The Queen’s Speech and What it Means for Businesses
This week, Her Majesty delivered the first Conservative Queen’s Speech in 19 years, with the Prime Minister calling it a ‘One Nation Queen’s Speech from a One Nation Government’. While the programme of new legislation was largely aimed at families and working people, Michael Pitt explores what some of the key pieces of legislation might mean for businesses if they are passed into law.
As part of its aim to raise £10 billion in red tape savings by 2020, the Government will launch a Small Business Conciliation Service to help freelancers, self-employed people and other small businesses to resolve late payment and debt disputes without the need for court action.
Further savings will be made by capping public sector redundancy payments to below £100,000, and pledges to improve the business rates system ahead of a revaluation in 2017 will be welcomed, as will other planned measures to ‘strengthen the UK’s competitiveness’.
Finance Bill and National Insurance Contributions Bill
A ban on Income Tax, VAT and National Insurance rises for the next five years will hopefully provide some stability for businesses in the next Government. However, corporate leaders and lobby groups fear this ‘tax lock’ for individuals will lead to so-called stealth taxes and cuts to tax rebates for businesses.
The much anticipated extension of Right to Buy will enable 1.3 million housing association tenants to buy their own homes with discounts significantly increased from £16,000 in some areas up to a maximum of £77,900 across England and £103,900 in London. Money raised from the sales will be used to reinvest in more affordable housing, but will this be enough considering recent figures show that housebuilding is still only around half the level needed to keep up with demand?
If they aren’t already, businesses should ensure they have strict measures in place to scrutinise all potential employees to ensure they are eligible to work in the UK, especially applicants sourced from employment agencies who will no longer be able to recruit solely from abroad. More guidance is needed on what the Government defines as migrants that have ‘no right to be here’ and it is yet to be seen what powers a new enforcement agency will have to crack down on exploitation.
By doubling free childcare to 30 hours a week for parents of three and four year olds, it’s likely that nurseries and day care centres will need to recruit more staff to cope with increased demand. Nursery providers already claim the existing scheme is underfunded, with the budget for free childcare falling 20 per cent short of the cost of provision, and this latest development could drive up the cost of paid-for hours above and beyond the free entitlement.
Trade Unions Bill
As a result of this bill, trade union ballots must meet the 50 per cent voting threshold and for essential public services, 40 per cent of those entitled to vote must vote in favour of action. At present, there is no minimum turnout to validate a ballot and only a simple majority is required, so this new legislation could make it more difficult for public sector workers to carry out legal strikes.
High Speed Rail (London-West Midlands) Bill
This bill will provide the powers required to build the first phase of the HS2 railway between London and the West Midlands, which should help businesses to prosper by re-positioning the economy away from London in favour of regions in the North and the Midlands.
European Union Referendum Bill
The election saw much debate about giving the public a vote on the UK’s membership of the EU and each of the main political parties took a position either way in their manifestoes. The Conservatives have stood by their election pledge and will oversee an EU referendum by the end of 2017. Leaving the EU would have a significant impact on businesses of all sizes but it’s still too early to tell what Britain’s future might look outside of Europe.
To discuss how legislation announced in the Queen’s Speech could impact your business, call one of the experts in our commercial team on 0161 785 3500.
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Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.
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