Delivering his latest round of fiscal plans for the country today (22 November), chancellor of the exchequer Jeremy Hunt said the autumn statement would “reward work and people”.
“The government knows that a dynamic economy depends on the energy and enterprise of people, more than any diktats or decisions by ministers,” he said, adding: “Today’s measures don’t just remove barriers to investment, they reward effort and work.”
Among the areas key to this afternoon’s agenda, Hunt announced plans to reform pensions, apprenticeships and pay for workers.
However, Rachel Reeves, the shadow chancellor, responded to Hunt’s speech by saying that “working people are still worse off”.
She said that “the reality of the Conservatives’ record is that average wages for working people have been held back”, and the government has “held back growth, crashed our economy, increased debt, trashed our public services, left businesses out in the cold and made life harder for working people”.
Here are some quick takeaways from today’s announcement that HR professionals should take note of:
£50m boost to apprenticeships
“No economy can prosper without investing in the potential of its people,” Hunt said, adding that the government would use the statement to focus on “skills”.
He announced that the government will introduce £50m in funding over the next two years to boost the levels of apprenticeships in the UK in engineering and “other key growth areas”.
Improve flexibility to pensions
The chancellor also said the government will commit to triple-locking pensions, with the state pension to increase by 8.5 per cent in April in what is the second biggest ever rise. It comes during an extended period of high inflation, which has squeezed people’s disposable income and diminished the value of their savings.
Further pension reforms included commitments to consolidate pensions, with Hunt adding that the government will consult on giving workers a “legal right to require a new employer to pay pension contributions into their existing pension pot if they choose, meaning people can choose to have one pension pot for life”.
National living wage increased by 10 per cent and expanded to younger workers
The government announced the biggest increase to the national living wage in more than a decade, as a response to the cost of living crisis. It will rise by 9.8 per cent from April, increasing from £10.42 to £11.44 per hour. For the first time, it will be expanded to cover 21 and 22 year olds.
The national minimum wage rates for younger workers will also increase, with 18 to 20 year olds seeing their pay rise by £1.11 an hour to £8.60.
Pay for those undertaking apprenticeships will also rise, with an 18-year-old apprentice in industries including construction seeing their minimum hourly pay increase from £5.28 to £6.40 an hour.
Cut to national insurance contributions
Employees will see the main rate of national insurance cut from 12 per cent to 10 per cent. The change will be rolled out from 6 January 2024, rather than the new tax year in April.
National insurance is currently charged at 12 per cent on earnings between £12,571 and £50,271 and 2 per cent on anything above that. The government said this will cut tax for 27 million people.
Benefits for jobseekers reformed
As People Management reported earlier this week, Hunt announced the government’s Back to Work Plan, which will focus on supporting those with long-term sickness and disabilities back into work. “Every year we sign off over 100,000 people on benefits [owing] to sickness and disability. That waste of potential is wrong economically, and wrong morally,” he said.
The chancellor said this would include reforms to fitness notes and work capability assessments, as well as helping people with health conditions find jobs.
It also includes welfare reforms. Hunt announced that the government would provide an additional £1.3bn of funding to help the 300,000 people in the UK who have been unemployed for more than a year without any sickness or disability.
“But we will ask for something in return,” he said. If after 18 months of support jobseekers have not secured employment, the government will roll out a programme requiring them to take in mandatory work placements. If jobseekers do not engage with this scheme for six months, they will see their benefits end.