Weekly news round-up: from the latest ONS stats to the falling birthrate

This week’s round-up covers everything from the latest labour market statistics to the falling number of live births and implications for longer term labour shortages.

Different aged workers waiting for a job interview


Unemployment and redundancies are rising

Employment fell during the three months from April to June while unemployment is up, according to the latest Office for National Statistics [ONS] figures.

The unemployment rate increased by 0.3 percentage points on the quarter to 4.2%. The ONS says the increase in unemployment was driven by people who have been unemployed for up to six months which is in line with a rise in redundancies.

Meanwhile, the economic inactivity figures were down, largely due to those who had not been working because they were caring for family looking to find work. The ONS says there was a significant shift from economic inactivity into unemployment in the period. Nevertheless, the number of people who are economically inactive due to health reasons, exacerbated by the crisis in the NHS, increased to a record high.

Meanwhile, job vacancies continued to fall – for the 13th consecutive period – and total hours worked fell as employers, hit by economic pressures due to inflation, interest rate rises and other uncertainty, sought to cut costs. These pressures are likely to work their way down the supply chain in the next months with a potential impact on redundancies, says the ONS.

Pay rises were also high – at 7.8% on average – but this varied according to sector. Annual average regular pay growth for the private sector was 8.2% in April to June 2023 and 6.2% in the public sector, although the latter was significantly affected by the NHS bonus payment. The finance and business services sector saw the largest annual regular growth rate at 9.4%, followed by the manufacturing sector at 8.2%. Inflation was running at 7.9% in June. Experts say the pay rises are unlikely to be sustained and are in large part due to ongoing labour shortages in some sectors.

Meanwhile, despite a reduction in CPI inflation to 6.8 per cent – driven by falling gas and electricity prices – core inflation (excluding energy, food, alcohol and tobacco) remained static.

The ONS also reported that just 18% of businesses currently trading expect turnover to increase in September 2023.

Report calls for more action on disability pay gap

The UK Government should introduce mandatory disability pay and employment reporting, according to a new report from the Equality and Human Rights Commission [EHRC].

The EHRC report to the UN repeats previous calls for greater efforts to create a more equal playing field for disabled workers and gives an update on the steps taken by the UK Government and the devolved administrations to implement UN recommendations.

It recommends, for instance, that the UK Government should assess the effectiveness of the Voluntary Reporting Framework or the Disability Confident Scheme on improving employment outcomes for disabled people to inform future policy development.

While it welcomes the recently published Health and Disability White Paper which, among other things, removed the controversial Work Capability Assessment [WCA], it says that “there remain concerns that benefits and other financial support offered to disabled people do not go far enough, considering in particular how disabled people have been impacted by recent cost-of-living increases and the COVID-19 pandemic.”

It also points out concerns about changes to benefits sanctions policy and says there are worries about what will replace the WCA on the grounds that it may exclude some people from the health component of Universal Credit they need in future.

Home and hybrid working up amid cost of living crisis

Over a third of employers (36%) have seen an increase in staff working from home compared to 2022 in response to the cost of living crisis, according to Acas.

Acas is advising employers to have a flexible, home or hybrid working policy which explains how someone can request it, how job roles will be assessed and how decisions will be made, ensure that decisions around whether to agree to a staff request for home working should be fair and transparent and potentially discuss alternative forms of flexible working if home working is not practical for a specific role.

It is currently consulting on its new draft Code of Practice on handling requests for flexible working which has been updated to reflect shifts to flexible working and upcoming changes to the law.

Insecure working increases, driven by BME workers

The number of Black and ethnic minority (BME) workers in insecure work more than doubled from 2011 to 2022  – up from 360,200 to 836,300 – according to TUC analysis.

The chance of a BME worker being in an insecure job has also increased, with one in six in this position now compared to one in eight in 2011.

The TUC says the “boom” in BME workers in insecure work accounts for the vast majority of the overall increase in insecure workers over the last decade.

BME workers account for two thirds of the growth of insecure workers in this period – despite BME workers making up just 14% of the overall workforce.

Those in insecure jobs have fewer rights and protections and are often on very low pay. This means managers can change or take away their hours without notice.

The TUC estimates that there are 3.9 million people in insecure employment in the UK, with  London (13.3%) and the South West (12.7%) having the highest proportion of people working in insecure jobs.

The industries with the highest proportion of insecure work are the elementary occupations, caring, and leisure services, and process, plant and machine operatives.

While the percentage of BME workers in insecure roles rose by from 12.2% to 17.8% between 2011 and 2022, among white workers the increase was much smaller – up from 10.5% to 10.8%. The TUC says BME women are much more likely than white women to be in insecure work (15.7% of BME women in work compared to 9.9% white women).

Research shows low awareness of pensions issues

Older workers in the UK have low awareness about pensions, which hinders their ability to plan their retirement, new research has found.

Just under a third (31%) of workers aged 50-64 knew how much a full state pension was worth per week, according to polling from the Institute for Fiscal Studies. Almost half (46%) of people in this age bracket said they did not know, while the remainder made incorrect guesses.

The IFS’ researchers warned that people could not effectively plan their retirement finances if they didn’t know the basics of the state pension, which they said was the single most important form of retirement income for most workers.

A full state pension is currently worth £204 per week.

The research showed low awareness across all the age groups that were surveyed. Overall, only one in five people aged 25-64 knew the weekly state pension rate, within a £20 margin of error. Almost six in ten people (58%) said they did not know the amount.

Birth rate falls

The number of babies born in England and Wales fell by 3.1% between 2021 and 2022, according to the Office for National Statistics.

It says there were 605,479 live births in England and Wales in 2022, a number which remains in line with the recent trend of decreasing births observed before the coronavirus pandemic. The number of stillbirths was also down.

The number of births outside of marriage or civil partnership remained higher than births within marriage or civil partnership in England and Wales, with 51.4% of live births being registered to women outside of a marriage or civil partnership.

The news comes as the workforce continues to age, prompting greater interest in the retention of older workers and concerns about long-term labour shortages. A recent report by the Institute for Employment Studies and abrdn Financial Fairness Trust found that employment will grow by less than half the rate we have been used to in the two decades before the pandemic in the next two to 2040.

Between 2000 and 2020, employment grew by on average 300 thousand a year. It forecasts that between 2020 and 2040 this will fall to around 120 thousand. Over 20 years, it says, this means that there will be 3.4 million fewer people in work than if the trends of the last 20 years had continued.

Warning of ‘fundamental imbalance’ in NDAs drafted by lawyers

Solicitors need to be mindful of potential imbalances of power between employers and employees when drawing up non-disclosure agreements, according to a report by the Solicitors Regulation Authority [SRA].

It says lawyers should not to allow clauses to be included which might deter the reporting of inappropriate behaviour to law enforcement or regulatory bodies.

In 2018, the SRA published a warning notice, making it clear that NDAs must not be used to influence, prevent, impede, or deter, a person from reporting potential misconduct to the police or regulators.

The notice also outlined that solicitors should not apply inappropriate pressure, employ aggressive negotiating tactics or include unenforceable or oppressive clauses when drafting NDAs.

Although the SRA found no evidence of intentional clauses to suppress reports of wrongdoing, it plans to raise awareness among solicitors about their obligation to challenge and report unacceptable NDAs or behaviours. “What is clear is that solicitors acting for employees need to be explicit with clients about the extent of the advice they can provide where the budget is limited, and be satisfied that they are able to carry out their role to a competent standard in the time provided,” it states.

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