My blog

Tag: Government Policy

  • Opinion: On the Workers’ Rights Bill, it all comes down to the detail

    Workers’ Rights Bill, it all comes down to the detail. Finito World

     

    As the new government takes shape, we are beginning to get a sense of the direction and possible meaning of the government. One of the themes that’s already emerging is a split between Rachel Reeves‘ careful approach at the Treasury, and the more gung-ho language coming out of the Deputy PM Angela Rayner’s office.

    Once again, a General Election has proven to be of limited utility when it comes to the crucial question of what an incoming government will actually do. This is certainly the case on the mooted Workers’ Rights Bill.

    For a start, there is little clear language on the flexible working position, and much of the public discourse falsely implies that employees can’t already request flexible working. They can. In addition, employers already have several possible reasons under law to reject the request – this fact also gets very little airtime.

    So what did the Labour Manifesto say? It said that any Starmer administration would look at the possibility of enshrining in law the notion of employees being able to ask for flexible working from day one. So far, there is no indication that the Government will change the position to a four-day working week being the norm or that the reasons to refuse a request will change.  That hasn’t stopped much hyperbole around the four-day working week.

     

    As usual, it will all come down to the detail, and sources say that it is likely that Reeves will get her way, and that little will be done to agitate business. But in the event that the four-day week did happen, there are a range of issues which will need to be looked at including: ensuring adequate client service, adequate staff supervision, ensuring the health and safety and preventing burn out, reducing errors and managing asynchronised working.

     

    Where the government looks set to be more radical is on the question of unfair dismissal. If it becomes possible to claim this much earlier during the cycle of employment, then businesses may have a genuine headache when it comes to avoiding claims. It will certainly increase the pressure on businesses to have a fair reason and follow a fair process to dismiss employees. The likely result is cost to business – again, something which Reeves’ language would suggest she wouldn’t like to see.

     

    Melanie Stancliffe of Cripps tells us: “We expect an explosion of claims – the previous increase in the qualifying period for unfair dismissal claims shrank claims (and raised access to justice issues).” That sounds like something which may alienate the City.

     

    This brings us to another likely result of the legislation. “Companies need change contracts and policies when the detail is known. They will need to implement the policies, train on them, anticipate and manage claims effectively, change business practices.”

     

    It is early days and the detail on Workers’ Rights policy may change things. But what won’t change is that Labour is already at loggerheads as to precisely the sort of government it wants to be.

     

     

     

     

  • The civil service is a ‘truly fantastic profession’: Sir Philip Rutnam

     

    Sir Philip Rutnam

     

    I worked in the civil service from 1987 until 2020; I began by working in the Treasury and my initial expectation was exceeded in terms of the interest in the work and responsibility that I was given quite early on. There’s this erroneous idea of it being a stuffy place full of hierarchy and restrictions instead I found it was a place where you were given very clear objectives and a lot of responsibility to take them forward.

    The treasury is interesting because it’s right at the centre of government but you also realise that while the Treasury has the power to say no, it doesn’t generally have the power to make things happen: it can could refuse to provide the funding but it can’t actually usually change the system of education or healthcare.

    Did I have mentors in the early days? I had very good people responsible from management giving me direction and mentors who gave me more informal advice. Like any career you do end up having to make your own way but what’s vital is to have exposure to a range of different people who have got advice and give advice and to try to learn the best from each of them.

    When it comes to what the optimal setup is within the civil service, I definitely think you need to have people with a combination of deep specialist expertise with enough capacity as a generalist to get things done within government. In my own career I liked staying in roles for a good few years in order to try to get to grips with what was happening. By the time I was permanent secretary at the transport I feel we got the balance right.  Incidentally, I believe HS2 will get to Euston in the end – and I hope without too much delay.

    The fundamental job of the top of the civil service is to help ministers – and sometimes they will have just arrived in position – to translate their political objectives into practice. It’s a question of helping ministers identify their objectives sufficiently and then work out how they are going to be turned into reality.

