Osborne announces economic growth and changes to state pension
Today’s Autumn Statement saw Chancellor George Osborne once again champion the “lower welfare, higher wage economy”, including a discussion of economic growth nationwide and provisions for healthcare and families.
Declaring the Conservative Government’s support for “opportunity for all, and aspirations for families”, Osborne laid out predictions that the economy will grow by 2.4% in 2016 and 2.5% in 2017.
So what are the key points in the statement for employers?
Jobs and apprenticeships
Office for Budget Responsibility (OBR) figures have estimated that a further 1 million jobs will be created over the next five years, while by 2020 we will see 3 million more apprenticeships in place, with an increased funding behind them.
This funding has been found both from the apprenticeship levy and also the changes to student finance. As set out in the July Budget, student maintenance grants are to be scrapped and replaced with bigger maintenance loans – saving a predicted £2 billion.
While Osborne claims this will encourage more students into higher education, it remains to be seen if in fact the increase in final loan to pay back will see a surge of school-leavers enter the workforce.
A contentious subject due to the current proposed changes to junior doctor contracts, the government is pressing forward with a commitment to a 7-day NHS service, in order to implement a “modern, integrated health and social care system”.
One of the most costly health issues in the workplace, cancer, will see greater support of patients due to speeded up testing (within four weeks).
Another area of healthcare of key concern to employers is also due to receive financial support: mental health services will receive £600 million in additional funding – providing better access to talking therapies, perinatal services and crisis care.
“The opposition talks about social justice. With the gender pay gap at a record low, this side delivers social justice!” Osborne crowed.
In his support of women and families, he promised a “£6 billion childcare commitment to people of Britain”.
As previously laid out in the Budget announcement, the Autumn Statement confirmed that from 2017 the government will fund 30 hours of free childcare for working families with three and four year olds.
However, there are new rules in place. £10,000 of childcare will only be allocated cost-free to parents working more than 16 hours a week and who have an income under £100,000
Employers and industry professionals alike can breathe a sigh of relief that pensions have (thus far) escaped further radical change, although Osborne announced that the DWP budget will be cut by 14%.
For the smallest businesses with auto-enrolment administration, the next two phases of contribution rate will increase in line with the tax years. Meanwhile, the State Pension Age is due to rise along with life expectancy.
In positive news, the basic state pension is undergoing the largest increase in 15 years – rising by £3.35 to £119.30 a week, “As a result of our commitment to those who have worked hard all their lives and contributed to our society.”
“Taking all our increases together over the last five years, pensioners will be £1,135 a year better off than they were when we came to office,” commented Osborne.
A new single-tier state pension for new pensioners will also come into play from April 2016, the full rate of which will be set at £155.65.
What are your views on today’s Statement? Email me on firstname.lastname@example.org, or tweet @rewardhelen – don’t forget to use #AutumnStatement!