Introducing his second Budget, emphasising that he will still do ‘whatever it takes”’ Chancellor Rishi Sunak said that his focus was on preventing the growth of unemployment as the country emerges from the latest lockdown.
While the undoubted success of the vaccination programme suggested that there would be a strong recovery, the Chancellor warned that there would be dangers ahead if the Government failed to prepare for the need to eventually rebalance the books, given the unprecedented sums that it had spent in battling the effects of the pandemic. Support will be extended well beyond the end of the roadmap out of lockdown, before setting out his three part plan:
- First, support people and businesses;
- Once on the way to recovery, take time to fix public finances; and then
- Begin building the future economy.
Here are the key highlights for you from an employment perspective…
Extension to furlough
The Job Retention (furlough) Scheme will be extended again, this time until 30 September 2021. Employers will be expected to pay 10% towards the hours their staff do not work in July, increasing to 20% in August and September, as the economy reopens.
If all goes to plan, this news means that the furlough scheme will remain an option for eligible businesses even after the lifting of all lockdown restrictions in England on 21 June, something that may occur sooner in Scotland and Wales but has yet to be confirmed. Presumably, this is to assist businesses in gradually working towards pre-pandemic normality whilst also allowing for any delays to England’s roadmap out of lockdown that may occur if the government’s tests for easing restrictions, at any stage, are not passed.
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Other employment updates:
- Further grants for the self-employed will be targeted at those most affected and will be extended until September. 600,000 more self-employed people will be eligible for help as access to grants is widened
- SME’s in the UK will continue to be able to reclaim up to 2 weeks of eligible Statutory Sick Pay (SSP) costs per employee from the Government.
- Help to Grow’ scheme for SMEs to upskill – the government will offer a new UK-wide management programme to upskill 30,000 SME’s over three years. It states: “Developed in partnership with industry, the programme will combine a national curriculum delivered through business schools with practical case studies and mentoring from experienced business professionals. Over 12 weeks, and 90% subsidised by government, this programme will equip SMEs with the tools to grow their businesses through tech.
- New support for providing young people with new skills, including doubling the incentive payment to SMEs to take on apprentices of any age to £3,000, and £126 million to triple the number of traineeships next year.
- National Living Wage and National Minimum Wage will increase. The new rates are available here: affinityhrm.co.uk/new-minimum-wage-rates-announced-for-2021/
- If you require HR consultancy support advice, please get in touch and one of our HR consultants will be in touch. We may not have all the answers yet but here to help where possible!
*This update is a general summary of the current guidance in England and is up to date at the time of publishing. The materials in this guidance are provided for general information purposes and do not constitute legal or other professional advice. While the information is considered to be true and correct at the date of publication, changes in circumstances may impact the accuracy and validity of the information. Affinity HRM is not responsible for any errors or omissions, or for any action or decision taken as a result of using the guidance. Specific advice should be sought.
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