Chancellor Jeremy Hunt unveiled crucial measures in the Autumn Statement on 22 November, with a focus on reducing national insurance, bolstering apprenticeships, and addressing unemployment concerns. The impact on the HR industry is notable across various sectors.
The Chancellor proposed a £50 million pilot to boost apprenticeship training in growth sectors, with a 21% increase in the minimum hourly wage for apprentices from April 2024. However, Ben Willmott of the CIPD stressed that the effectiveness of these measures hinges on reforms to the apprenticeship levy, which has seen a 31% decline in apprenticeship starts since its introduction in 2017.
National Insurance and Tax
The national insurance rate for employees will decrease from 12% to 10% starting January 2024, benefiting around 27 million individuals. However, Lee McIntyre-Hamilton from Keystone Law noted that while employees welcome the cut, employers are disappointed that it doesn’t extend to employer national insurance rates. With a rise in the national minimum wage and frozen employer contribution thresholds, businesses might face increased employment costs.
For businesses, a 100% tax deduction for spending on plant and machinery will become permanent, aiming to stimulate investment and growth.
A ‘pot for life’ pension model was introduced, allowing employees a legal right to insist new employers contribute to their existing pension. Additionally, a call for evidence was announced to explore pension consolidation for pots under £1,000.
‘Back to Work’ initiatives
As part of a back-to-work plan, £1.3 billion in funding will support individuals with health conditions in finding employment. Nearly 500,000 more people will receive mental health treatment and employment support. The government will allocate an additional £1.3 billion to aid 300,000 long-term unemployed individuals. If jobseekers haven’t secured a job after 18 months of support, a mandatory work placement program will be initiated. However, failure to engage in the work search process for six months may result in benefit cessation.
Diane Lightfoot of the Business Disability Forum criticized the potential impact on disabled individuals, emphasizing that they shouldn’t be penalized for employment barriers. Concerns were also raised about suggesting home working as a one-size-fits-all solution, with calls for more flexible options and support for working parents and caregivers.
The Chancellor’s Autumn Statement presents a mix of initiatives aimed at economic recovery, employment support, and apprenticeship promotion, with ongoing discussions about their potential effectiveness and industry implications.