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Regulatory Policy Committee publishes latest opinions

The Regulatory Policy Committee (RPC), the Government’s appointed Independent Verification Body, to scrutinise the underlying evidence base for regulatory proposals, today publishes its latest opinions.

National Living Wage

Of the 20 published, those of note include, a ‘fit for purpose’ green opinion on the National Living Wage. The objective of this proposal is to introduce, from April 2016, a national living wage into the existing national minimum wage framework. Initially this will be set at £7.20 per hour and will apply to those aged over 25.

The main impact of the proposal on business will be the cost of raising the pay of their affected employees to the national living wage. It is estimated that approximately 1.7 million employees in the private sector will be affected, and that this will cost £804.4 million, consisting of £672.0 million in wages and £132.4 million in associated non-wage labour costs, such as National Insurance contributions.

Business Impact Target

A ‘fit for purpose’ green opinion on the extension of the Business Impact Target. This will result in amendment to the business impact target (via the Enterprise Bill), to include the actions of regulators within the target, thus making the costs of regulators’ actions on business both visible and transparent. It will enable the management and control of regulatory burdens on business which, in turn will free up business resources to be used in more productive ways. Expanding the target to cover the actions of regulators will also mean that it more completely and accurately reflects business’ experience of regulation.

The RPC noted: “the Impact Assessment does not discuss the potential costs on the RPC (as the Independent Verification Body), as a result of the increased volume of casework. In addition, the IA does not provide any assessment of the likely differences among regulators or the effect that having some regulators remaining outside the scope might have on regulators that are in scope”.

Late payment of insurance claims

A ‘fit for purpose’ green opinion on dealing with late payments on insurance claims. Businesses that suffer significant losses, for example through fire or flood, are likely to rely on insurance to repair damages. Unreasonable delays in insurance payments can lead to further costs and loss for business. While the FCA rules require payments to be made promptly, at present businesses with more than 10 employees are not able to claim any compensation in the event of unreasonable delays leading to additional costs. The proposal will amend the existing legal position to introduce legal liability for compensation in the event of unreasonable delays in payments leading to further loss.

Simplification and expansion of the Primary Authority scheme

A ‘fit for purpose’ green opinion in support of simplifying and expanding the Primary Authority scheme. The current scheme rules mean it is generally larger businesses that benefit from the scheme. The measure proposes changes to the scheme to ensure that all businesses, especially small businesses, are able to fully access the benefits of Primary Authority.

Consultation on gender pay gap

A consultation stage ‘fit for purpose’ green opinion, on the gender pay gap. The UK’s gender pay gap has fallen over time, but progress has been slow. To accelerate this, the Government, with cross-party support, intends to follow through on its manifesto commitment to require employers with at least 250 employees to publish information showing whether there is a difference in pay between male and female employees by implementing section 78 Equality Act 2010.

The GEO is consulting on two options. The first is the publication of a single gender pay gap figure per business, while the second requires a more detailed breakdown.