Tag: living standards

Stronger parental leave rights to give millions of working families the “security they deserve”

New day one rights to parental leave set for April

  • Over 18 million workers across the UK to benefit from stronger protections at work, with most insecure workers set to gain the most.   
  • New day one rights from April confirmed for parental leave, whilst bereaved partners set to gain further rights to paternity leave. 
  • Changes create more secure jobs and raise living standards, ensuring economic growth is felt by working people in every part of the UK.   

Millions of workers who were previously denied time off for the birth of their child will become eligible for new day one rights to parental leave from April, through measures being laid at Westminster today (Monday 12 January). 

The changes, which stem from the recently passed Employment Rights Act, will see parents no longer be forced to make the heart-wrenching choice between being there for the first weeks of their child’s life or going back to work to avoid losing their job.  

An additional 32,000 more dads per year will be able to access Paternity Leave immediately, as a mother would with maternity leave.  

This comes as the Government continues its Parental Leave and Pay Review, which will assess the whole system – from maternity and paternity leave to shared parental leave – to see how it can work better for parents and employers.  

Around 390,000 people are estimated to be out of work due to caring responsibilities but want a job, including parents. The reforms to parental leave include the right to take Unpaid Parental Leave from the first day in a new job, giving a further 1.5 million parents more flexibility to share caring responsibilities.

If even 1% of those out of work were able to take up a part-time job as a result of this move, it could boost economic output by around £150m a year. 

Prime Minister Keir Starmer said: “For too long, working people were left without the basic rights and security they deserve. That ends now.

“The changes we’re bringing in will mean every new parent can properly take time off when they have a child, and no one is forced to work while ill just to make ends meet. This is about giving working families the support they need to balance work, health and the cost of living.

“We’re delivering a modern deal for workers. Stronger sick pay, parental leave from day one, and protections that put dignity back at the heart of work. Because when we respect and reward those who keep Britain running, we build a stronger economy for everyone.”

Business Secretary Peter Kyle said: “No one should have to worry about whether they can take time off when their baby arrives, or lose pay simply because they’ve fallen ill.   

“Our improvements to sick pay and parental leave are about giving workers and their families the security they deserve. They will ensure our drive for growth reaches everyone through providing secure, fair paying jobs and giving support to people when they need it most.”

Following campaigning from individuals such as Aaron Horsey, a new Bereaved Partner’s Paternity Leave will also be introduced from April, providing up to 52 weeks of leave for fathers and partners who lose their partner before their child’s first birthday. This fixes the previously unfair system where bereaved partners had to rely on the compassion of an employer in order to be granted time off to grieve and care for their child. 

Aaron Horsey, campaigner for Bereaved Partner’s Paternity Leave, said: “Bereaved Partner’s Paternity Leave ensures that new parents and their employers have a clear route for support at one of the most difficult moments imaginable. It gives them the time and space they need to grieve, care, and begin to rebuild their lives with dignity. 

“By embedding this protection in law, it shows how listening to lived experience can lead to practical, compassionate change that will support families for generations to come.”

Analysis published last week showed that over 18 million workers are set to benefit from the Government’s wider Plan to Make Work Pay, with it particularly supporting the lowest-paid workers, those in insecure jobs, and people facing unfair treatment at work.   

The benefits in the Employment Rights Act significantly outweigh the costs. By restricting exploitative practices like unscrupulous fire and rehire, and giving more workers access to flexible working and guaranteed hours contracts, this country will see improved worker wellbeing, boosted productivity, and a more level playing field for employers. This is all worth billions of pounds per year and is expected to deliver a small yet positive impact on economic growth. 

The government is also bringing in changes to ensure up to 1.3 million additional workers in lower-paid or part-time roles are able to access Statutory Sick Pay (SSP) and make sure everyone can access it from the first day of illness.   

This is a substantial shift from the former three-day wait for SSP to kick in, which left people working whilst ill risking increased long-term sickness, one of key factors draining British businesses and the wider economy. 

