Employment, Social Affairs & Inclusion

News 15/03/2017

Recent social policy initiatives in France, Italy, Poland and the UK

Five new Flash Reports prepared by the European Social policy Network (ESPN) have just become available and provide information on recent policy developments in France, Italy, Poland and the UK.

  • In France, the effects of the old-age pension reforms that began in 1993 and intensified in 2010 are becoming tangible. The increase of the statutory pensionable age has reduced the duration of pension payments and their total amount over the entire life span. Although the pension system’s resources have increased and its deficits been contained, evaluations show that these positive effects should be nuanced since they have led to increases in other areas of social spending.
  • Italy’s 2017 Stability Law includes several innovative measures in the field of old-age pensions, mostly aimed at facilitating early retirement and increasing lower pension incomes. The new measures will expand old-age pension expenditure and are based on the principle of equity: they should boost solidarity and tackle the most severe social consequences of the crisis. However, the design of the reform seems to be relatively ineffective.
  • In February 2017, Italy adopted tougher rules to address increased migration flows. Criticisms of these rules underline that migration control should be combined with integration programmes and a long-term strategy to tackle the problems of people displaced due to war, persecution and poverty in complex and evolving geopolitical scenarios.
  • In Poland, a new tax-free allowance has been in force since January 2017. It replaces the previous universal and flat rate allowance, which was low and non-indexed. Under the new rule, the maximum level of tax-free income roughly equals the subsistence minimum and is higher than the social assistance threshold for larger households. The level is gradually reduced to zero as income rises, and will be adjusted annually. In spite of the budgetary costs, the reform has been well received.
  • On 8 March, as part of his budget proposal, the UK Chancellor announced that the main rate of national insurance contributions (NICs) for the self-employed would be increased from 9% to 11% in two steps (compared to 12% for employees). The proposal was criticised, including by a number of the government’s own Members of Parliament, for breaking an election pledge not to increase VAT, income tax or NICs. The Prime Minister announced that legislation would be delayed until the autumn, and the publication of a report on the future of work. Yet, within a week the proposal was dropped, and a promise made not to increase NICs in this parliament.

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