I would like to see more substantive action announced by the Chancellor to encourage employers to provide meaningful work opportunities for young people, with record levels of youth unemployment across Europe being one of the most distressing aspects of our current economic malaise. But the problem is primarily one of lack of demand, not supply. Further employment deregulation risks worsening working conditions and having no impact on growth.
Another big problem area is the national pensions situation. In the week [20-24 February] when we learnt from the Office of National Statistics (ONS) that just one-third of private sector employees are in a pension scheme, doctors are balloting on industrial action over changes to their pension plan, and with the Bank of England possibly amenable to further quantitative easing, the Chancellor has to act to create a more savingsand pensions-friendly environment in the UK. Ultra-low bond yields have hurt pension plans, just as the tiny interest rates on savings have discouraged us all.
Measures to encourage business investment and infrastructure spending, such as the capital allowance recommended by the Confederation of British Industry, should be at the core of the Chancellor’s speech, and greater facilitation and clarity on pension fund investments into infrastructure projects would help, as would issuing more long-dated, index-linked gilts (a pension scheme’s ideal matching asset). And no more delays to auto-enrolment, please.
Further encouragement for employee shareholding is a possibility I would welcome, given the research evidence of its impact on employee performance and engagement.
Keep an eye on the Employee Benefits’ website for breaking news stories after the Budget is announced on 21 March.
Duncan Brown is principal, reward and engagement, at Aon Hewitt