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UK Edition
21st October 2024
 
THE HOT STORY
Call to increase basic rate of UK statutory sick pay
Campaigners are urging the Government to enhance the basic rate of statutory sick pay (SSP), currently set at £116 a week, as many workers struggle financially while off sick. A consultation will be launched alongside the second reading of the Employment Rights Bill, which proposes paid sick leave from day one for those earning below £123 a week. Charities, including Citizens Advice and Macmillan Cancer Support, have expressed concerns that the existing SSP system is inadequate, stating: “Hundreds of thousands of working people... will still find themselves without adequate financial support.” A report by WPI Economics, led by Matthew Oakley, suggests that increasing sick pay could yield a net £4.1bn benefit to the economy by improving productivity and reducing long-term health issues.
HIRING
Branson's bold call to hire ex-offenders
Sir Richard Branson has called on employers to consider hiring ex-offenders, highlighting the loyalty and dedication they can bring to the workplace. Speaking to The Times Crime and Justice Commission, he stated: "It's good for the business and at the same time it's the right thing to do." Branson noted that many individuals in prison possess significant entrepreneurial potential, which is often overlooked. He pointed out that over a third of adults released from custody reoffend within a year, but employment can reduce this risk by 9%. Branson emphasised the need for a shift in policy, arguing that the current approach of "lock people up and throw away the key" fails to enhance community safety. He proposed alternatives to custodial sentences and advocated for more rehabilitation opportunities, stating: "You have to make an investment in rehabilitation which will pay enormous dividends in the long term."
AI tool sparks debate on interview ethics
The Times’ Mark Sellman reports on an AI tool called the Final Round Interview Copilot, designed to assist job candidates during online interviews. Michael Guan, CEO of Final Round, describes the tool as "a magical teleprompter" that helps candidates present themselves confidently. However, Hayfa Mohdzaini from the Chartered Institute of Personnel and Development (CIPD) argues that using such technology in real-time interviews is unethical, likening it to "cheating during an exam." A recent CIPD survey revealed that 23% of organisations are working to limit the use of generative AI by jobseekers, with major firms like PwC and KPMG already banning AI use in applications. But Guan said: “We don’t really care about employers. We care about the employees. We care about how to help our candidates to get ready for their next job interviews.” He added: “We’re just filling the gap between now and the Neuralink time when people have chips in their brains.”
WORKFORCE
New employment law will bring £5.5bn wage rise for carers
Labour’s Workers’ Rights Bill will give those working in the social care sector the right to collective bargaining on pay, the Sunday Telegraph reports, which could result in a £5.5bn wage rise for carers, costing £24bn over the course of this parliament. This is according to a forecast drawn up by the Department for Health and Social Care before the election, assuming a new salary for carers of £15 an hour. Unions have said this is the minimum that adult social care workers should be paid. Labour figures have previously argued that the policy would decrease reliance on foreign workers, and, if successful, should be rolled out to other sectors. However, the Department for Health denied the report reflects government policy adding that no spending decisions have yet been made.
Civil service numbers soar, services falter
The number of civil servants in the UK has surged from 416,000 in 2016 to 546,000 in 2023, prompting calls for significant cuts in government staffing. Critics, including Conservative MP Peter Bedford, argue that to “improve productivity throughout the civil service, we need to cut 100,000 jobs.” Professor Len Shackleton from the Institute of Economic Affairs noted that “productivity and performance has clearly fallen in many areas” despite the increase in staff. At the Ministry of Justice, staffing increased from 2,930 to 7,825.
TAX
Reeves could link employer NI increase to NHS to foster support
The Observer claims Labour will increase national insurance contributions (NICs) for employers to fund extra resources for the NHS after seeing research indicating a majority of the public is in favour of the move. However, the survey was commissioned by Labour Together. A separate poll by Opinium for the Observer shows Labour has lost its lead on the Tories when it comes to improving voters’ finances. "Labour's honeymoon ended a long time ago, but the chances of the budget turning things around look slim unless there's a mighty rabbit to pull out of the hat," said James Crouch, head of policy and public affairs at Opinium. "The Government should expect a turbulent couple of weeks."
Entrepreneurs threaten exodus over tax rise
Barney Hussey-Yeo, founder of the $500m fintech app Cleo, has threatened to leave the UK for the US if Rachel Reeves raises capital gains tax in the upcoming Budget. He stated: "If Labour raises capital gains tax on founders, I'll leave the UK and won't start another business here." The technology sector is concerned about a potential exodus of entrepreneurs if the Government increases capital gains tax on share sales. Recent data shows a significant rise in US visas issued to British entrepreneurs, with approvals jumping over 40% from June to July. Harry Stebbings, a venture fund manager, echoed these concerns, noting that "ambitious, young founders" are considering relocating due to tax uncertainties.
