Apprenticeships
The chancellor announced plans for a £50 million pilot to promote apprenticeship training in engineering and other growth sectors, but no policy details have yet been released.
The minimum hourly wage for apprentices will also see a 21% increase from April 2024, meaning their minimum hourly pay will rise from £5.28 to £6.40.
Ben Willmott, head of public policy for the CIPD, said these measures will not be effective unless changes are made to the apprenticeship levy.
Apprenticeship starts have fallen by 31% in England since the apprenticeship levy was introduced in 2017, according to the CIPD.
He said: “Similarly, the £50 million investment to increase apprenticeship provision in key sectors is welcome but will be undermined by the continued failure to reform the failing Apprenticeship Levy, which has acted to reduce apprenticeship starts across the economy.
“The apprenticeship levy will continue to act as a brake on employer investment in apprenticeships and skills until it is reformed into a more flexible training levy.”
Read more: Apprenticeships have plummeted since levy introduced
National insurance and tax
The national insurance rate for employees will be cut from 12% to 10% from January 2024, which is reported would help some 27 million people.
This follows an announcement that the national minimum wage will increase by 9.8% to £11.44 an hour from April 2024.
Lee McIntyre-Hamilton, employment tax specialist at Keystone Law said: "Employees will no doubt be happy with the national insurance cut.
However, employers will be disappointed that the chancellor's genoristy has not been extended to the employer national insurance rates which will remain the same.
“While the rise in the national minimum wage is welcome and good news for low paid workers, together with the freeze in employer national insurance contribution thresholds, employers are likely to see the cost of employment continue to rise over the coming years."
Willmott added that the government should help businesses improve productivity to pay for the increased cost of employment.
He said: “While the new rates will be welcomed by workers grappling with the cost-of-living crisis, many employers could struggle to afford this.
“To meet this additional cost expectation, many businesses will need to boost productivity.
This highlights the importance of the government working with employers to develop policies and support that can help raise business investment in the skills, people management capability and technology needed to improve productivity, especially in low-skill and low-wage sectors.”
For businesses, the 100% tax deduction for spending on plant and machinery will become permanent. The measure is intended to boost investment and growth.
Read more: Minimum wage will rise by almost 10%
Pensions
Hunt announced a call for evidence on a ‘pot for life’ pension model, which would give employees a legal right to require a new employer to pay pension contributions into their existing pension.
The government will also enable a small number of authorised schemes to act as a consolidator for pension pots under £1,000.
‘Back to work’ for benefit claimants and disabled people
As part of a back to work plan, Hunt also announced £1.3 billion of funding to help people with health conditions find employment.
Nearly 500,000 more people will be offered treatment for mental health conditions and employment support.
Additionally, a further £1.3 billion of funding will be provided to offer extra help to 300,000 people who have been unemployed for over a year without any sickness or disability.
The chancellor said that if jobseekers have not found a job after 18 months of intensive support, the government will roll out a programme requiring them to take part in mandatory work placement to increase their skills and improve their employability.
However, if a claimant does not engage with the work search process for six months, the government will close their case and stop the benefits.
Diane Lightfoot, CEO of disability inclusion organisation, the Business Disability Forum, said disabled people are being vilified for the barriers to work they face.
“Many disabled people who want to work struggle to find a job that meets their needs. Disabled people should not be vilified for this. They also need to be assured that they won’t lose their benefits if they try out work and it doesn’t work out.”
This follows comments from chief secretary to the treasury Laura Trott that people with mobility and mental health problems will be asked to work from home or lose benefits as part of what a UK government minister described today as doing “their duty”.
Lightfoot added: “On plans for home working, suggesting that disabled people should either work from home or risk losing their benefits is both unrealistic and out-of-touch.
Home working is simply not possible or practical in every role, and whilst staff can request to work in a different way, current legislation is still not flexible enough to meet the needs of many disabled workers.”
Read more: Disabled people will work the rest of the year for free
Alex Bouaziz, CEO at Deel said the government has also failed to consider working parents and carers.
He said: “We need solutions for parents or caregivers who can make a significant contribution to the workforce, but who need more flexibility and support to do so.
“If we’re going to harness this potential and plug staff shortages successfully, we need to focus on measures that encourage flexible working and offer support in areas such as childcare and mental health.”
