Osborne announced the move in today’s emergency budget, the first all-Conversative budget since 1996.
“While many firms do a brilliant job of training their workforces, too many leave training to others and take a free ride on the system,” he said.
To combat this and to help the Conservative party achieve its goal of three million new apprenticeships over the next parliamentary term, an apprenticeship levy will be introduced for all large companies.
The money will be controlled by employers to ensure it is put to best use. Osborne described this as a “bold step” that Britain needs to take and said employers would “get back more than they put in”.
Other HR-related announcements in today’s budgets included:
- Pensions could be treated in the same manner as ISAs, though this is unconfirmed. Osborne announced the party has released a green paper for public consultation. He said he was open to further “radical” changes to pensions.
- Pensions tax annual allowance will be “tapered away” to a minimum of £10,000 from next year.
- Public sector pay rises will be capped at 1% for the next four years.
- Young people will have to “earn or learn”. Those aged 18-21 will be subject to a “Youth Obligation”.
- Permanent non-dom status will be abolished.
- Working parents of three- and four-year olds will get 30 hours of free childcare per week.
- In work benefits to be frozen for four years.
- A living wage of £9 an hour to be implemented.
- An increase in the national insurance threshold for lower paid workers, to £11,000.