CORPORATE GOVERNANCE
Water bosses pocket £9.1m bonuses
Bonuses for water company executives in England and Wales reached £9.1m this year, despite a significant increase in sewage discharges into rivers and seas. Severn Trent led the payouts with £3.36m, even after being fined £2m for "reckless" pollution. Thames Water nearly doubled its bonuses to £1.3m, despite its CEO's resignation and the company facing over £15bn in debts. The Liberal Democrats are advocating for a ban on bonuses for polluting water companies, while Labour's water (special measures) bill aims to empower regulators to restrict bonuses based on environmental performance. Water UK, which represents the water companies, said: "Almost all of these bonuses were paid by shareholders, not customers, but all companies recognise the need to - secure our water supplies and end sewage entering our rivers. We now need the regulator, Ofwat, to fully approve water companies' investment plans so we can get on with it."
PwC offers ‘managing director’ title to retain staff who will not be partner
PwC is attempting to keep senior staff, whom it is unwilling to admit to its £1m-a-year partnership, on board by giving them the title of “managing director” instead.
DIVERSITY, EQUITY & INCLUSION
Michael Buerk: BBC doesn't care enough about diversity of opinion
The Sunday Telegraph interviews BBC veteran Michael Buerk, covering a variety of topics. But Buerk is critical of the BBC’s diversity policies, stating: "A lot of attention is paid to diversity in terms of ethnicity, gender, orientation, whatever. What they don't pay enough attention to is diversity in terms of opinion and class. It's all very well that there are X per cent of Afro-Caribbeans or Pakistanis or Indian-ethnicity people or trans people or gay people or disabled people. But, when you look at it closely, they're all young, middle-class, arts graduates from Russell Group universities." He sees this as a problem in media generally, and goes on to point out that the BBC also deems arguments around key issues such as climate change to be settled, suggesting the corporation’s world view has become increasingly narrowed due to the lack of diversity in thinking in its intake.
REMOTE WORKING
Baillie Gifford demands full office return
Baillie Gifford, the Edinburgh-based fund manager overseeing over £220bn in assets, has instructed its approximately 1,800 employees to return to full-time office work. The decision, communicated during a recent video call, has elicited mixed reactions among staff. A spokesperson clarified: "In a recent video update to all staff, they were asked to come into the office on their working days, unless there's a sensible reason not to." While the firm maintains some flexibility, the move reflects a broader trend among companies moving away from pandemic-era remote work practices. Baillie Gifford has gained prominence as an investor, particularly in technology sectors, but faced scrutiny earlier this year over its sponsorships amid protests regarding its investment strategies.
CYBERSECURITY
Company accidentally hired North Korean cyber criminal
Sky News reports on a company that unwittingly hired a North Korean hacker posing as an IT contractor, who quickly accessed sensitive data and exfiltrated it leading to a ransom demand. Rafe Pilling, director of threat intelligence at Secureworks, which investigated the incident, said the tactic was a new one for the North Korean regime, which was already trying to sneak its workers into UK companies and marked "a serious escalation" of risk for companies. "No longer are [the fake workers] just after a steady paycheck, they are looking for higher sums, more quickly, through data theft and extortion, from inside the company defences," he said.
LEGAL
Danker’s exit deal costs CBI £500k
Tony Danker, the former director-general of the CBI, has reportedly secured a settlement of approximately £500,000 following his dismissal in April 2023 amid a wider sexual misconduct scandal. This figure, which exceeds his previous salary of around £400,000, raises questions about the CBI's financial management, especially as its recent annual report indicated only £188,000 was paid for director severance costs. A CBI spokesperson confirmed the settlement, stating: "In February 2024 the CBI settled legal action brought against the organisation by Tony Danker after his dismissal in April 2023." The barrister who represented Mr Danker, Bruce Carr KC, and the former CBI chief's law firm, BDBF, are understood to have agreed to work on his litigation on a no-win, no-fee basis.
Lawyer sacked for inappropriate messages
Takeshige Sugimoto, a partner at Bird and Bird, was dismissed after sending nearly 1,000 inappropriate messages to a junior legal consultant, identified as Person B. The Solicitors Disciplinary Tribunal (SDT) found that Sugimoto's actions, which included professing his love and waiting outside her home, exploited the power imbalance due to his seniority. Despite her clear disinterest, he continued to pursue her, stating: "My existence is telling me that you are the person who I have been looking for." As a result, he has been banned from practising law in the UK for five years and ordered to pay £36,000 in costs. Sugimoto now works for a law firm in Japan.
Mum sacked after coming back from maternity leave pregnant
A mother who lost her job after returning from maternity leave only to say she was expecting another baby has been awarded £28,000. Nikita Twitchen claimed she was made redundant from her position as an admin assistant at First Grade Projects in April 2022, shortly after revealing her second pregnancy during a meeting with managing director Jeremy Morgan. The tribunal found that her dismissal was linked to her pregnancy, noting a "change of attitude" from Mr Morgan after she disclosed her news.
 


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