The Chancellor has announced his spring budget and said the UK will now not enter a ‘technical recession’ this year.
It comes against a dramatic backdrop of high inflation, widespread strikes and the cost of living crisis.
The announcement has been pitched as the ‘back to work budget’ with measures to ensure more people return to the office nearly two years after the end of the pandemic.
He told the Commons: ‘We remain vigilant, and will not hesitate to take whatever steps are necessary for economic stability.
The measure is expected to save the typical household £160 per year.
Hunt outlined his four pillars for growth – enterprise, employment, education and everywhere – with a focus on supporting those who are economically inactive or out of the labour market to get back into work. The announced reforms aim to “remove the barriers” that stop people from working.
Hunt said: “We have around one million vacancies in the economy, but excluding students there are over seven million adults of working age who are not in work; that’s a potential pool of seven people for every vacancy.”
We have summarised the key points for employers to be aware of from an HR perspective.
There will be more support for employees to help with the cost of living. Funding was also announced for specific sectors, such as leisure centres and charities, to help manage increasing energy bills and costs.
A number of childcare reforms to support working parents, or those returning back to the workplace, were announced.
Free childcare for working parents in England will be expanded to children between the ages of nine months and two, today’s Spring Budget has confirmed.
At the moment, only families with three and four-year-olds qualify for 30 hours of free childcare per week. Under new plans, children over the age of nine months will be eligible for the additional support.
Hunt announced a “revolution in childcare… today’s childcare reforms will increase the availability of childcare, reduce costs and increase the number of parents able to use it” acknowledging that “if we really want to remove the barriers to work we need to go further”. He announced that 30 hours of free childcare for every child over the age of nine months with working parents would be available by September 2025, and introduced in phases:
This will be rolled out in stages:
The annual Women in Work index by consulting firm PwC saw the UK fall five places in terms of affordable childcare, noting that many women were priced out of returning to work due to childminder or nursery costs.
This will not be fully implemented until after the next general election in 2025, and many families will not be eligible. Joeli Brearley, CEO of Pregnant Then Screwed, a group that has been campaigning for investment in the childcare sector for almost a decade, welcomed the move.
But she stressed that the Confederation of British Industry (CBI) has estimated that to do what the government is planning costs £8.9 billion, not £4 billion. ‘We need to see the detail as to how this money is being distributed,’ the founder said.
‘Reports suggest they will also give £288 million to make up the shortfall for the current free hours entitlement for three and four-year-olds – that is not enough.
‘It will not make up that shortfall and we are concerned the quality of early years education will deteriorate, more providers will close and childcare professionals will leave the sector.
‘It is great we will have these new free hours but it will not work if parents cannot secure a place.
‘We are also concerned about increased ratios, there is no evidence that it will cut costs, but there is evidence that it will reduce quality.
‘The first five years of a child’s life are foundational to their future and so we will pay for this further down the line.’ Home – Pregnant Then Screwed
Spring Budget response from Pregnant Then Screwed – Pregnant Then Screwed
People in work will be able to save more money for retirement tax-free, the government announced. Hunt announced an increase in the pensions tax-free annual allowance from £40,000 to £60,000 to incentivise highly skilled workers to stay in work saying that “No one should be pushed out of the workforce for tax reasons”.
Aiming to attract “older workers” back into the labour market, Hunt announced a new type of apprenticeship for the over 50s: returnerships. “No country can survive if it turns its back on the wealth of talent and ability. I want to make it easier for those who wish to – to work longer,” Hunt mentioned.
Jeremy Hunt described a series of changes to disability benefit as the ‘biggest change to our welfare system in a decade’.
A new voluntary employment scheme for disabled people and those with health conditions, called universal support will be funded in England and Wales. Up to £4,000 per person will be invested to support 50,000 people per year to find a “suitable role to cater to their needs”.
Hunt said: “With Zoom, Teams and new working models that make it easier to work from home, this [supporting those with disabilities and/or long-term sickness back into work] is possible now more than ever”.
Under his ‘employment’ pillar for growth, Hunt said: “We also want to help those forced to leave work because of a condition such as a back pain or a mental health issue; we should give them support before they end up leaving their job.”
He announced a £406m plan to “tackle” health issues keeping people out of work – with a focus on mental health, musculoskeletal conditions and cardiovascular disease.
Scrapping of the work capability assessment
Chancellor Jeremy Hunt announced the scrapping of the work capability assessment (WCA) to assess eligibility for sickness benefits.
WCAs have come under fire in the past for allegedly mis assessing those who are too ill to return to work, and insisting on repeated assessments even of patients with long term illnesses which are unlikely to improve.
The change will allow disabled people to work without fear of losing their benefits, a move the Government hopes will boost employment figures.
Spring Budget 2023 factsheet – Labour Market Measures – GOV.UK (www.gov.uk)
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