Furlough extension and rise in corporation tax among measures announced in Budget

Chancellor Rishi Sunak has set out new measures to support the UK’s recovery from Covid-19, including an extension to the furlough scheme and a future increase in corporation tax.

The Coronavirus Job Retention Scheme will be extended until the end of September and the Self-Employment Income Support Scheme (SEISS) will?continue with additional grants. Around 600,000 more self-employed people will be eligible for financial help as access to grants is widened.

Meanwhile, there will be a freeze on the income tax personal allowance and higher rate threshold from next year until 2026.

The rate of corporation tax will go up to 25%, but this will not take effect until 2023 in order to support the recovery. The new rate will still be the lowest in the G7, Sunak noted.

There will also be protections for smaller businesses. Firms with profits of £50,000 or less, which represents around 70% of actively trading companies, will continue to be taxed at 19% and a tapered rate will be introduced for profits above £50,000, so that only businesses with profits of £250,000 or greater will be taxed at the full 25% rate.

The Chancellor also unveiled a two-year “super deduction” scheme, allowing companies to reduce their tax bill by 130% of the cost of new investments.

According to new estimates from the Office for Budget Responsibility, the UK economy will grow by 4% this year and return to its pre-pandemic size six months sooner than previously expected.

The pace of growth is forecast to strengthen to 7.3% in 2022, followed by growth of 1.7%, 1.6% and 1.7% in subsequent years.

Unemployment is now expected to peak at a lower rate of 6.5%.

Sunak said that Covid-19 had caused “acute” damage to the UK economy and it would take the country, and the whole world, “a long time to recover from this extraordinary economic situation”.

But he added: “We will recover.”

Four-day week ‘affordable for most firms’

Most firms in the UK could afford to switch to a four-day (32 hour) working week, according to a new study.

The research by think tank Autonomy is based on profitability statistics on over 50,000 UK firms, with a simulation of best- and worst-case scenarios regarding profit rates under a sudden imposition of a four-day week.

It found that under the best-case scenario, a reduction in hours would be fully offset by increases in productivity and price increases.

Even under the worst-case scenario, a four-day week with no loss of pay would be affordable for most firms once the initial phase of the Covid-19 crisis has passed, it said.

However, the organisation warned that some firms in industries with high labour costs could experience cash flow problems if a four-day week was implemented too quickly.

The report recommends that the public sector should lead the way in adopting shorter working hours.

A shorter working week would boost wellbeing, improve productivity and give employees a much better work-life balance, according to Peter Dowd, Labour MP for Bootle and former Shadow Chief Secretary to the Treasury, who welcomed the findings of the study.

“For the large majority of firms, reducing working hours is an entirely realistic goal for the near future,” said Will Stronge, director of research at Autonomy.

“Any policy push will have to be carefully designed, and different strategies would need to be deployed for different industries,” he added. “However, what is remarkable is that if it happened overnight, with no planning, most firms would still remain profitable.

“The four-day week is picking up momentum across the world post Covid-19 and we’re calling on the government to begin investigating the best options for rolling it out.”

Options After You Have a Baby

When you become a new mother, you may feel like you no longer have any choices available to you. A loss of identity is normal, especially if this is your first child. In the first few weeks after giving birth, you may want to focus solely on your baby, and not give your future a second thought. However, after some time, you might start considering what you want to do with your life outside of parenthood.

It is completely normal and important that you still have personal goals, and an identity, outside of motherhood. Figuring out what you do in the future, when your child is with a childminder, family member, or at preschool, can be fairly daunting. Depending on your home situation, and income, there can be several options at your disposal.

Work from Home

For some women, it may be possible to stay at home with their baby and not need to worry too much about their finances. For others, that may feel like it is not a possibility due to the need for extra income to pay the bills. This is where working from home can benefit you greatly. If you are able to come up with a business idea that will work for you, you could always work from home on a self-employed basis. Using email and telephone communication, your skillset, a computer, and invoicing software, it is possible for you to generate either a full or subsidiary income while also raising your child.

Return to Work

Some women may want to have time away from their family, and that is natural, or perhaps they simply do not want to work within their home. At the same time, these may also be women who have worked hard to build up their career, or simply enjoyed their job prior to giving birth. By discussing a return to work with your employer, as well as the potential for flexible hours to suit your parenting needs, you might be able to continue working and parenting at the same time.

Return to Education

If you have childcare covered, and are able to survive without working, or on reduced hours, you may also want to consider returning to education. Studying as a mature student is increasingly popular, and there are many educational routes available. Some parents like to study full time, the same way that a lot of school leavers do. Others may prefer to learn on a part time basis, so they can still manage their home. Some providers may also offer courses via distance learning, meaning you could gain a qualification from home while looking after your baby.

