October 30, 2018
Yesterday, the Chancellor Philip Hammond announced the details of the UK government’s latest budget. While Brexit and austerity inevitably cast their shadows over the whole thing, there were a number of announcements relevant to the workplace, construction, tech and built environment sectors, some of which have been broadly welcomed by commentators, industry bodies and experts. Some are decidedly less popular. Among the announcements in the budget were new plans for infrastructure and property, skills and training, tax regimes for the self-employed, productivity, business rates and mental health.
Ian Brinkley, acting chief economist for the CIPD:
“Investments in physical and digital infrastructure are welcome but the battle for UK productivity will be won or lost in the workplace. The skills agenda is central to this and we need to see much greater ambition from the Government. It’s promising to see that the Government has halved the apprenticeship levy contribution for smaller businesses but this is unlikely to greatly boost the number of apprenticeships offered by small firms, many of which lack the capacity to take on apprentices. The levy is still far too rigid to work in practice for many employers. We need a more flexible training levy that can help organisations fulfil a number of training and development needs rather than shoe-horning funds and efforts into the apprenticeships model alone.
“It’s vital that the Government continues to review the operation of the levy to ensure it delivers the right results for all businesses and individuals, and that it can meaningfully help address the UK’s productivity challenge. The other big issue on skills is the need to provide small businesses with much more locally provided support on developing people management capability to boost both job quality and firm performance.
“It is disappointing the Chancellor has decided to push ahead with extending the IR 35 tax reforms from the public sector to the private sector as this will result in significant additional red tape for employers and runs contrary to his stated intention of boosting enterprise in the UK. However, we are pleased that the government has taken on board the need to phase in these changes from April 2020. What is also crucial in the run-up to implementation of this tax reform will be the provision of good quality advice and guidance for employers from HMRC, with nine out of ten HR and payroll practitioners surveyed by CIPD saying they would need significant support to correctly determine employment status if these changes are introduced.”
TUC General Secretary Frances O’Grady:
“Working people cannot be fobbed off again with promises of a better tomorrow that never comes. The budget does not undo the austerity that has devastated public services. And it lacks the investment needed to speed up wage growth after the longest pay squeeze in 200 years.
“With Brexit looming, we urgently need a national recovery plan to get the UK fit and ready. We will only have a strong economy and safe communities if we rebuild our public services. And we must invest in our industrial base to create well-paid steady jobs in the towns across Britain where they’re needed most.”
Melanie Leech, Chief Executive, British Property Federation:
“Today’s announcement does not change the fact that at almost 50%, the rate of business rates is simply too high for occupiers of all sorts. It is time to recognise that business rates are unsustainable in their current form and causing untold damage to our economy; time for a fundamental review.
“A new tax relief for commercial property owners is a real surprise. This move brings the UK more closely in line with the many other countries that already provide tax relief for the cost of building commercial property, making the UK more attractive to invest in. It makes investing in new and refurbished buildings cheaper from a tax perspective, and is a welcome move.”
Sean Duggan, chief executive of the Mental Health Network:
“The prospect of an additional £2 billion of funding for mental health by 2023/24 is a welcome step on the journey towards true parity of esteem. The scale of the challenge the sector faces cannot be underestimated. Last week’s report from the IPPR concludes that a five per cent annual increase in the mental health budget is absolutely necessary in order to achieve true parity with physical health.”
Chris Bryce, IPSE’s Chief Executive Officer:
“The Chancellor has today forced the self-employed into a holding pattern of despair, as they await the introduction of controversial tax changes which could force them out of business from April 2020. The Chancellor’s smash-and-grab approach to taxing the smallest businesses is short-termism on steroids.
“It is a short-term tax grab that will do lasting damage to the economy by taxing out of existence the smallest and most agile businesses. These are the very businesses the government and large corporations will need to call upon to provide the specialist skills to navigate our way through Brexit. The off-payroll rules are so complex and crude that genuinely self-employed people will be swept up by the government’s smash-and-grab mentality and in many cases taxed out of operation.”
“The self-employed contribute a staggering £271 billion to the UK economy each year, and give the country one of its greatest competitive advantages – flexibility. The government’s smash-and-grab mentality will therefore punish the overwhelming majority of genuinely self-employed people, heap a massive administrative burden onto businesses at a time of Brexit uncertainty, and also undermine one of the UK’s most dynamic and productive sectors.”
Martin Talbot, Group Marketing Director at totaljobs:
“Today’s Budget proved hugely promising for both jobseekers and employers, with a target to deliver 800,000 more jobs in the UK by 2022. With the signalled end of austerity, predicted sustained real wage growth, and unemployment at its lowest rate in over four decades, now is an excellent time for candidates looking for a new opportunity.
“The £695m initiative to help small firms hire apprentices will enable more workers to learn vital skills in the industries they choose to specialise in, and will allow more employers to take on apprentices and provide necessary training and development for the younger workforce.
“We now expect employers to step up to compete for top talent and fight for the most skilled and in-demand individuals. Employees looking to make their next career move can take great encouragement from today’s announcement, and we will surely see candidates demanding much more from their potential employer as the UK jobs market continues to flourish.”
Nicky Goringe Larkin, Goringe Accountants
“The Chancellor’s Autumn Budget was a surprisingly positive one pointing to the end of austerity and forecasting that the economy will remain in growth. But the big question in the room is Brexit. All the points made in the Budget were based on an assumption that Britain will get a Brexit Deal, and if it’s a No Deal, we can expect another full-blown budget in the Spring next year and the possibility of Britain facing recession.
“A freeze on the VAT threshold will be a big relief to many businesses, and SMEs in particular will benefit greatly from the continued annual employment allowance of £3,000 per employee from April 2020 and an annual investment allowance of £200,000 to £1 million.
“The increase in the National Living Wage, the rise in the personal income tax and higher rate threshold will also all see more money in people’s pockets which are all welcome steps towards an end to austerity.”