By improving the quality of work and ensuring that everyone has job security when it matters most, the Government is delivering on its mission to drive growth that is felt by everyone. 

TUC General Secretary Paul Nowak said: “The Employment Rights Act will deliver vital common-sense reforms for millions of people across the country – including sick pay for all workers and better leave for parents.  

“Britain will now be brought into line with other countries where workers already have better protections. And crucially, the legislation will give working people the higher living standards and secure incomes that are needed to build a decent life. 

“Good employers will also welcome these changes – the Act protects them from competitors whose business models are built on low-paid, insecure employment.” 

Simon Kelleher, Head of Policy and Influencing at Working Families, said: “Day-one rights for paternity and unpaid parental leave are a positive step forward. Removing the 26-week qualifying period means parents can change jobs without losing essential leave entitlements, something we know has held many people back and can trap families in roles that no longer work for them. 

“To build on this progress, we are looking forward to continuing our engagement with the Government’s ongoing Parental Leave Review to ensure all parents can access a meaningful period of leave.”

Niall Mackenzie, Acas Chief Executive, said: “It can be hugely stressful if a worker is not paid during an illness or dealing with a major life upheaval like a birth or bereavement.  

“These new measures give greater protections for working people that get ill, and create capacity to handle unpredictable moments when they need it the most. Reducing stress and anxiety for staff can also help support good relationships with employers and support business growth.”

UK Government moves to end unfair pay and discriminatory age bands

The Government’s manifesto commitment to deliver a genuine living wage for working people took a step closer today as it set out new considerations for the Low Pay Commission when recommending next year’s National Living Wage and National Minimum Wage.

  • Discriminatory age bands to be removed as new Low Pay Commission remit delivers progress towards a single wage rate for adults.
  • Government places cost of living at the heart of the remit a year on from its first inclusion, meaning more money is being put into the pockets of hardworking people – delivering the Plan for Change.
  • Low Pay Commission to continue longstanding approach of assessing the impact of wage reforms on different sectors, ensuring recommendations support both economic growth and fair pay.

The Westminster Government’s manifesto commitment to deliver a genuine living wage for working people took a step closer today (5 August) as it set out new considerations for the Low Pay Commission (LPC) when recommending next year’s National Living Wage and National Minimum Wage.

Around 3 million workers benefitted from last year’s decision to include the cost of living in the LPC’s remit for the first time. This led to a record cash increase in the Minimum Wage for apprentices and those under 18, and a £1,400 annual boost for full-time workers on the National Living Wage from April.

Higher wages for the lowest-paid workers not only provide greater financial security for families but also mean more money in the pockets of working people to spend on the things they need – supporting businesses and driving economic growth across the country as part of the Plan for Change.

With younger workers being held back by discriminatory age bands, the updated LPC remit will drive forward the Government’s commitment to delivering a single adult pay band.

The LPC will consult with employers, trade unions and workers on narrowing the gap between the 18–20-year-old rate of the National Minimum Wage and the National Living Wage and will put forward recommendations on achieving a single adult rate in the years ahead.

The remit will also ensure that the LPC continues to actively consider the cost of living in its recommendations for National Living Wage rates to apply from April 2026.

Business Secretary Jonathan Reynolds said: “Low pay drags down living standards for our workers and in turn hurts our high streets and local businesses.

“This Government’s Plan for Change will put money back in people’s pockets, with this new remit marking the next step in considering how we ensure a fair deal for our lowest paid workers while maintaining a competitive economy that boosts businesses and their employees alike.”

Deputy Prime Minister Angela Rayner said: “We promised to make low pay a thing of the past, and deliver a wage people can live on, and that is exactly what this government is determined to deliver.

“We have already taken bold action to Make Work Pay with more than 3 million workers seeing a huge boost in their pay following our increase to National Minimum and Living Wage.

“This remit is the next milestone in our plan to get more money in working people’s pockets, raise living standards in every part of the UK, and get our economy growing.”

