November Budget

Philip Hammond delivered the first November Budget for 21 years on the 22 November 2017. Although expected to be a duller affair than normal, there were a number of employment initiatives outlined that organisations need to be aware of.

The Chancellor confirmed the minimum wage increases that will take effect from April 2018.

National living wage, the rate for workers aged 25 and over, will increase by 4.4 per cent from £7.50 to £7.83 an hour.

Over a year, this increase will give a full time worker a £600 pay increase.

The government has also accepted the Low Pay Commission’s recommendations for national minimum wage (NMW) increases. From April 2018, the following increases will apply:

Workers aged 21-24 – NMW will increase from £7.05 to £7.38 an hour
Workers aged 18-20 – NMW will increase from £5.60 to £5.90 an hour
Workers aged 16-17 – NMW will increase from £4.05 to £4.20 an hour
Apprentice rate – will increase from £3.50 to £3.70 per hour
The Budget was used to repeat the government’s commitment to deliver three million apprenticeship starts by 2020 through the operation of the apprenticeship levy. The levy, introduced in April 2017, requires organisations with an annual turnover of more than £3 million to pay 0.5 per cent of their pay bill in to a digital levy account. This money is then available to spend on apprenticeship training for 24 months before expiring.

The Chancellor announced the government will review the flexibility levy payers have to spend their money. Although no further details were announced, this may look at extending the time organisations have to spend the money in their levy account or improve the way group structures can share their levy payments.

A new National Retraining Scheme will be introduced. The government will work in partnership with the Trade Union Congress and the Confederation of British Industry to develop a scheme that supports workers with retraining during their working lives. It will provide the opportunity to gain skills that are necessary for future workplaces. At first, the scheme will focus on certain sectors and will initially look to provide retraining on construction and digital skills.

In the Budget document, it was further announced that the government will publish a discussion paper in response to Matthew Taylors review on ‘Modern working practices’. This paper will explore the options available to clarify employment status tests for both employment rights and tax.