Yesterday, Chancellor Hunt announced his Spring Budget. He asserted that his policies would usher in an era of ‘more jobs, more investment, and lower taxes.’
The Conservative leader doubled down on his stance, contending that Labour’s proposed plans could jeopardise employment opportunities and threaten family finances.
So, what are the key takeaways for HR?
A National Insurance cut
One of the key highlights of Hunt’s spring budget speech was the announcement of a significant cut to the employee national insurance contribution rate. The rate will decrease by 2p, dropping from 10 percent to 8 percent of pay. Self-employed individuals will also witness a reduction from 8 percent to 6 percent. This move follows a prior 2p cut announced in the autumn statement, bringing the overall reduction from 12 percent to 8 percent. The new rates are set to take effect from April.
Hunt justified these cuts by stating, “If we want to encourage hard work, we should let people keep as much of their own money as possible.”
AI and the future of work
The budget also included provisions to support the growth of Artificial Intelligence (AI) in the UK. Nikolaz Foucaud, Managing Director of Coursera EMEA, emphasised the need for workforce retraining to address the current skill shortages hindering effective AI implementation. He praised the Chancellor’s positive signal towards AI commitment, suggesting tax incentives and increased funding for upskilling initiatives as ways to bridge the knowledge gap. Foucaud stated, “The Chancellor has sent a positive signal about the UK’s commitment to AI. Offering tax incentives and increased funding for company upskilling initiatives can build on that momentum and help bridge the knowledge gap.”
Dan Pell, Vice President of UK and Ireland at Workday, welcomed the budget’s focus on AI, stating that it would enhance efficiencies across sectors. Pell highlighted the potential for AI to revolutionise hiring processes, reducing time and improving productivity. He commented, “With today’s announcement, the UK is nurturing the AI innovation, skills and solutions that are so clearly in demand.”
Assistance for Increased Employment Opportunities
During his address to the Commons, Chancellor Hunt emphasised the principle that those capable of working should actively seek employment.
To bolster this commitment, the government has decided to prolong the Additional Jobcentre Support pilot in England and Scotland for an additional 12 months. This initiative aims to assess the efficacy of targeted, intensive support at specific junctures in the journey of universal credit claimants, with the goal of facilitating their entry into the workforce or securing higher earnings.
Also, the government is allocating additional funding to enhance the processing of disability benefit claims. This financial support is anticipated to augment system capacity, addressing the surge in demand and ensuring that individuals receive the necessary assistance promptly. The government asserts that this funding will contribute to enabling people to access the right support in a timely manner.
Pension Reforms and Childcare Changes
The Spring Budget unveiled reforms in the pension sector, requiring pension funds to publicly compare their performance data against competitors. Schemes performing poorly for savers will be barred from taking on new business from employers.
Regarding childcare, Chancellor Hunt announced changes to child benefit payments, moving towards a household-based system by April 2026. The high-income child benefit charge threshold will increase from £50,000 to £60,000, benefitting 170,000 families. Additionally, the 30 hours of free childcare will be extended to children over nine months, supporting an additional 60,000 working parents. Hunt stated, “The changes to the child benefit system set out by the Chancellor today will be welcomed by both single and co-parents.”
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.
