Cameron/Clegg deal will impact on employers

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Yesterday saw the dawn of a new Conservative-Liberal Democrat coalition government. Among the issues that have already emerged from the negotiations between the parties, there are a number that may impact on employment law, pay and benefits. These include:

1. An end to plans for employers’ NI contribution rise, but the employee component will, most likely, still go up
2. Major increases in personal tax income allowances – especially targetting the lower paid
3. The Conservative plan a cap on immigration and  which may limit employers taking on skilled staff who would otherwise satisfy the requirements of the current points-based system
4. Married tax allowance is now a strong possibility
5. Accelerated reduction of the national deficit (currently standing at £163 billion) will have an impact on public sector spending and could result in redundencies across large sections of the public sector
6. Rise in Capital gains tax for non-business assets

Eversheds, the international law firm, has also pointed out that the Conservatives desire to roll back much EU inspired employment law may be held in check by their pact with the Liberals.  Martin Warren, practice group head of Eversheds’ human resources group, commented: “Throughout the pre-election campaign the Conservatives were vocal about their intention to reduce the EU’s influence on UK employment laws, but the reality is that this is a very difficult aspiration to implement for both legal and political reasons.

However, he added that, with a Conservative-Liberal Democrat coalition government  “David Cameron’s hope to change the balance of power on employment law is a non-starter.”



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