Category: 0 Reviewed

• The reserved powers model provides a clear boundary between reserved and devolved matters
• Welsh devolution will be strengthened through further powers for the Assembly and Welsh Ministers
• The new model will come into force on 1 April 2018

On 1 April 2018, a new reserved powers model of devolution in Wales will come into force, putting more decisions into the hands of Welsh Ministers, giving them important new levers to grow the Welsh economy and to deliver better public services across Wales.

The new model places Welsh devolution on a firmer foundation, making clear what is devolved, and the responsibility of the National Assembly for Wales, and what is reserved – and the responsibility of Parliament.

The regulations also bring into force many of the further powers being devolved to the Assembly and Welsh Ministers under the Wales Act 2017, including powers over elections, transport and the environment. Most of these powers will also come into force on 1 April 2018.

The announcement comes a week after the Chancellor’s budget where he set out plans to increase the Welsh Government’s budget by £1.2 billion and build an economy that is fit for the future.

The new reserved model will take effect at the same time as the new devolved Welsh taxes, and before the Assembly and Welsh Ministers take responsibility for a portion of income tax.

Secretary of State for Wales Alun Cairns said:

The reserved powers model marks a significant step forward in Welsh devolution and implements the clearer devolution settlement provided in the Wales Act.

The additional powers for the Assembly and Welsh Ministers will strengthen Welsh devolution and set it on a clear course for the future.

The Welsh Government now needs to be innovative with the opportunities these new powers provide and deliver the improvements in devolved services that the people of Wales deserve.

ENDS

Notes to Editors

Some parts of the Wales Act 2017 are already in force, including provisions that:

• reaffirm the government’s commitment to the permanence of the National Assembly for Wales and the Welsh Government;
• remove the requirement for a referendum before the devolution of income tax to Wales; and
• double (to £1 billion) the amount Welsh Ministers can borrow to fund capital expenditure.

Earlier this month, the UK Government and Welsh Government introduced a water protocol for England and Wales which will safeguard water resources, water supply and water quality for consumers on both sides of the border

The next round of Brexit talks between the Welsh and UK Governments will take place today (Thursday 30 November) in Cardiff, where First Secretary of State Damian Green and Welsh Secretary Alun Cairns will meet First Minister Carwyn Jones.

The meeting is the latest in a series of talks between both governments to help determine where powers repatriated from the EU to the UK at the point of Brexit will sit in future. It follows a positive and constructive meeting between the three ministers on 11 October.

Today’s talks come after a meeting earlier in the day between Damian Green, Alun Cairns and Local Authority leaders in Wales, to discuss future growth deals, and the potential impact of Brexit on funding arrangements.

Secretary of State for Wales Alun Cairns said:

These talks are an opportunity for all parties to move towards an agreement on how powers should be shared as they return from Europe.

It is vital that we make Brexit a success for everyone, and it’s in everyone’s interests to reach an agreement on where decisions made at an EU level will be made once we leave the EU.

Putting the people of Wales at the heart of decision making is a priority for both governments, and it will not be a case of imposing decisions.

We must not create any new barriers to living and doing business in the UK, which is why we’ve already agreed the need for common frameworks in some areas.

I look forward to continued positive discussions with the Welsh Government as we negotiate our route out of the EU.

ENDS

In her first speech as International Development Secretary, Penny Mordaunt today announced she will bring together global leaders and technology companies next year to tackle the barriers that prevent people living with disabilities in the world’s poorest countries from reaching their full potential.

During a speech at Microsoft’s head office in London, Ms Mordaunt will set out that the UK will co-host the Global Disability Summit in 2018.

Speaking ahead of her speech, the International Development Secretary said:

For too long many people living with disabilities in the world’s poorest countries have not been able to fulfil their potential due to stigma or a lack of practical support. They are, for example, missing out on school and the chance to work.

Discrimination is unacceptable in today’s society. I want us all to act now and break down the barriers people with all disabilities face in their everyday lives, so they are not short-changed on opportunities to use their entrepreneurial spirit to help their countries prosper.

That’s why I am bringing technology companies, governments and charities together at the UK Government’s first-ever Global Disability Summit in London in July 2018, to show our commitment to transform the lives of people living with disabilities.

People with disabilities have a much lower employment rate in both developed and developing countries. In Bangladesh, this means that $54 million are lost every year, because people with disabilities do not have the right support. Overcoming these barriers would boost global prosperity.

DFID wants to shine a spotlight on the role that innovation and technology can play to help people with disabilities. For example, UK aid-supported D-Rev, is a small business which developed a low-cost prosthetic knee for young adults in rural Africa and Asia, to make sure it could reach the poorest people.

