Chancellor Philip Hammond recently delivered his first (and last) Autumn Statement. In this he announced that growth will be lower after Brexit, a ban on letting agent fees for tenants and the end of the Autumn Statement...
Chancellor Philip Hammond recently delivered his first (and last) Autumn Statement. In this he announced that growth will be lower after Brexit, a ban on letting agent fees for tenants and the end of the Autumn Statement (there will just be a budget in the Autumn from now on).
But what affect does this have on the UK recruitment market and the world of work?
Let’s start with the area that directly affects most people – wages.
From April next year the National Living Wage (the minimum hourly rate for all workers aged 25 and over) will rise from £7.20 an hour to £7.50 an hour. This means an extra £500 a year for a full time worker earning it. Great news, but could this increase in cost to businesses mean less jobs? The Local Government Association has already said the move will cost councils £337 million in 2016/17. An increase in the tax-free personal allowance means that workers will get to keep a little more of their earnings too.
The chancellor announced a number of spending projects that should create jobs. Some were very obvious, 2,500 additional prison officers will be hired, but some less so.
In total there was a commitment for 150,000 new homes which will certainly create jobs along with more than £1 billion for the transport networks. With an extra £450 million, the railways should be able to hire more engineers.
More broadly the chancellor is aiming to increase productivity in the UK, making us all able to work a little bit better by faster roads, better broadband and fewer train delays. He says the aim is a ‘high-wage, high skill economy that will deliver higher living standards'. Former chancellor Lord Lamont has said this will be difficult.
From April 2017 employers and employees using salary 'sacrifice schemes' will not get a tax benefit from them. Currently employees save on tax by paying for these benefits before tax is taken, while employers save on paying National Insurance on the sacrificed wages.
These benefits include health checks, gym memberships and mobile phone contracts but ultra-low emission cars, pensions savings and advice, childcare and the cycle-to-work scheme will be excluded.
Alex Fleming, Managing Director of Adecco Retail says:
“There was a lot of give and take in this budget but there probably wasn’t a lot the chancellor could do. That said the rise in the minimum wage is great news for those who need it. If he manages to stimulate the economy it will be highly valuable in terms of job creation going forward.”