Spring Budget 2024: A National Insurance Cut is Welcome but Not Enough, Say Experts

From changes to National Insurance (NI) to improved pensions in the UK, we explore Jeremy Hunt’s recent Spring Budget announcement. Then, we delve into how experts in HR have taken his statement and why many aren’t convinced it’s enough.

Jeremy Hunt’s Spring Budget 2024 Announcement

On 6 March, Chancellor Hunt announced the 2024 Spring Budget. He stated that the Conservatives have helped grow the UK economy larger than any European counterpart since 2010. He added how this was despite our historic economic struggles in recent years.

NI Contributions Cuts and Pension Reforms

Regarding the Spring Budget itself, Chancellor Hunt announced a cut to NI contributions from 10% to 8%. This will come into effect in April and keep workers better in pocket but won’t change the employer’s contribution.

In addition, pensions in the UK will see slight reforms. Public comparison between competitor pension schemes will be required, with poorly performing ones unable to acquire new business. This will ensure better accountability of the pension funds and comes after a boost of 8.5% to the Government pension was declared in the 2023 Autumn statement.

Job Benefits for Working Parents

Work benefits for parents with jobs were also addressed. First, Chancellor Hunt highlighted a flaw with child benefits. That’s because a household where both parents earn £49,000 annually will receive full child benefits, but another with one parent earning over £50,000 won’t receive the same. As such, a Government consultation to implement a household-based system by April 2026 will occur.

Second, Chancellor Hunt explained the bracket from which working parents must pay the high-income child benefit charge will change. An increase from £50,000 to £60,000 will be implemented, which he claims will result in 170,000 families no longer being required to pay.

Third, the Spring Budget announcement addressed childcare support. To help 60,000 more parents, Chancellor Hunt said the 30 hours of free childcare would be extended to children over nine months.

Employment Support

Finally, Chancellor Hunt announced a 12-month extension to the Additional Jobcentre Support pilot. Stating, “Those that can work, should”, he outlined how the scheme would examine the journey of those on Universal Credit. Here, he explained how the Government would look to support such individuals into employment and higher earnings.

Public Response to Spring Budget

“Bland and Beige” Budget

Despite Chancellor Hunt bigging up the Conservatives’ impact on the UK economy, many have stated his Spring Budget isn’t enough. The TUC’s general secretary Paul Nowak, said we’re in “the worst growth since the Great Depression”, claiming the country deserves better.

Neil Armstrong, tax director at Baker Tilly Mooney Moore, labelled it a “bland and beige budget”. He suggested the Chancellor was playing it safe, potentially in light of the upcoming general election.

Elsewhere, Ben Chaplin, managing director at Croner-i, stated, “The banter was better than the budget”. This was about the noisy atmosphere as Chancellor Hunt gave his speech. He added how the announcement was anti-climatic, as it claimed a lot of good but comprised “not much substance”.

Spring Budget Shortfalls

Others outlined issues that the budget failed to address. Adrian White, Director of the Institute for Research into Organisations, Work and Employment at UCLan, explained that whilst the NI cuts may incentivise individuals to return to work, no policy was put forward to support this.

What’s more, Ben Willmott, head of public policy for the CIPD, felt the Spring Budget had overlooked apprenticeship reforms. He believed the government needed to boost training and development for young people to address recent apprenticeship shortfalls.

Carole Easton, Chief Executive of the Centre for Ageing Better, discussed the lack of employment support for people over 50. After the Chancellor failed to provide such support that he’d promised a year earlier, she felt it was “desperately needed”. To combat this, she suggested a national programme targeted at helping job seekers who were over 50.

It’s Not All Bad

However, the public reaction wasn’t exclusively bad, with Chris Ronald, VP of EMEA B2B at Blackhawk Network, providing some positives. He felt the NI cuts combined with substantial employee benefits could help with retaining employees. In a time when finances and well-being are at the forefront of people’s minds, addressing such issues is crucial. 

Tackling employee retention doesn’t have to be expensive, though. Employers could offer job benefits such as flexible working, which may cost nothing to the business. Here, the employee may feel more valued and trusted, and the employer could see productivity gains.

Key Takeaways

The Spring Budget 2024 has raised several questions. First, are the claimed improvements enough to support people through the current economic crisis? From what many HR experts seem to suggest, the answer is that the Government still need to do more.

However, considering Chris Ronald’s remarks, could strengthening employee benefits help? Whilst this may not affect those currently out of work, those in jobs would likely benefit from such support. Ultimately, it appears the Government still needs to do more to support the public through the cost-of-living crisis, but what’s been offered has been somewhat welcomed.

If you have any questions or believe you aren’t receiving your work benefits entitlements, contact us today. Redmans Solicitors are employment law specialists and can answer your questions before advising you on your possible next steps.

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