All budgets have winners and losers. The most vocal on the wrong end of the latest one are those hit by the inheritance tax changes, and the CEOs of Britain’s biggest businesses who plan to cut jobs and investment due to hikes to National Insurance. For the latter, these National Insurance hikes add insult to injury – the injury being the Employment Rights Bill, which was introduced prior to the Budget.
The Bill isn’t set in stone – the Government is currently consulting on it – and given the huge blowback around the National Insurance rise, I expect those in power will be particularly alert to any critiques. After all, according to the Government’s own analysis, the planned reforms will cost businesses billions a year.
In our conversations with entrepreneurs, the biggest concern around the Bill seems to be the right to claim unfair dismissal against employers from day one. Currently, there is a two-year qualifying period. While there will be a less onerous process for earlier terminations due to capability, conduct, illegality or so forth, many business owners are worried.
As Daniel Pollard, employment partner at Charles Russell Speechlys, says: “The risk of hiring the wrong person may make employers more cautious which is not good for anybody. If the rules are too restrictive during the probationary period this will also act as a brake on recruitment and stop employers taking a punt on a candidate who might be an outlier.”
For entrepreneurs in the sharing economy, we’ve heard concerns about the restrictions around zero-hour contracts. While the Bill doesn’t ban them, it sets out complex rules requiring guaranteed hours. Neil Carberry, Chief Executive of the Recruitment and Employment Confederation says: “Far too much is made of zero-hour contracts as being imposed on workers when there is more than enough evidence that people want to work in different ways.” This reflects the findings of our report for the All-Party Parliamentary Group for Entrepreneurship on the Sharing Economy.
There’s much more besides – some of which is hard to get too worked up about, such as stopping ‘firing and rehiring’. But as it currently stands, there’s an awful lot in there that will render British businesses less agile. This article on 11 things you need to know about the Employment Rights Bill is a good place to start if you don’t know what might be coming down the line.
I write “might” because my sense is that the Government is open to striking a better balance. If you’re keen to have your say, but don’t want to or can’t respond directly, sign up here. We’ll be going out directly to our Members to feed into our submission.
Big Deal
This week was the tenth instalment of our Three Big Ideas series on our Substack. If you’ll forgive the self-promotion, I think it’s a cracker. We invited Jack Wiseman from Inference Magazine to make the case for Special Compute Zones that are rumoured to appear in Matt Clifford’s AI Opportunities Action Plan. I wrote about how the Annual Investment Allowance has distorted investment away from business spending on big data and AI. While our Research Director Eamonn Ives gives some sound advice to whoever becomes the Chair of the newly established Regulatory Innovation Office (applications close this Sunday).
Lilac Review
I’m on the board of the Lilac Review – an independent government-backed review dedicated to understanding the challenges and successes experienced by disabled entrepreneurs.
On a range of questions, we’re looking for the views of entrepreneurs with a disability. Your insights will contribute to a comprehensive report from the Lilac Review, set for release in May 2025. As a thank you, everyone who completes the survey will be entered into a draw to win one of two £250 prizes.
You can take the survey here. The Lilac Review is committed to making this survey accessible to all. If you’d prefer to complete the survey in a different format, please reach out at: hello@lilacreview.com.
The Lilac Review was spearheaded by Michelle Ovens CBE, whose tenacity on this topic is only beaten by her ambitions to move the agenda forward. If you want to support this policy area and don’t know Mich, drop me an email and I’ll make an introduction.
Founder Resilience
Building on last week’s newsletter, I wrote for Forbes about the importance of founder resilience. If this is something that matters to you, let me know and I’ll make an introduction to Christina Richardson, our Adviser and author of the report.