Innovation and expertise from world-leading private sector businesses, including Microsoft, will be vital for DFID to learn how to successfully support people with disabilities in the developing world.

Hugh Milward, Senior Director Corporate and External Legal Affairs at Microsoft said:

Microsoft believes that technology can play a critical role in removing barriers and empowering people with disabilities. At this moment, the world is at the dawn of a data and technology driven fourth industrial revolution, and these technologies enable governments and organisations to change the way they deliver services to their communities, customers and colleagues.

DFID has already started to put disability at the heart of its development agenda, with programmes funded through UK Aid Match and the Amplify challenge, showing first-hand how the lives of people with disabilities can be improved.

Notes to editors

The Global Disability Summit will be co-hosted with the International Disability Alliance (IDA).

One study in Bangladesh found that, ‘reductions in wage earnings attributed to lower levels of education among people with disabilities and their child caregivers were estimated to cost the economy USD 54 million per year’.

UK aid will support programmes which are proven to improve the lives of people with disabilities, including quality education, jobs and healthcare.

For every £1 donated to a UK Aid Match charity appeal, the government will also contribute £1 of UK aid, to help these projects go further in changing and saving lives.

Amplify is a DFID programme in partnership with IDEO.org. which sources early stage ideas to tackle emerging development challenges, including disability. Through the Amplify challenge, DFID has experience of what programmes can help deliver for disabled people globally:

• UK aid funded the Action on Disability and Development International project in Bangladesh to provide skills training and employment opportunities for people with disabilities in the garment industry and in small businesses.
• British charity Motivation UK broke down the barriers for children with disabilities in Uganda to participate in school by providing training and facilities. Thanks to this work, the attendance rates of children with disabilities in the supported schools almost doubled.

• Strong growth also in nation’s tourism, culture, sport and digital industries
• DCMS sectors contribution to the economy up by 3.6 per per cent year-on-year to almost £250bn, accounting for 14.2 per cent of the UK’s Gross Value Added (GVA)

The UK’s booming creative industries made a record contribution to the economy in 2016, new statistics show.

Industries including advertising and marketing, arts and film, TV and radio, and museums and galleries are all part of this thriving economic sector, which is now worth almost £92bn, according to the figures published today by the Department for Digital, Media, Culture and Sport.

The creative industries’ contribution to the UK is up from £85bn in 2015 and it is growing at twice the rate of the economy. The sector now makes up more than five per cent of the UK economy’s GVA. Much of the increase has been driven by a boom in the computer services sub-sector. While this includes video games, it also covers wider digital industries.

DCMS sectors’ contribution to the UK economy overall continues to rise, with GVA at £248.5 billion in 2016, up 3.6 per cent year-on-year and up 29 per cent since 2010. DCMS sectors now account for 14.2 per cent of the UK’s GVA.

Secretary of State for Digital, Culture, Media and Sport Karen Bradley said:

Britain’s creative industries play an essential role shaping how we are seen around the world but as these new statistics show they are also a vital part of the economy.

The sector is now one of our fastest growing industries and continues to outperform the wider UK economy. This is a testament to the talent and drive of its workforce and we are working closely with them to make sure this fantastic success continues.

I am delighted to see the sectors my Department supports contributing so positively to people’s lives and helping strengthen the economy, as we work to build a Britain fit for the future.

The Government continues to back the creative industries sector. For example, dedicated tax relief to support high-end television productions, such as Game of Thrones and The Crown have seen a production boom worth £1.5 billion since the scheme was introduced in 2013. There was also £1 billion of inward investment in the film industry last year as a result of tax relief.

The government’s UK Games Fund, which helps video game companies grow with grants to support new projects and talent, has just been extended until 2020. The government has also recently announced the opening of a £80 million Creative Industries Clusters Programme competition which will boost innovation in the sector by part-funding research partnerships between universities and industry.

Britain’s thriving tourism sector has continued to grow and now makes up almost four per cent of the UK economy – worth a record £66 billion in 2016.

Sport’s value to the UK economy has also increased by 4.9 per cent year-on-year and by 28.6 per cent since 2010. Sport’s value, which includes sport equipment production and the operation of sports facilities, rose to £9 billion, although this does not include the sports broadcasting rights or sports advertising markets.

The UK’s world leading digital sector has seen its contribution to the UK economy increase by 5.8 per cent between 2015 and 2016, and by 23.3 per cent since 2010.

The Government recognises the value of the UK’s digital sector. Two weeks ago the Prime Minister and Chancellor hosted a tech roundtable and reception at Downing Street and earlier this year the Government published its Digital Strategy to help make the UK the best place in the world to start and grow a digital business.

