The new Growth and Skills Levy must end the ‘cycle of policy failure’ in addressing Britain’s chronic skills shortages, according to the Resolution Foundation.

The think tank says the government must get its design and implementation right if it’s to boost the number of apprenticeships after years of decline and ensure that Levy funds go to young people who need it most.

The Foundation says that Britain’s chronic skills shortages are underlined by the fact that the share of job vacancies caused by firms finding it hard to recruit people with the right skills or qualifications has more than doubled over the past decade from 16% in 2011 to 36% in 2022.

Skills shortages aren’t just preventing firms from recruiting either: an increasing share of workers are judged by their current employers to not have the right level of skills required to do their job.

Louise Murphy, Senior Economist at the Resolution Foundation, said:

‘For too long, well-intentioned reforms have failed to end the cycle of failure when it comes to addressing chronic staff shortages across Britain.

‘One-in-three vacancies today stem from firms not being able to find people with the right skills, while too many young people struggle to find a route into skilled work that doesn’t involve university.

‘The new Growth and Skills Levy offers a fresh chance to break this cycle. But the government must get the detail right if it’s to avoid repeating the same policy mistakes.’

Internet links: Resolution Foundation

More than 10,000 payments worth £12.5 million have been made through a new digital service to boost people’s state pension, HMRC has revealed.

People have until 5 April 2025 to maximise their state pension by making voluntary National Insurance contributions (NICs) to fill any gaps in their NICs record between 6 April 2006 and 5 April 2018.

The service enables people to check if they have gaps in their NICs record, calculate if making a payment would increase their state pension, and then make a payment if they wish to do so.

HMRC data shows:

• 51% of taxpayers topped up one year of their NICs record
• the average online payment is £1,193
• the largest weekly State Pension increase is £107.44.

After the 5 April 2025 deadline, people will only be able to make voluntary contributions for the previous six tax years, in line with normal time limits.

Emma Reynolds, Minister for Pensions, said:

‘We want pensioners of today and tomorrow to enjoy the dignity and support they deserve in retirement. That’s why I urge everyone to check if they could benefit by filling gaps before the deadline passes. Using our online tool means only a few clicks could make a huge difference to your future.’

Check your pension here.

Internet link: GOV.UK

The government’s Make Work Pay Bill lacks a pro-growth element and will increase economic inactivity, the Federation of Small Businesses (FSB) has warned.

The business group says that the legislation, particularly around day one dismissal rights, risks deterring small employers from taking a chance on someone who has had a significant period out of the workplace, shutting those doors and deepening social exclusion

It warns that the Bill is rushed and poorly planned while dropping 28 new measures onto small business employers all at once leaves them scrambling to make sense of it all.

There are already 65,000 fewer payroll jobs since Labour took power, and the new government is sending out a ‘troubling signal to businesses and investors’, the FSB adds.

Tina McKenzie, Policy Chair at the FSB, said:

‘The Chancellor has the opportunity to lead the way in adding a pro-business, pro-employment element to Make Work Pay in her upcoming Budget. This should include a rise in the Employment Allowance, pegging it to future rises in the National Living Wage. It should also include the reintroduction of the small business rebate for Statutory Sick Pay.

‘Sufficient time should be taken to avoid this becoming a hastily cobbled-together Act of Parliament. We look forward to more engagement and the start of a full consultation on each individual measure to ensure the voice of small employers is heard.’

Internet links: FSB

Chancellor Rachel Reeves pledged to ‘invest, invest, invest’ to drive growth and ‘restore economic stability’ in the Autumn Budget.

The Budget, which was Labour’s first in over 14 years and the first ever delivered by a female Chancellor, saw £40 billion in tax announcements. 

Ms Reeves repeated her claims that the government had inherited a £22 billion ‘black hole’ in the public finances from the Conservatives. 

Pre-Budget speculation had centred on the likelihood of increases to employers’ National Insurance contributions (NICs), Capital Gains Tax (CGT) and Inheritance Tax (IHT).

The Chancellor announced an increase to the rate of employer NICs by 1.2 percentage points to 15% from 6 April 2025. However, the Secondary Threshold – the level at which employers become liable to pay NICs on each employee’s salary – will reduce from £9,100 per year to £5,000 per year.

CGT on non-residential assets will increase from 10% to 18% for those paying the lower rate, and 20% to 24% for those paying the higher rate for disposals from 30 October 2024. These new rates will match the residential property rates. The CGT rates applicable to assets qualifying for Business Asset Disposal Relief (BADR) and Investors’ Relief will remain at 10% this year, before rising to 14% from April 2025 and 18% from April 2026.

The IHT nil rate band remains unchanged at £325,000 although from April 2027 inherited pension pots will be brought into the IHT net. The government says this will remove a distortion which has led to pensions being used as a tax planning vehicle to transfer wealth rather than their original purpose to fund retirement.

From April 2026, agricultural property relief and business property relief will be reformed. The highest rate of relief will continue at 100% for the first £1 million of combined business and agricultural assets on top of the existing nil rate bands, fully protecting the majority of businesses and farms. The rate of relief will reduce to 50% after the first £1 million. 

The Chancellor also confirmed that VAT will be in on private school fees and abolishment of the non-dom tax regime.

Ms Reeves said she would protect living standards by unfreezing the thresholds on Income Tax and NICs from 2028 while she extended the cut in Fuel Duty for another year. 

Reeves said:

‘The choices I have made today are the right choices to restore stability to our public finances, to protect working people, to fix our NHS and to rebuild Britain.

‘That does not mean that these choices are easy, but they are responsible.’

Internet link: GOV.UK