On 27 October, Chancellor of the Exchequer; Rishi Sunak set out the Government’s road map to economic recovery in an (almost) post pandemic UK. In contrast to the Spring Budget, the Autumn Budget focusses on “building back better” and, as such, introduces aims and measures which align with the Government’s aim to facilitate an economy of increased wages, skills and productivity. As a result, the Autumn Budget moves away from the previous focus on measures which provide ongoing support to address the COVID-19 pandemic. Here are the key take-aways for employers from the Autumn Budget 2021.
National Minimum Wage changes in the Autumn Budget
National Minimum Wage (NMW) and National Living Wage (NLW) will have new rates apply from 1 April 2022. The new rates are as follows (per hour):
- NLW for those over 23: from £8.91 to £9.50.
- NMW for those aged 21 to 22: from £8.36 to £9.18.
- NMW for those aged 18 to 20: from £6.56 to £6.83.
- NMW for those aged under 18: from £4.62 to £4.81.
- Apprentice Rate: from £4.30 to £4.81.
- Accommodation offset rate: from £8.36 to £8.70.
The new rates are the result of recommendations made by the Low Pay Commission (LPC) who proposed the above rates to the Government in October this year.
The LPC also recommended, that regulation 57 of the National Minimum Wage Regulations 2015 (otherwise known as the ‘au pair’ exemption) be removed as it facilitates a loophole for the exploitation of migrant domestic workers. The exemption means that workers who live in the family home of their employer, are treated as a member of the family and not charged for food or accommodation do not qualify for NMW. This exemption however is yet to be revoked.
Skills and Apprenticeships increased funding
As part of the £500 million expansion of the Plan for Jobs initiative (which aims to support the unemployed aged over 50, the lowest paid, young people and those exiting the furlough scheme) the Government announced further investment intended to boost opportunities for people to upskill and retrain and an increase in apprenticeship funding. In order to facilitate this, the Government aims to expand the Lifetime Skills Guarantee through increased funding of the National Skills Fund. This increased funding will mean that the Government can continue to meet 95% of the apprenticeship training cost for employers who do not pay the apprenticeship levy and will provide improvements to the apprenticeship system for all employers, including;
- Providing potential changes which will allow employers to have more choice over how to deliver apprenticeship training; and
- Introducing a return on investment tool (in October 2022); and
- Extending the £3,000 apprentice hiring incentive until 31 January 2022
New Scale-Up Visa
The Government also confirmed in the Autumn Budget that a new Scale-Up visa route will launch in the UK in spring next year. This will permit qualifying, fast-growing businesses to hire-skilled overseas workers more readily and will be available to individuals who pass the language proficiency requirements and have a high-skilled job offer from an eligible business with a salary of at least £33,000.
This route will be available to businesses (Scale-Ups) if they can show that they are generating an annual average revenue or employment growth rate of more than 20% over a three-year period and that they had a minimum of 10 employees at the start of that three year period.
This announcement will be welcome news to many fast-growing businesses who are looking to hire the best talent from around the world as it will make it much quicker and easier to bring in highly skilled individuals to the UK from overseas.