Chancellor of the Exchequer Rachel Reeves said: “We are delivering on our promise to make sure every worker receives a fair wage.

“Fair pay which supports working families is integral to our Plan for Change, because when working people are properly rewarded with more money in their pockets, businesses thrive and our entire economy benefits.

“To ensure the right balance is struck between the needs of workers, business affordability, and the wider economy, the LPC is being asked to consult on several issues before recommending the new rates.”

Baroness Philippa Stroud, Chair of the LPC, said: “We are pleased to receive our remit from the Government. Already, since the beginning of the year, we have spent significant time speaking with workers and employers, to understand the pressures in the economy and the effects of the most recent increases in the minimum wage. We have held a successful call for evidence and received detailed submissions from all sides.

“Our recommendations on the minimum wage are always finely balanced. More than ever, it is important that we draw on first-hand evidence from those affected by our decisions.

“I look forward to working with the rest of the Commission over the autumn to reach a shared view on this evidence and deliver our advice to the Government in October”

TUC General Secretary, Paul Nowak said: “Boosting the minimum wage isn’t just good for workers – it’s good for business too. When low-paid workers have more money in their pockets they spend it locally – supporting shops, cafés and high streets. 

“That’s why the government is right to set out its ambition to raise the floor of the minimum wage and end the outdated and unfair youth rates. 

“The minimum wage has been one of the big success stories of the last 25 years – lifting pay at the bottom and proving the doom-and-gloom merchants wrong. But it’s important that it keep rising so that it better reflects what it actually costs to get by in Britain today.

“A bolder, more ambitious minimum wage isn’t a risk. It’s the next step in building a fairer, stronger economy where hard work is properly rewarded.”

Red tape slashed as regulator axed

Regulation will be cut back as Starmer sets out his latest steps to drive economic growth

  • Unnecessary regulation will be cut to boost growth that puts more money in working people’s pockets  
  • Payment Systems Regulator abolished as part of efficiency drive 
  • PM to set out how the Government is securing our future through the Plan for Change 

Regulation will be cut back as the Prime Minister sets out his latest steps to drive economic growth that puts more money in working people’s pockets. 

The Payment Systems Regulator (PSR) will be abolished as the latest step in reducing the burdens on business. 

The Government will set out further steps to reduce red tape in the coming days.

A strong economy is at the heart of the Government’s plan to deliver security and renewal through the Plan for Change. 

The PSR – which looks after payment systems like Faster Payments and Mastercard – will mainly be consolidated into the Financial Conduct Authority, making it easier for firms to deal with one port of call. 

It follows complaints from businesses that the regulatory environment was too complex – with payment system firms having to engage with three different regulators, costing them time, money and resource.  

This has a greater impact on smaller businesses that are trying to scale and grow – as the costs are disproportionately higher for them. 

The Prime Minister wants to make regulation work for the UK – and this is the latest step in his drive to create an environment that will kickstart economic growth.

It is only by creating growth that people will see a genuine increase in their living standards – with higher wages and more money in their pocket at the end of the month.  

Prime Minister, Keir Starmer said: “For too long, the previous Government hid behind regulators – deferring decisions and allowing regulations to bloat and block meaningful growth in this country. 

“And it has been working people who pay the price of this stagnation. 

“This is the latest step in our efforts to kickstart economic growth, which is the only way we can fundamentally drive-up living standards and get more money in people’s pockets.  

“That’s why it is the priority in the Plan for Change, and it’s why I’m not letting anything get in its way.”

Chancellor, Rachel Reeves, said: “The regulatory system has become burdensome to the point of choking off innovation, investment and growth.

“We will free businesses from that stranglehold, delivering on our Plan for Change to kickstart economic growth and put more money into working people’s pockets.”

This builds on the Government’s deregulatory agenda, which has already:

  • Lifted the onshore wind ban at the stroke of a pen
  • Introduced the Planning and Infrastructure Bill
  • Launched the root and branch review of the water sector
  • Set financial services regulators on a growth agenda
  • Set up a review of all environmental regulation

Yesterday’s announcement does not result in any immediate changes to the Payment Systems Regulator’s remit or ongoing programme of work. The regulator will continue to have access to its statutory powers until legislation is passed by Parliament to enact these changes.  