Whatever you choose to do, it is important that you recognise that you are still a woman and an individual. Being a mum is just one part of who you are and, while important, you want to continue nurturing the rest of yourself too.

Almost 500,000 redundancies planned since start of pandemic

Employers in Britain were preparing to make 58,000 redundancies in August, taking the total to 498,000 for the first five months of the Covid-19 crisis.

Figures released to the BBC in response to a freedom of information request show that during August a total of 966 employers told the UK Government of plans to cut 20 or more jobs, compared with 214 last August.

Under legislation that applies in England, Scotland and Wales, employers must notify the Insolvency Service if they plan to make 20 or more workers redundant in any single “establishment” using a form called HR1.

The 58,000 positions at risk in August represents an improvement from both June and July, when employers planned to make 150,000 job cuts.

Following the record economic downturn earlier in the year as lockdown was imposed across the country, the UK economy recovered somewhat in the summer as employees were encouraged urged to return to the workplace and schemes such as Eat Out To Help Out enticed consumers to spend more.

“There was a sense of optimism in August, we were starting to see more spending and more activity, there were hopes for a quick recovery,” Rebecca McDonald, senior economist at the Joseph Rowntree Foundation think tank, told BBC News. “That seems a lot less likely now.”

The high numbers for June and July may also have been partly caused by firms initiating redundancy processes ahead of the end of the furlough scheme on 31 October.

According to official data from the Office for National Statistics (ONS), employers made 156,000 redundancies from May to July, up from 107,000 in the previous three-month period.

UK employment shows biggest drop in over a decade

UK employment shows biggest drop in over a decade

The number of people in work in the UK has fallen by the largest amount in over a decade, new figures show.

It comes after the UK Government imposed a nationwide lockdown on 23 March to help stop the spread of coronavirus.

Around 730,000 people have become unemployed since March, the Office for National Statistics official statistics (ONS) said — the biggest quarterly decrease since 2009.

Younger workers, older workers and those in lower-skilled jobs were worst hit.

“This is concerning, as it’s harder for these groups to find a new job or get into a job as easily as other workers,” said Jonathan Athow, deputy national statistician at the ONS.

With many people furloughed, the ONS also registered a record low in the number of hours worked.

And there were pay decreases for those still working. Regular pay levels were down 0.2% compared with a year earlier — the first negative pay growth since records began in 2001, BBC News reported.

The next quarterly figures are expected to show a big increase in unemployment as the furlough scheme winds down.

Jeremy Thomson-Cook, chief economist at Equals Money, said that the true level of those out of work had been “very effectively lowered” by the job retention scheme and the worst was still to come.

“Unfortunately, the end of the furlough scheme will present a cliff-edge, statistically and economically, for those currently relying on government support to make up their wages,” he warned.

Capital Economics forecasts that the unemployment rate will rise from 3.9% to around 7% by mid-2021.

Big companies use apprenticeships to cut costs, according to report

Low-skilled jobs are being reclassified as apprenticeships by companies in a bid to gain subsidies for training workers, according to a report from the think tank Reform.

The centre-right think tank says companies are repackaging existing roles since an apprenticeship levy was introduced to incentivise their use. Reform says 40% of government-approved apprenticeship standards would not meet the traditional definition of an apprenticeship.

Companies with a payroll worth more than £3m now have to pay 0.5% of the total salary amount into an HMRC ‘digital account’ which can be ‘spent’ on apprenticeship delivery training through government-registered providers. Employers can claim back 90% of the cost of training.

Offering an apprenticeship enables employers to pay less than the national minimum wage. Minimum rates for apprentices range from £3.70 and hour to £7.38 per hour.

The government has previously said that apprenticeships have to be skilled roles, requiring substantial and sustained training of at least 12 months, leading to full competency and providing the apprentice with transferrable skills in the occupation.

However, large companies have been using the scheme to advertise low-skilled roles such as serving coffees and making fast food.

The report claims that some employers are using the opportunity to offer high quality apprenticeships, but others are simply using the system as a way to reduce costs.

ECJ clarifies rules on pregnant workers’ rights

The European Court of Justice (ECJ) has ruled that firms are able to sack pregnant women as part of general cuts to staffing without breaching rules on protecting pregnant women, according to BBC News.

The ECJ held that Spanish bank Bankia was entitled to dismiss employee Jessica Porras in 2013 as the dismissal was not connected to her pregnancy.

