Tom Hadley from the REC assesses the impact of today's budget on the recruitment sector.
Today's budget has seen the Chancellor take solid steps towards improving UK business growth and job creation by implementing an internationally competitive tax regime, investing in infrastructure and freezing youth minimum wages.
The headline cut to the 50p income tax rate - down to 45p - and extra reduction in corporation tax - down 2% to 24% from April this year - will stimulate businesses to invest in their workforce and bring in new resource to boost growth.
Freezing the 16-17 and under 21 National Minimum Wages at £3.68 and £4.98 respectively will incentivise employers to take on young people, particularly when combined with the £1 billion Youth Contract which is also coming into force this April.
A number of sector specific policies also have the potential to kickstart job creation. These are our initial thoughts which we will expand upon in the coming days following talks with sector stakeholders:
- Corporation tax reliefs from April 2013 for the video games, animation and high-end television industries as part of a new plan to position the UK creative industries as the leader in Europe
- Belfast, Birmingham, Bradford, Bristol, Cardiff, Edinburgh, Leeds, London, Manchester and Newcastle to become super-connected cities, as part of the £100 million investment in super-fast broadband, plus a further £50 million bid fund for smaller towns and cities.
- £130 million Network Rail investment aimed at improving transport links around Manchester, Sheffield and the wider Norther Hub.
- Creation of a Pension Infrastructure Platform owned and run by UK pension funds, designed to free up £2 billion of investment in the construction phase of new UK infrastructure projects.
- £150 million boost to the Get Britain Building fund, now expected to pay for 15,000 new houses, creating thousands of construction jobs in the process.
- National Planning Policy Framework (NPPF) due for publication by end of March, aimed at supporting growth and new construction projects through a presumption in favour of sustainable developments.
Oil & Gas
- Strategy for gas generation due to be published autumn 2012, paving the way for expansion of gas fired power plants in the UK
- Package of oil and gas tax measures designed to secure billions of pounds of additional investment in the UK Continental Shelf
Engineering & Technical
- £60 million to establish a UK centre for aerodynamics, opening 2012-13, to support innovation in aerospace technology
Sales & Retail
- Sunday Trading laws will be relaxed from 22 July 2012 to 9 September 2012 inclusive, to allow retailers to make the most of the influx of consumers due to the Olympics
Whilst the budget is a move in the right direction, opportunities to cut EU red tape and reduce burdensome employment regulation around Agency Workers have been missed - opportunities that we believe are vital to growth in the recruitment industry and wider UK economy. We will continue to work with the government on these issues in the year ahead.
All the best,
REC Director of Policy & Professional Services
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