Chancellor Rishi Sunak has outlined the Government’s spending plans in the Autumn Statement, focussing on “levelling up” the nation following the pandemic. 

The Autumn Statement unveiled several key changes as the UK hurtles towards the Prime Minister’s “new economy” which Sunak described as entailing “higher wages, higher skills and rising productivity”.

Immigration and Recruiting Overseas Talent 

A pivotal policy introduced by the Chancellor was the new Scale-Up Visa, expected to launch in Spring 2022 – a system intended to allow fast-growing businesses to attract highly skilled individuals in the UK.

Sunak stated “this would make the visa system for international talent the most competitive in the world”.

Tijen Ahmet, head of business immigration at law firm, Shakespeare Martineau, reacted to this, stating the Scale-Up visa would be most useful for tech-based industries but may not help lower-skilled workers:

The chancellor’s Budget sets out again to keep the UK at the forefront of global innovation and recognises that people are central to that goal. The scale-up visa will be particularly useful for tech-based and knowledge-intensive industries which rely on attracting the brightest minds from across the world.

However, there is an elephant in the room and this Budget comes at a time where a lack of European drivers is causing a nationwide supply chain crisis.

Recognising haulage drivers as skilled workers, or updating the shortage occupation list temporarily, would be a simple, practical step that could have a huge positive impact.

Public Sector Pay Rises

The Chancellor confirmed that public sector workers will see “fair and affordable pay rises” across the whole spending review period.

National Living Wage Increase 

As previously speculated, the National Living Wage will rise to £9.50 an hour, an increase of 6.6 per cent, from next April.

This could help to benefit over two million of the lowest-paid workers in the UK, Sunak stated. He also added this keeps the Government on track for the National Living Wage to reach 2/3 of median earnings by 2024.

Graham Griffiths, Director at the Living Wage Foundation, expressed his view that the real Living Wage is more useful in accounting for the actual rise in living costs:

The rise in the National Living Wage is a positive step for so many workers who have been working hard and struggling to make ends meet. This significant increase will go some way to easing the pressure on households feeling the squeeze, but there is still a substantial gap between the government’s 2022 rate and the rising cost of living.

Our annual rate announcement in November will see more than 300,000 people get a vital pay boost to a wage which is significantly higher than the National Living Wage, providing hundreds of thousands workers with the security and stability they need.

It applies to all workers over 18 – in recognition that young people face the same living cost as everyone else.

Skills Investment 

Reiterating information released earlier this week, the Chancellor formally announced the £3 billion injection into skills.

The spending package is set to include £1.6bn to support the roll-out of T Levels, technical qualifications, £550 million for adult skills boot camps and £170 million towards funding apprenticeships.

Deputy CEO of the Recruitment & Employment Confederation Kate Shoesmith reacted to this, stating:

Today’s pledge for more spending on skills is a step in the right direction – but what is long overdue is a revolution in how we deliver training and skills. The apprenticeship levy is acting as a brake on prospects for young people, and progression for many workers.

It needs to be overhauled, so that it supports people at and into work properly. There is also still not enough focus on entry-level skills, where the most acute shortages are, so we hope to see more on that in the detail of the skills bootcamps announcement.

This sentiment was echoed by Robert Half’s UK Managing Director, Matt Weston who said:

Building skills amongst younger generations is important for ensuring that businesses can flourish in the future, but it does not support the companies who are trying to find experienced talent now.

While the Government is taking steps to attract highly skilled talent from other countries by including a ‘scale-up’ stream within its proposed points-based visa, further measures to support mid and high-level skills development on UK soil would be welcomed by companies in the fastest growing sectors.

Other notable policies announced in the Budget included:

  • A new 50 per cent business rates discount for companies in the retail, hospitality, and leisure sectors, lasting for one year.
  • £560m commitment, seeing up to 500,000 people receive free personal tutoring or digital training in Maths through the Multiply Scheme.
  • Cutting the taper rate for Universal Credit from 63 per cent to 55 per cent, allowing people to keep more of what they earn.