On 27 October 2021, Chancellor Rishi Sunak announced the 2021 Autumn Budget, setting out the government’s tax and spending plans for the year ahead. This year’s Autumn Budget is unusual in being the second of the year – there was a budget in March too.
Despite expectations of a bleak economic outlook, the Chancellor announced that UK economic growth for 2021 has been revised upwards from 4% to 6.5%. The UK economy is forecasted to return to pre-Covid levels by 2022.
Total departmental spending will increase by £150bn over this Parliament, which means a real term rise in overall spending. Inflation in September was 3.1% and is likely to rise further – to an estimated average of 4% over next year.
The budget announced seems set to try and address some of the key issues facing the UK right now, such as recovering from the economic impact of the COVID-19 pandemic and the ‘levelling up’ agenda.
There wasn’t a huge amount that directly impacts employers, but our HR experts have collated those points that do below.
National Minimum Wage
The Chancellor confirmed that the government have accepted the recommendations of the Low Pay Commission to increase the National Living Wage next year by 6.6%, to £9.50 an hour. The full list of increases which will apply from 1 April 2022 are as follows:
The Chancellor confirmed the government’s commitment to developing skills through apprenticeship programmes by committing to increasing apprenticeship funding to £2.7 billion by 2024-25.
As part of this, the government will continue to meet 95% of the apprenticeship training cost for employers who do not pay the Apprenticeship Levy. They will also deliver improvements to the apprenticeship system, including:
The Spending Review also reconfirmed the government is extending the £3,000 incentive for taking on apprentices until 31 January 2022.
In spring next year, the government will be launching a new Scale-Up Visa. This will be open to applicants who pass the language proficiency requirement and have a high-skilled job offer from an eligible business with a salary of at least £33,000. Eligible companies will be those that have experienced 20%+ annual growth in turnover or employee numbers over the past three years.
This will differ from the Skilled Worker Visa in that this new visa will be open to all sectors as long as the growth, role and individual criteria are met, whereas the Skilled Worker Visa is restricted to roles on the eligible occupations list.
The Chancellor announced a new 50% business rates discount (up to a maximum of £110,000) for businesses in the retail, hospitality, and leisure sectors (including pubs, music venues, cinemas, restaurants, hotels, theatres, and gyms).
The early years sector was promised an extra £170m by 2024-25. After the budget, the Children’s Minister Will Quince announced further details and explained the additional funding would be worth £160m in 2022-23, £180m in 2023-24 and £170m in 2024-25. This will be used by local authorities to increase hourly rates paid to childcare providers for the government’s free childcare entitlement.
The Chancellor also reaffirmed £150m for training of the early years workforce to support children’s learning and development (this is part of the £1.4 billion announced in June 2021 to help children catch up on lost learning).
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