EU Directive 92/85 bans dismissing a pregnant worker from the start of pregnancy to the end of maternity leave. However, there are exceptions for national laws where a dismissal is not connected to pregnancy.

The High Court of Catalonia asked the ECJ to clarify the rules on pregnant workers’ rights following Ms Porras’ appeal against a court ruling in Mataro near Barcelona.

Under EU rules, an employer must give written reasons for making a collective redundancy and inform the pregnant employee of the criteria for choosing who will be dismissed.

The ECJ found that Bankia had met its obligations by consulting workers’ representatives about the forthcoming job cuts and had sent Ms Porras a letter outlining the reasons. The ECJ found Ms Porras had been given a low score in an assessment.

Annual immigration into the UK to fall 100,000

Brexit is set to reduce annual immigration into the UK by 100,000 even if talks with the European Union result in a smooth deal, according to economists from Bank of America Merrill Lynch (BAML), the Telegraph reports.

The bank cites strong economic performance in eurozone countries as a counter incentive to emigration to the UK. These attractive conditions are likely to keep would-be immigrants at home whereas they would have once sought work in the UK.

The weak pound has also made jobs in the UK less attractive as migrants’ earnings are worth less in their home currencies, including the Euro. Net immigration is now at 300,000 per year.

The BAML estimates mean that several hundred thousand fewer workers will come to the UK in the next few years. Analysts said that if by 2022, 350,000 fewer people arrive than previously projected, the UK economy could be negatively impacted.

The UK government has previously stated that it aims to limit net migration to the UK at 100,000 people per year. BAML said it would view this potential outcome as a ‘hard Brexit’ if agreed in the EU withdrawal talks.

Despite this goal, the UK economy is currently performing well and unemployment is at its lowest level in 42 years, suggesting a need for immigrant workers.

UK employment rate increases

Official figures for UK employment were higher from May to July this year, according to the Office for National Statistics (ONS) statistical bulletin on the UK Labour Market released on Wednesday.

From May to July 2015 there were 31.09 million people in work, an increase of 42,000 compared to February to April 2015. The latest figure is also up by 413,000 over the same period in 2014.

ONS data shows that there were 22.74 million people working full-time in the UK in the period reported, 361,000 more than the prior year, while there were 8.36 million people working part-time, a rise of 52,000 year-on-year.

The proportion of people aged from 16 to 64 who were in work, which is reported as the employment rate, amounted to 73.5%. This percentage was only slightly different compared with February to April 2015, but higher than for a year earlier, when it was recorded as 72.8%.

British people who were not in work but seeking and available to work, numbered 1.82 million, which meant there were 10,000 more unemployed people than for February to April 2015. However, this number was 198,000 fewer than May to July in 2014.

The UK unemployment rate, which represents the proportion of the labour force who were unemployed, stood at 5.5%, unchanged compared with February to April 2015. But the rate was 6.2% lower than for a year earlier.

According to the ONS report, there were 8.99 million people aged from 16 to 64 who were economically inactive, meaning those not working and not seeking or available to work. This figure was 24,000 lower than for February to April 2015 and 65,000 lower than for the year before. The proportion of people aged from 16 to 64 who were economically inactive, known as the inactivity rate, was 22.1%, flat compared with February to April 2015 but down slightly from a year earlier , when it was recorded as 22.3%.

When comparing May to July 2015 with a year earlier, both total pay including bonuses and regular pay, not excluding bonuses, for employees in the UK, was revealed to have increased by 2.9%.

Women bear the brunt of unemployment

Out of 28,000 people that lost their jobs between November and January, 22,000 were women.

That means a staggering eight out of ten workers to lose their jobs were female.

The latest employment statistics show a worrying trend where women are the hardest hit by unemployment.

The number of women accepting part-time work because they could not secure full-time employment is at its highest level for twenty years.

The amount of women claiming job seekers allowance is also at its highest for 17 years, reaching 531,000.

The number of women on jobseekers allowance has more than doubled since the credit crunch in August 2007 when the number stood at 228,000.

Liam Byrne, Labour’s work and pensions spokesman, said: ‘The surge in women’s unemployment is reaching shocking levels.’

Dave Prentis, general secretary of Unison, said: ‘Women are still being hit hardest by job losses.

‘It is shameful to see that not only are women bearing the brunt of the recession, they are unemployed in record numbers and are hardest hit by the cuts to public services and jobs.’

The figures published by the Office for National Statistics this week show that older females are suffering more so than younger women.

The number of women between the ages of 50 and 64 are at record levels, with 148,000 women job hunting.