Back to Blogs

How will Liz Truss impact the world of work?

  • Publish Date: Posted over 1 year ago

The new prime minister has inherited a post-pandemic Britain in the middle of a cost-of-living crisis, spiralling inflation, and a jobs market in unprecedented upheaval. She has the power to make tremendous changes–so should we be excited or worried?

Tax cuts and the cost of living

Truss’s campaign promise to cut taxes by reversing Rishi Sunak’s April national insurance hike won widespread support–despite the fact that he did it to fund the NHS.

If she goes through with this pledge, the change will mean employers and payroll teams no longer need to list NI separately on payslips and will need to change their payslips and payroll to reflect this.

Truss has also promised to scrap Sunak’s planned corporation tax rise from 19% to 23% and to make £30bn of tax cuts instead, in a bid to help the economy recover.

Her response to the cost-of-living crisis has been cautious, but she has said she’ll help with energy bills within her first week in the job and will hold an emergency budget as soon as possible.

Clampdown on industrial action

Truss also promised to set legal minimum staffing levels during strikes for every industry in her first month, aiming to reduce disruption caused by workers protesting poor working conditions, reductions in real pay, and pension cuts. She’s also considering abolishing public sector workers’ right to use paid leave for trade union activities, which includes organising strikes.

Martin Williams, head of employment and partner at Mayo Wynne Baxter, points out that “throughout the leadership campaign, and before, Liz Truss adopted a visual style reminiscent of Margaret Thatcher. Now she wants to continue the battle that Mrs Thatcher had with the unions.”

Cutting diversity and inclusion jobs

Truss has said she intends to cut standalone diversity and inclusion jobs in the civil service, having allegedly referred to these jobs as ‘woke’, and has pledged to stand up to “risk averse” Whitehall’s “groupthink”.

The unprecedented pledge came as part of a bid to save £12m a year and has been widely questioned by HR professionals and businesses.

“The cost of living crisis is the priority and we must think about diversity and inclusion as part of that”, said Sandra Kerr CBE, race director at Business in the Community. “Now, more than ever, we need champions and executive sponsors for race at the top table, mentors and sponsors for employees who are black, Asian, mixed race and from ethnic minority backgrounds… a new prime minister has not eradicated the existence of racial inequality at work just by removing a few standalone roles.”

Secondary pledges

Truss has also pledged to reform the Working Time Regulations, which currently limit the working week to 48 hours but make it easy for employers to opt out of this. Her promises also include changing tax obligations to make it easier for people to stay at home as carers. But Barry Stanton, partner and head of employment law at Boyes Turner, says the real need is to provide sufficient NHS funding to make it easier for carers to go out to work.

Truss has also planned a raft of education reforms to build employability skills among the young, including expanding successful academies, introducing more free schools, and reforming university admissions so that students win places based on actual rather than predicted grades.