Autumn Statement 2023 Announcements – At a Glance
- November 22, 2023
- Posted by: Hannah Ingram
- Category: Legislation Changes
Autumn Statement 2023
Today, on the 22nd November 2023, Chancellor Jeremy Hunt has unveiled his budget to “reward effort and work” with “110 measures to help grow the economy”. We’re exploring some of the headlines here.
The State of the economy
Many of the Prime Minister, Rishi Sunak’s, priorities look at growing the economy, creating better-paid jobs and spreading opportunities right across the country whilst ensuring that national debt is falling.
Weak GDP growth is expected to continue into next year however the inflation rate is easing up with significant progress surrounding inflation expected through the next year. This pattern of weak growth has been a trend since 2022.
National Minimum Wage to rise to £11.44 per hour
Officially announced shortly before the Autumn budget, this NMW rise will particularly effect companies in sectors including manufacturing, retail and hospitality.
- This rise, of more than a pound, will come into effect from April 2024, increasing from the current £10.42 an hour rate for workers over 23.
- What’s more this rate will also apply for 21-22 year olds for the first time who will see a 12.4% jump in their payslips.
Whether you have an established payroll team in-house or an outsourced payroll provider you’ll want to ensure you stay compliant with a smooth transition in your payroll processes from April 2024.
Cuts for National Insurance to effect 27 million workers
Employee National Insurance will be cut by 2% from 12% to 10% the largest ever cut to NI as part of the “biggest package of tax cuts since the 1980s.”
The OBR says “Reducing a tax on work means more people in work.” What’s more reducing NI could lead to 94,000 more full-time workers in the UK.
As this measure is expected to come into force from January 2024 payroll functions will want to pay close attention to ensure accurate employee payslips.
This aims to help “27 million” workers through extra money in their payslips.
Consultation on Pension Pots
Payroll teams and outsourced payroll providers will want to sit up and take note as pension savers may, following consultation, have the right to “one pension pot for life.”
“I will also consult on giving savers a legal right to require a new employer to pay pension contributions into their existing pension pot if they choose, meaning people can move to having one pension pot for life.”
This will increase the legislative and admin burden on payroll teams so whilst this offers real benefits to employees, employers will need to have a plan in place to remain compliant.
£4.5 billion Investment in the British Manufacturing Sector
£4.5bn has been pledged for UK manufacturers in funding from 2025, and to last 5 years. This is part of a drive to boost investment across 8 sectors. With £960 million earmarked for clean energy (the Green Industries Growth Accelerator). £520 million will be given to life science manufacturing to “build resilience for future health emergencies” and further promote R&D.
3 new Investment zones in England
New investment zones are expected, including in the East Midlands for Advanced Manufacturing, with 65,000 new jobs expected as a result. Financial Incentives surrounding these are set to be extended from 5 to 10 years.
Back-to-work drive for UK unemployed
There are major reforms aimed at incentivising unemployed people to return to work. What’s more, mandatory work placements for those who have been out of work for 18 months will be introduced to increase their skills and improve their employability. This drive follows the Kickstart Scheme, which previously provided funding to employers to create jobs for 16-24-year-olds.
With many people going off long-term sick every year these measures hope to drive many back into work with £1.3bn invested in helping 300K people who have been unemployed for over a year.
Outside of the Autumn Statement, formally known as the Autumn Budget, it’s also important to note that there are many steps employers can take to reduce sick days and long-term absences, both through physical conditions and mental health.
There are also planned reforms for the fit note to make treatment the first step “aiming to streamline the process and provide specialised support for people seeking work”
New Apprenticeships to be created in growth sectors
The government has acknowledged the importance of skill sets in the workplace – “No economy can prosper without investing in the potential of its people.”
£50 million will be invested in growth sector apprenticeships, including engineering and other areas, including job shortages within these skilled areas.
Childcare support helps new parents return to work
The chancellor also reminded the audience of the many changes to free childcare coming into effect, along with other measures to help parents return to work.
Self-employment sees simplified tax system and cuts
2 million people will see their tax system simplified as the Class 2 National Insurance is axed; what’s more, class 4 National Insurance will see a cut from 9% to 8%, saving self-employed people around £350 a year.
Stay tuned and check out further updates via our Talk Staff blog. Contact us if you need any outsourced payroll support or have other questions.