The Government has yet to unveil how it intends to crack down on zero hours contract abuses, with the official response to the Department for Business’ consultation expected to be announced over the next few months.
The CIPD is calling for government to:
- Ban the use of exclusivity clauses in zero-hours contracts unless there is a compelling and justifiable business reason for their use
- Introduce a right for zero-hours workers to request a minimum number of hours per week after 12 months of employment
- Amend the Employment Rights Act 1996 to ensure workers are entitled to written terms and conditions no later than two months into employment
- Support the creation of a code of practice on the use of zero hours contracts
On Apprenticeships, Katerina Rudiger, Head of Skills and Policy Campaigns at the CIPD, comments: “The need for greater Apprenticeship provision in the UK is clear. The ambition to deliver two million Apprenticeship to start over this Parliament is an admirable ambition, and we welcome the Government’s success in delivering so many new starts to date However, looking ahead, it is vital to continue to ensure that Apprenticeships are high-quality and responsive to the needs of employers. This will mean continuing to engage employers in developing training programmes for each of the Apprenticeships frameworks, giving them the level of co-investment and the impetus they need to ensure the training their apprentices receive benefits their organisation and the apprentices themselves. It will also be vital to ensure smaller employers are encouraged to provide more high-quality Apprenticeships, and given the information and support they need to do so.”
Employment lawyer and partner at Bird & Bird LLP, Warren Wayne, comments: “While it is important to ensure that employers are not using zero-hours contracts as a way to avoid paying the minimum wage, it also has to be recognised that zero hours contracts provide a useful mechanism for businesses to operate a flexible and efficient workforce. They enable workers to find paid work, in circumstances where they may otherwise have been unable to. The Government needs to ensure that it does not discourage the appropriate use of zero hours contracts and that it focuses on protecting workers from employers who might try to abuse them.
“Any changes in the law need to be of benefit to both employers and employees. There will need to be a balance between banning exclusivity clauses in zero hours contracts, so that workers are free to increase their income by working elsewhere, and ensuring that staff are available to work where businesses need them. Banning exclusivity clauses completely is likely to significantly reduce the use of zero-hours contracts, which is not ultimately beneficial to either employees or employers who value or need the flexibility and efficiencies they can bring.”
Commenting on the Queen’s Speech, Darren Philp, Head of Policy at The People’s Pension said: “The pensions landscape in the UK has changed dramatically in the last few months. The changes to reform how people take their pension income will encourage more people to save for their retirement, which is vital given current low rates of saving.”
“For far too long, people have been put off saving for their retirement by the restrictive and archaic rules of what they can do with their own money when they come to retire. Building on the reforms to the State pension system and the introduction of auto-enrolment, the Government’s reforms will really make it worthwhile for people to save for their old age.”
“It is also a positive step that the Government is looking to legislate to allow for collective pension schemes. For too long Government regulation has stifled innovation and this change opens up the opportunity for the creation of new products. Pensions will no longer be pigeon holed into defined benefit or defined contribution. It will be interesting to see if employers want to offer these types of products to their employees.”
“While collective arrangements can lead to higher returns, the danger is that if not done carefully then they can create a false expectation of certainty. Who can predict what will happen in the next 5 years, let alone the next twenty or thirty years? We need to make sure that these schemes don’t over promise only to then under deliver”.
“The increased flexibility in the overall regulatory landscape has to be a welcome step forward and in the long term will make it easier for pension schemes to provide solutions that really help people in retirement.”
Nigel Bolton, Pensions Partner at national law firm Irwin Mitchell, said: “Whilst the collective defined contribution (CDC) announcement is eye-catching again, the devil will be in the detail. Will, for example, the 0.75% charge cap which will apply to defined contribution schemes for auto-enrolment purposes be applied to CDCs? Caution is also required when predicting the impact on the size of the eventual pension pot, returns are always subject to performance of the underlying investments and there is no guarantee for members they will receive their target pension. Investment volatility for members would undoubtedly be much reduced, but most of this will already be achieved by the pension reforms announced earlier this year at The Budget.
“Additionally, there is a big question mark over whether employers would want them. Many employers have just gone through the time consuming and costly process of putting in place auto-enrolment schemes. Whether these schemes become popular will would certainly depend on the amount of regulation around their introduction.