Last week’s Budget included more than £500m of investment in technologies including artificial intelligence (AI), 5G and full fibre broadband. This was followed by Government’s Industrial Strategy earlier this week, which committed to transformative investment in pioneering immersive technologies such as virtual and augmented reality with £33m from the Industrial Strategy Challenge Fund. This investment is also designed to capture new global audiences and grow our leading market position in creative content.

Notes to editors

• Gross value added measures the value of goods and services produced without associated costs.
• This release provides estimates of the contribution of DCMS sectors to the UK economy, measured by gross value added (GVA).
• The 2016 figures are provisional and are subject to change when ONS National Accounts are published next year.
• Link to statistics here.

Media enquiries:
DCMS News and Communications team on 020 7211 2210 or out of hours on 07699 751153.

Today the Low Pay Commission (LPC), the body that recommends the rates of the National Minimum Wages (NMW), including the National Living Wage (NLW), launches its detailed annual assessment of the labour market and explains the rationale for its recommendations.

The Government has accepted all of the LPC’s recommendations, including for the largest increases in a decade for the rates that apply to 18-20 and 21-24 year olds.

On 1 April next year (2018) these rates will increase by 4.7 per cent and 5.4 per cent respectively. These are greater percentage increases than both that of the National Living Wage, which will increase by 4.4 per cent, and forecast average earnings growth of between 2.5 and 3 per cent. (See table below for full details of the current and future rates).

The new rates will boost the earnings of between 260,000 and 360,000 young workers directly, and many more young workers will benefit. This is for two reasons: firstly, these increases lead to ‘spillover’ effects further up the pay distribution; secondly, even though they are not entitled to it, some young workers benefit from increases in the National Living Wage. We estimate that up to 45 per cent of 18-24 year old workers – or 1.3 million young people – could receive a higher pay increase than they would have done in the absence of the NLW.

In the years following the recession the LPC recommended lower increases in the NMW for young people to protect their employment position. This is because young people are more at risk of unemployment than older workers in the event of an economic downturn. Periods out of work can cause ‘scarring’ effects for young people, whereby their earnings and employment chances are still affected years later.

When making those recommendations, the LPC also made commitments to restore any lost ‘relativities’ once economic conditions improved. The LPC judged that there was sufficiently strong evidence to justify being more ambitious for the youth rates:

• Employment in the UK continues to grow more strongly than forecast and is at record levels.
• Unemployment has fallen to its lowest rate since 1975.
• There have been ongoing improvements in the employment and unemployment rates of 18-24 year olds, despite two increases in their NMW rates in quick succession in the last year.
• Wage growth for those aged 18-24 has been higher than for those aged 25 and over for the last three years. As a result, the bite, which is the NMW as a percentage of median earnings and a key measure of pressure, has fallen for workers of these ages.
• Both employers and unions raised the importance of fairness and employee relations between age groups in the workforce.

The LPC recommended slightly lower increases for 16-17 year olds at 3.7 per cent, or 15 pence, from £4.05 to £4.20. The reason for this is that earnings and employment chances have not improved as fast as for the other age groups. But, while this increase is lower than for the other rates, it is still the highest in 10 years for this age group.

Commenting on the analysis, LPC Chair Bryan Sanderson said:

The LPC is pleased that the Government has accepted our recommendations to increase the NMW rates for young people. Many thousands will benefit directly and thousands more will benefit from the increases to the NLW.

If economic conditions, particularly the labour market for younger workers, remain positive or improve then there will be grounds for further increases in NMW rates for younger workers in the future.

The Government also accepted the LPC’s recommendation for the National Living Wage to increase it to £7.83 in April 2018. The LPC’s approach is different for the National Living Wage and the other National Minimum Wage rates. On the former, the Government has given the LPC a target to reach 60 per cent of median earnings by 2020, subject to sustained economic growth. On the latter, the LPC is asked to make recommendations that lift rates as high as possible without damaging employment. It was the LPC’s judgement that the evidence was consistent with the NLW remaining on its path to 60 per cent of median earnings with the April 2018 uplift.

The April 2017 uprating of the National Living Wage again delivered a substantial increase in earnings for workers. It increased by 4.2 per cent, double the average wage growth for all workers aged 25 and over of 2.1 per cent. Despite the April 2017 uprating being lower than the previous year, when the NLW was first introduced, (30p and 4.2 per cent compared with 50p and 10.8 per cent) its ‘spillover’ effects are greater. We estimate that the NLW indirectly raised the earnings of up to 7 million workers as employers sought to maintain a pay differential with the NLW.

These differential effects occur when employers try to maintain a pay gap with the NLW for other staff, for example the manager or team leader of a group of minimum wage workers. Employers tell us this is a major challenge because of the cost. Their concern is that the squeezing of these differentials is causing problems around motivation and progression – when differentials are low employer struggle to encourage staff to apply for managerial or supervisory roles.

