London branches policy meeting presentation
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Transcript of London branches policy meeting presentation
What does the new government agenda mean
for business and HR?
Mark BeatsonChief EconomistSeptember 2015
Contents
• Political context• Economy and labour market• Public finances• Europe• New government policies• What’s missing?
Political context
The government has a working Commons majority
Conserva-tives 331
Labour 232
SNP 56Lib Dems 8 DUP 8
The government lacks a majority in the Lords
Conservative; 224
Labour; 213Liberal Democrat;
101
Plaid Cymru; 2Green; 3UKIP; 3
Other; 9
Crossbench; 178
Non-affiliated; 22Bishops; 26
Economy and labour market
A more stable economic outlook?
2010
Q1
2010
Q3
2011
Q1
2011
Q3
2012
Q1
2012
Q3
2013
Q1
2013
Q3
2014
Q1
2014
Q3
2015
Q1
2015
Q3
2016
Q1
2016
Q3
2017
Q1
2017
Q3
2018
Q1
2018
Q3
2019
Q1
2019
Q3
2020
Q1
2020
Q3
2021
Q10.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
GDP growth (% p.a.)
Forecast
Source: Office for Budget Responsibility
Interest rates are not expected to rise quickly or steeply
Jan 13
Apr 13Ju
l 13
Oct 13
Jan 14
Apr 14Ju
l 14
Oct 14
Jan 15
Apr 15Ju
l 15
Oct 15
Jan 16
Apr 16Ju
l 16
Oct 16
Jan 17
Apr 17Ju
l 17
Oct 17
Jan 18
Apr 18Ju
l 18
0
0.5
1
1.5
2
Market expectations of UK Bank Rate
Source: Bank of England
Labour market expansion continues … although at a slower rate
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 202027
28
29
30
31
32
33
0
1
2
3
4
5
6
7
8
9
Employment (LHS, millions) Unemployment rate (RHS, %)
Source: Office for Budget Responsibility.
Forecast
The OBR expect wage growth and productivity to increase in the coming year
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020-4
-3
-2
-1
0
1
2
3
Output per hour Real average earnings
Ann
ual %
cha
nge
Source: Office for Budget Responsibility
Forecast
Public finances
Fiscal consolidation - more to come
1985
-86
1987
-88
1989
-90
1991
-92
1993
-94
1995
-96
1997
-98
1999
-00
2001
-02
2003
-04
2005
-06
2007
-08
2009
-10
2011
-12
2013
-14
2015
-16
2017
-18
2019
-20
-10
0
10
20
30
40
50
Expediture minus receipts (deficit) Current receiptsTotal managed expenditure
% o
f GD
P
Source: Office for Budget Responsibility
Forecast
Shrinking public sector – more to come
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-210
1
2
3
4
5
6
General government employment (millions)
Source: Office for Budget Responsibility
Forecast
Public sector employers think staff morale has fallen since 2010
All public sector Education Healthcare Public admin etc.0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
10%
24%
38%
25%
‘Compared with 2010, how would you describe employee morale at your organisation?’
Much higher Higher About same Lower Much lower
Source: CIPD Labour Market Outlook, winter 2014/15.
Europe
The Euro Zone is growing … slowly
EuroZone Germany France Italy Spain-1
0
1
2
3
4
IMF forecasts of GDP growth2014 2015 2016
% c
hang
e p.
a.
Source: IMF World Economic Outlook, July 2015
Slow growth in Europe affects the UK because of trade links
USA
German
y
Nether
lands
France
Irelan
d
Benelux
China
Italy
Spain UAE
13.2
108.5
6.9 6.14.6 4.3
2.9 2.9 2
UK top ten goods export markets, 2013 (% of total exports)
Source: Office for National Statistics
USA
Switzer
land
German
y
Irelan
d
Nether
lands
Saudi A
rabia
France Ita
ly
Japa
n
Canad
a
22.7
6.6 6.4 5.7 4.8 4.5 4.12.1 1.8 1.6
UK top ten service export markets, 2013 (% of total exports)
Labour market conditions in Europe are likely to continue to affect migration patterns
YE Jun 0
5
YE Dec
05
YE Jun 0
6
YE Dec
06
YE Jun 0
7
YE Dec
07
YE Jun 0
8
YE Dec
08
YE Jun 0
9
YE Dec
09
YE Jun 1
0
YE Dec
10
YE Jun 1
1
YE Dec
11
YE Jun 1
2
YE Dec
12
YE Jun 1
3
YE Dec
13
YE Jun 1
4
YE Dec
140~
20
40
60
80
100
120
140
160
180
Work-related migrants into UK (‘000s)EU15 EU8 EU2
Source: Office for National Statistics
New government policies
Impact of the National Living Wage?
4.2 4.6 5 5.4 5.8 6.2 6.6 7 7.4 7.8 8.2 8.6 9 9.4 9.8 10.2
10.6 11 11
.411
.80
5
10
15
20
25
30
35
40
Cumulative frequency distribution of hourly earnings in 2020Excluding NLW Including NLW
£ per hour
% o
f wor
kfor
ce
Source: Office for Budget Responsibility
Trade Union Bill 2015• 50% turnout requirement for industrial action
ballots• Additional requirement for 40% of eligible
voters to approve industrial action in “important public services”
• Extension of notice period for industrial action to 14 days; 4 month “use by” requirement
• Lift prohibition on employment of agency workers to replace strikers
• Political funds – opt-out to opt-in• End check-off in public sector; possibly restrict
facility time
Also in the pipeline …
• Gender pay gap reporting (organisations with 250+ employees)
• 3 million Apprenticeships target• Apprenticeship Levy• Skills Levy for non-EU skilled migrants• Tighter rules on migration• Integration of Income Tax and NICs• New entitlement to volunteering leave for three
days a year on full pay (public sector and large companies)
What’s missing?
What’s missing?
• Joining up skills and industrial policy• Building culture and infrastructure for lifelong
learning• Productivity in the workplace • Beecroft?
To find out more and comment
http://www.cipd.co.uk/publicpolicy/consultation-responses/default.aspx
http://www.cipd.co.uk/publicpolicy/consultations/
Mark BeatsonChief Economist, [email protected] 612 636407813923477@MarkBeatson1