    I never found it difficult to be apolitical because that’s a core part of the professional skills set. You are there to serve the democratically elected government so being impartial is a precondition for being there.

    It’s important to understand that there is an enormous variety of different things you can do in the civil service: it has about 500,000 people employed in it.   People tend to think that the civil service is all about working with ministers – somewhere between Yes, Minister and The Thick of It.  There are scientific and technical jobs of huge importance.

    In the Department of Transport working for me, there were people responsible for investigating air accidents or rail accidents; people working in and running really large operational systems like licensing drivers and vehicles at the DVLA – nearly 5000 people the single biggest employer in Swansea.   We also had really large complicated computer systems: so we had IT experts, and experts in programme and project managements.

    In fact, we had everything from policy experts through to statisticians, data scientists, social researchers, economists, lawyers, actuaries, accountants, finance experts, and specialists in estate management. This is a hugely under-appreciated: if we don’t think this message is important we won’t end up with a good civil service.

    There are also lots of different entry routes.   There are apprenticeship entry routes, and other degree entry options.   There is the fast stream with the exam, which is probably one of the smallest entry routes. You can become a specialist in HR, finance, or project and programme management or commercial management.

    The fast steam certainly means that your get more opportunity subject to performance to get promoted earlier: but once you have got to grade 7 there’s no further advantage to being on that track. It is competitive but enormous efforts are made to identity talented people from a wide range of backgrounds. It’s a fantastic profession.

     

  • Understanding the Future of the Apprenticeship Levy under the New Government

    Finito World

     

    Initially it sounds a good idea to expand the apprenticeship levy and reform it into the “growth and skills levy”. This would mean that other forms of training were now possible under the scheme, with businesses allowed to use 50 per cent of their apprenticeship funding. This is all part of a general offer to young people between the age of 18 and 21 called the ‘youth guarantee’.

    It is difficult to gauge the cost of such a move. Under the previous government, Labour’s proposals were estimated to cost £1.5 billion – and it’s not clear how it would be paid for.  At that time, the then skills minister Rob Halfon argued that it is ‘important that the apprenticeships budget remains ring-fenced for apprenticeships to ensure continued affordability of the programme”.

    The real problem is in what firms will do with the money. Some analysis points to the likelihood that firms will use the money from the new levy to cover their costs for training programmes which they would probably have paid for already. Labour stated before coming to power that it would issue a list of approved courses, but already it looks less simple to administer than the levy was before.

    The inevitable result of the new levy would be fewer apprenticeships – probably down to under 150,000 per year, a huge decrease in the number of young people having apprenticeships – but that’s only if the figure is right, since it essentially charts a situation where large employers use all their levy and use up the 50 per cent allowed for non-apprenticeship training.

    Obviously the situation would be more complex than that – and so the question comes down to the detail of how the policy will be be designed and what incentives will be built into the system. Watch this space.

     

     

  • Those Are My Principles: Michael Moszynski on Government’s Powerful Role in Fostering Innovation

    Michael Moszynski

    I am not a fan of Government trying to ‘pick winners’ in the economy (remember DeLorean?) but it does seem to me that some help to encourage people to start-up new enterprises is a good thing, especially when our economy was flat-lining in the aftermath of the financial crisis.

    Launching a new global ad agency, LONDON Advertising, two weeks after the collapse of Lehman Brothers in 2008, my partner and I received no financial assistance from the then Labour Government, so we had to risk our post-tax savings to fund our new enterprise.

    So, along with a number of other business people, I lobbied the Government for this to change and in 2012 was delighted to see George Osborne introduce the Seed Enterprise Investment Scheme to encourage investment in start-ups (the most risky stage of any business).  This was the most rewarding incentive for investors to put money into new companies anywhere on the planet.

    Unfortunately, Osbourne’s 2012 budget was overshadowed by the ‘Pasty Tax’ row and the SEIS announcement was not featured in the news.  I rang the Business Editor of the Times to complain and was astonished to find out that even he was not aware of it.  So, on the spot I made a proposal that my start-up firm would put up £100,000 to fund another start-up if the Times would cover the story.