Notes:

1. The Low Pay Commission is an independent body made up of employers, trade unions and experts whose role is to advise the Government on the minimum wage. The National Living Wage is the legally binding pay floor for workers aged 25 and over. The other minimum wage rates comprise: the 21-24 Year Old Rate, the 18-20 Year Old Rate, the 16-17 Year Old Rate and the Apprentice Rate.
2. The LPC’s remit prescribes different requirements in relation to the NLW than for the four other bands of the minimum wage. For the NLW we are asked to make recommendations on the pace of increase towards a target: an ‘ambition…that it should continue to increase to reach 60 per cent of median earnings by 2020, subject to sustained economic growth’. For the other rates we are asked to ‘help as many low-paid workers as possible without damaging their employment prospects’.
3. Our full recommendations for April 2018 and underpinning analysis were published in our 19th report. The rationale for our recommendations is also included in a letter from the LPC Chair to the Secretary of State for Business, Energy and Industrial Strategy.
4. We said in our report in March 2016 that, in the absence of economic shocks or other strong evidence, we thought that the default for the NLW would be a straight line rolling path to the 60 per cent target – evenly spreading our (annually updated) estimate of the increase in relative value needed to hit the target over the remaining years to 2020. Our recommendation for the NLW reflects this approach, and the cash level is in line with the indicative figure we set out last October – £7.85.
5. The new NLW rate will increase pay for typical minimum wage workers (working 30 hours per week) by just over £500 per year. An increase of 4.4 per cent is, after the introduction of the National Living Wage in April 2016, the largest increase in the main rate of the minimum wage since 2006.
6. We estimate that the £7.83 rate will raise coverage – the number of workers paid at or below the NLW – by up to 530,000, from 1.6 million jobs (6.4 per cent of the cohort) in April 2017 to 2.1 million (8.6 per cent) in April 2018. Looking at progress towards the 60 per cent target, we estimate that the £7.83 rate will represent an increase in the relative value of the NLW for workers aged 25 and over of 1.1 percentage points, up from 56.9 per cent of the value of typical earnings (October 2017) to 58 per cent (October 2018).
7. Rates for workers aged under 25, and apprentices, are lower than the NLW in reflection of lower average earnings and higher unemployment rates. International evidence also suggests that younger workers are more exposed to employment risks arising from the pay floor than older workers. Unlike the NLW (where some consequences for employment have been accepted by the Government), the LPC’s remit requires us to set the other rates as high as possible without causing damage to jobs and hours.
8. Employment and unemployment rates for 18-24 year olds not in full-time education have seen quarter-on-quarter improvement for the last two years or longer. As a consequence, in June 2017, the employment rate for 21-24 year olds was 8 percentage points higher – and the unemployment rate 7.5 percentage points lower – than in June 2013. The employment rate for 18-20 year olds was 2.0 percentage points higher – and the unemployment rate 4.3 percentage points lower – than in June 2015. These continuous improvements were maintained despite the relatively large increases in the NMW in October 2016.
9. We have also provided an indicative rate for the National Living Wage from April 2019. This is inevitably uncertain because pay forecasts are likely to change, but using those available in October we project that the on-course rate will be £8.20. Using OBR forecasts published last week, the projected figure is £8.18. For 2020, the LPC’s projected rate for 60 per cent of median earnings is £8.61, within a range of £8.55 to £8.66. Using its forecasts published last week, the OBR wage growth projections give a slightly lower estimated figure for 2020, of £8.57.
10. The National Living Wage is different from the UK Living Wage and the London Living Wage. Differences include that: the UK Living Wage and the London Living Wage are voluntary pay benchmarks that employers can sign up to if they wish, not legally binding requirements; the hourly rate of the UK Living Wage and London Living Wage is based on an attempt to measure need, whereas the National Living Wage is based on a target relationship between its level and average pay; the UK Living Wage and London Living Wage apply to workers aged 18 and over, the National Living Wage to workers aged 25 and over. The Low Pay Commission has no role in the UK Living Wage or the London Living Wage.
11. The members of the Low Pay Commission comprise:

• Bryan Sanderson, Chair
• Sarah Brown, Professor of Economics at the University of Sheffield
• Kay Carberry, TUC
• Neil Carberry, Managing Director, People and Infrastructure, CBI
• Clare Chapman, Non-Executive Director & Remuneration Committee Chair at Kingfisher PLC
• Richard Dickens, Professor of Economics, Sussex University
• Peter Donaldson, formerly Managing Director, D5 Consulting Ltd
• John Hannett, General Secretary, Usdaw
• Brian Strutton, General Secretary, BALPA

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