Business | Knowledge
Rain Newton-Smith, chief executive of the CBI
Stephen Phipson CBE, chief executive of Make UK
Joe Nellis, MHA’s economic advisor, said the Budget will shock many in the private sector, given the scale of the increase in employers’ National Insurance contributions and the reduction in the threshold at which employers pay them.
“This is effectively a tax on jobs, with SMEs – who account for a large proportion of total employment – taking the biggest hit,” Joe said.
NATIONAL MINIMUM WAGE The National Living Wage, paid to those over 21 years of age, will rise to £12.21 an hour from April 2025, an increase of 6.7%.
The National Minimum Wage will also rise in the spring, from £8.60 an hour to £10 for those aged 18,19 and 20. The separate apprentice rate, which applies to eligible people under 19 – or those over 19 in the first year of an apprenticeship – will also rise, from £6.40 to £7.55, an 18% increase.
INDUSTRIAL STRATEGY AND MADE SMARTER The Government recently launched a green paper on its modern industrial strategy, setting out eight key growth-driving sectors. The Budget confirmed that existing
funds, pledged towards the previous government’s Advanced Manufacturing Plan, will be put towards the industrial strategy. Stephen said that, looking at the bigger picture, and the medium to long-term, Make UK welcomes the Government’s clear path to growth for manufacturing with a number of positive measures. He said: “In particular, the commitment to an Industrial Strategy, the Corporate Tax Road Map, and continued support for vital programmes such as Made Smarter, are key elements of a growth plan which will enable UK manufacturing to make significant progress over the coming years.” Chris Barlow, head of manufacturing at MHA, explained there were winners and losers in the manufacturing sector from the Budget. He said: “There were also some real missed opportunities. There were no changes announced to corporation tax which is still relatively high compared to our Irish neighbours. “There were also no announcements on dealing with Europe post-Brexit which remains a significant challenge for manufacturers particularly when it comes to challenges with supply chains.”
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