    He got his Editor to agree, who then invited me to speak at The Times CEO Conference. This enabled me to persuade the Prime Minister, David Cameron, to announce it at a business event at No.10. The next day, the front page story of the Times Business Section led with “Clarion call for the next big thing comes all the way from Downing Street” with details of our a prize of £100,000 to fund a new digital agency and how people could apply for our Dragon’s Den-style competition.

    In fact over 1,400 people answered the call from over 60 countries, including Iraq, Moldovia and Vietnam.  The winners were two young UK graduates who had the idea of automatically turning tweets into video messaging, using tags linking specific words to relevant Getty stock footage.  To cut a long story short, our £100,000 SEIS investment helped the company secure £4m of investment to build and launch the product, making it the most funded tech start-up in Europe.

    We named it “Wordeo” and in its first week it secured more users than Snapchat did in its first six months.  Unfortunately, whilst hundreds of thousands of people tried Wordeo, it did not achieve ‘product market fit’ so we did not get the repeat business to fuel our ‘rocket’.

    But our initiative did help promote SEIS and the early stage investors in Wordeo benefited from up to 78% tax rebates on their losses.  Since 2012 over 53,000 new businesses have used the SEIS scheme, generating over £50b of new investment in the UK, many of which have found long-term success.

    So, whilst any dream of becoming a tech billionaire was put on ice, it was fortunate to still have the day job of running the ad agency, which we had built to become a robust business.

    The challenge running a small to medium sized business is how can the Founders be rewarded for all their investment, risk and hard work and reward their staff without selling out to a bigger company?

    Well, in 2014 the Conservative Government introduced Employment Ownership Trusts (EOT), with the objective of helping to create more employee-owned businesses.

    For the owners, it means they can take any unpaid dividends and future profits (to the value of the business) without paying any income or capital gains tax.  Plus they can continue to run the business without working for a new boss.  For the employees, there is absolutely no downside – and they even can access a tax-free bonus whilst the Founders are being paid out of the profits.

    Once the Founders have been paid, the Trust can issue the profits as dividends to the staff. Or, if the company is sold in the future, then the value is shared out between the employees. And for the business, it has a brilliant mechanism to attract and retain great staff, retain its independence and create a true legacy for its founders.

    My partner and I sold 100% of our shares to our own EOT (you can choose the amount with a minimum of 51 per cent) in 2018 and last year completed our five-year earnout period.

    We survived a terrible time under Covid when we lost 80 per cent of our revenue in one month and in our recovery plan set out financial targets which we have met and allowed us to pay all our staff a one month bonus at year end.  As I explained to our team at our end of party, if we achieve the same result over the next three years my partner and I will have had the value of our shares paid off and the value of their bonus in year three will be worth a year’s salary each.  You could describe it as the ultimate win-win.

    The third area which I believe this Government has helped successfully grow is our tech sector, which is now the third largest in the world, with our tech startups valued at £996 billion.  This is the result of the quality of our educational institutions, the ingenuity of our entrepreneurs and underpinned by the SEIS scheme. As we have seen with the recent Microsoft announcement of its £2.5 billion European AI hub in the UK, we are well placed to embrace the benefits of AI.

    I believe Rishi Sunak is correct to identify that the UK can take a leadership role in the technology which will help us grow our productivity.  Only by growing our economy will we be able to fund services to help the less fortunate in society. I am witnessing AI’s impact through my advisory role with one of the world’s most successful AI companies. This business is dramatically changing the financial performance – and significantly reducing the carbon footprint – of many of the world’s most energy-intensive businesses.

    Of note this is a US company that decided to co-locate in London. This is another win-win outcome that can in time be extended to all sorts of business activity and help not just make more profits, allowing for more investment and jobs, but also make the world a greener place.

    So in conclusion, whilst I believe Government should not be a crutch that businesses rely on to support them, I do believe Government can help create a positive environment to help unleash the country’s entrepreneurial potential.