In the interim period, the Payment Systems Regulator and the Financial Conduct Authority will work closely to deliver a smooth transition of responsibilities to ensure the market remains competitive. 

The entire regulatory landscape will continue to be reviewed and finessed as part of a wider Government effort to kickstart economic growth and make regulators work for the country, rather than block progress. 

This is the latest in a line of work to make regulators work for the country. It follows: 

  • A speech from the Prime Minister at the International Investment Summit where he called on the regulatory regime to fit the modern age.
  • A letter from the Prime Minister, the Chancellor and the Business Secretary – calling on regulators to come up with at least five reforms each that will boost economic growth.
  • The Chancellor ‘hauling in‘ regulators in January to have these proposals scrutinised.

TUC: UK families suffering “worst decline” in living standards in the G7

UK is only country in G7 where household budgets have not recovered to pre-pandemic levels

  • Families would be £750 a year better off if real disposable income had grown in line with other leading economies 
  • Working people are being made poorer by Conservative failure, union body says 

The UK is suffering the worst decline in living standards of any G7 country – according to new TUC analysis published this week.

The analysis shows the UK is only G7 economy where real household disposable income per head hasn’t recovered to its pre-pandemic levels: 

Real household disposable incomes in the UK were 1.2% lower in the second quarter of 2023 than at the end of 2019. 

But over the same period they grew by 3.5%, on average, across the G7. 

The TUC estimates that if real disposable income in the UK had risen in line with the G7 average UK families would be £750 a year better off. 

More pain ahead 

The union body warned that the contraction in UK household budgets is going to get worse – despite falling inflation. 

The Office for Budget Responsibility (OBR) forecasts that real house disposable income per head in Britain will fall by an additional 3.4% by the end of the first quarter of 2024. 

And according to the same forecasts household budgets won’t even recover to their pre-pandemic levels until the end of 2026. 

The OBR said in November that UK households are suffering the worst period for living standards since modern records began in the 1950s. 

Households in debt 

The TUC says the Conservatives’ failure to grow the economy and deliver healthy wage growth has pushed many households further into debt. 

Analysis published by the union body at the end of December revealed that unsecured debt (credit cards, loans, hire purchase agreements) is set to rise by £1,400 per household, in real terms, this year. 

The TUC says working people have been left brutally exposed to rising costs after years of pay stagnation. 

UK workers are on course for two decades of lost living standards with real wages not forecast to recover to their 2008 level until 2028. 

The TUC estimates that the average worker has lost £14,800 since 2008 as a result of their pay not keeping up with pre-global financial crisis real wage trends. 

TUC General Secretary Paul Nowak said: “The UK is the only G7 nation where living standards are worse than before the pandemic. 

“While families in other countries have seen their incomes recover – household budgets here continue to shrink. 

“This is a damning indictment on the Conservatives’ economic record.  

“Their failure to deliver decent growth and living standards over the last 13 years has left millions exposed to skyrocketing bills – and is pushing many deeper into debt. 

“We can’t go on like this. Britain cannot afford the Tories for a day longer.” 

Growth in real disposable household income in the G7 

Country change 2019Q4 to 2023Q2 
United Kingdom -1.2 
Italy 0.1 
Germany 0.2 
Japan * 0.5 
France 2.4 
Canada 3.0 
G7 3.5 
United States 6.0 
source: OECD; * Japan to 2022Q1 

– The analysis is based on OECD figures for real household disposable income per head, which extend to 2023Q2 (except for Japan, which go to 2022Q1). Looking forward, UK figures are based on Office for Budget Responsibility projections in the November 2023 Economic and Fiscal Outlook. As with the ONS outturns and OBR projections, cash figures are in 2019 prices. 

– The OBR measure living standards as real household disposable income (RDHI) per person.