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Ian Brinkley
Economic Advisor
Ian Brinkley

Comment on the Queen's Speech

Authors: Ian Brinkley

04 June 2014


The Queen’s Speech announces a number of measures to be wrapped up in a “Small business, Enterprise and Employment” Bill.  These are a restatement of general objectives that government policies were pursuing anyway such as improving access to finance and to public procurement contracts for SMEs and regularly reviewing “red tape” so that it can be cut or made effective.

Legislation to impose stronger penalties on employers who underpay the National Minimum wage fulfils a clear government commitment. The NMW will only have credibility if it is properly enforced and increasing penalties for the small minority of employers who deliberately underpay is an important part of ensuring enforcement is effective. However, it is not a panacea – making sure there is sufficient resource and determination amongst the agencies charged with enforcing the NMW and those individuals are fully aware of their rights and means of redress are equally important.

At the time of writing we do not know for certain what the Bill will include on The bill also includes provision to tackle ling the abuse of zero hours contracts, but it is highly likely to be something  on banning the use of “exclusivity”  in zero hours contracts (when an employer can ban an employee from working for another employer even when they are offering no work themselves).

Unfortunately, the evidence base on the use of exclusivity contracts across the workforce as a whole is not robust and for zero hours contracts it is almost non-existent. Nor had the results of the BIS consultation on exclusivity and zero hours been published at the time of writing, which might shed more insights into the use of exclusive contracts and therefore how many people might be affected and whether there are any downsides.

However, it is hard to argue that in principle an employer who refuses to supply work under a zero hours agreement should not be able to stop that individual working for another employer. The Coalition has not however followed the Labour Party in restricting the use of zero hours contracts (my comments on the Labour Party’s proposals are here).

It was very welcome to hear apprenticeships mentioned in the Queens’s speech and great news that we are likely have 2 million new apprentices by the end of this parliament. However, we need to ensure that growth in the numbers is combined with a focus on rising quality and ensuring they function properly as a pathway into to work for young people. So far too much of this growth has been concentrated in Level 2 apprenticeships with limited off the job training, and has benefited existing employees and older workers, at the expense of younger new entrants to the labour market. The Government is making efforts to address these concerns and we will need to see how successful they are in due course.