“The Budget will provide welcome support for some working people and for hard-pressed public services.
“However, the increased business costs announced in the Budget, alongside the raft of changes planned to employment regulation, are bound to act as a headwind to growth. There are real risks that together these measures could disrupt many employers’ recruitment and skills investment plans.
“Consequently, it’s crucial the Government sets out its plan to work with business to support growth across the economy. It’s essential the forthcoming Spending Review and Industrial Strategy set out how the Government will work with employers to raise productivity in ‘everyday economy’ sectors and not just in a limited number of ‘high growth sectors’ at the sharp edge of innovation and R&D.
“Increasing productivity will require changes to key areas of policy such as skills, innovation and business support to boost business investment in people management and technology adoption.
“Overall, there was a lack of detail in how private sector business investment and growth will be supported in workplaces across the country. This is essential to help businesses absorb the costs of the increase to the minimum wage and to employer National Insurance contributions. It’s vital that the Spending Review and Industrial Strategy set out a bolder vision for growth.”
On specific measures
On rises to the National Minimum Wage:
“This rise in the National Minimum Wage will be welcomed by many employees and will also bring in more people into pension savings and boost the amounts being saved. However, many businesses may struggle to absorb the increase and could end up passing this on through higher prices, accepting lower profits or cutting headcount.
"It should also be recognised that previous significant increases to the National Minimum Wage haven’t acted as a catalyst to businesses becoming more productive. Improving productivity in low-wage sectors will need to be a priority for the Government’s new industrial strategy, alongside its focus on a limited number of high-growth potential industries.
On employer National Insurance contribution increase:
"The increase in employer NationaI Insurance contributions will have a negative impact on business investment, for example on wages and jobs for many employers and could cause profits to fall. It is likely many firms will absorb this rise through raising prices, which could also have inflationary impacts. However, the proposal to exempt small firms from the increase is extremely welcome.
On productivity:
"This Budget has cemented the Chancellor’s ambition to boost economic growth but it’s essential that this also targets the ‘everyday economy’ sectors that employ millions of workers, not just those on the sharp edge of innovation and R&D. This will help to raise productivity and help employers to manage the cost of NICs rises and other measures introduced in today’s Budget.
The Get Britain Working plan is welcome effort to help people enter and stay in work:
“Get Britain Working is a welcome initiative to bring together national and local efforts to boost the number of people in work and join up services to support employment, health and skills development. Ensuring people have access to jobs that give them flexibility to help manage health conditions and provide training and development opportunities will also be key.
"There must also be a strong focus from the Government on improving access to occupational health services for those in work. This will ensure that health conditions can be addressed and early on, so fewer people fall out of work due to a disability or long-term health conditions."
