In the first part of this community comments article we looked at how HR will be affected by changes to pensions in this week’s Budget announcement by Chancellor of the Exchequer George Osborne.

Employment

Chris Jones, Chief Executive of City & Guilds, said:

“The budget had a common theme – job creation. From investment in large-scale infrastructure projects, to cuts in business rates for SMEs, to abolishing National Insurance for employing an apprentice – all will open up new employment opportunities, and that’s fantastic.

 “However, creating jobs is one thing, filling them is another. To fill these jobs, we need people with the right skills. The Government has already invested significantly into apprenticeships, and that’s great. But they are only part of the solution. We need to go further to bridge the gap between education and employment.

“To do this, we need to bring careers advice into the 21st century, and use market data on skills gaps to shape the advice young people receive. That way, they’ll know what jobs are in demand, and what options are available to them. We also need to see more employers investing in keeping the skills of their workforces current, and preparing them for the jobs of the future.

“Unless we do more to help young people develop the right workplace skills, vacancies will remain unfilled and skills gaps will deepen.”

Tara Sinclair, Chief Economist at jobsite Indeed & Associate Professor of Economics and International Affairs at the George Washington University, commented on how the rise in employment figures will affect wages:

“The continued economic recovery is breathing new life into the UK labour market. We are seeing a notable increase in the number of available job listings across the UK. The power is shifting away from the employer and into the hands of the employee for the first time in several years.

“Higher levels of employment and higher levels of vacancies should also flow through to wage growth in the coming months. Despite the strong growth in employment opportunities workers still need to regain the confidence to push for higher wages before we will see a significant shift in wage levels. We also need to be wary that any eventual wage rise is reflected in actual spending power, rather than simply rising in line with inflation.

“There is also fear that increased wages will simply result in businesses raising product prices – thus sending inflation up and limiting purchasing power gains for workers. This is why it’s crucial for the government and employers to focus on productivity – which is an issue the UK has been battling with since the recession.  For the UK to see more economic benefit from the energetic labour market, investments in infrastructure, training and flexible working must keep pace with the job opportunities.”

On the subject of tax breaks and the increase to the minimum wage, Sinclair added:

“Tax breaks for low-paid workers and boosting the minimum wage are a great way to incentivise job seekers into the workplace, but there is a risk of encouraging workers into jobs with a flat career trajectory – further exaggerating the UK’s productivity problem.

“With job vacancies rising, the real focus for the economy needs to be on encouraging employers to consider candidates from alternative backgrounds and invest in their training and growth to develop the right skills. The 20 percent rise in apprenticeship wages could be a step in the right direction for encouraging people not just to get into work, but to build an ongoing career.”

This idea also extends to young people. Michael Mercieca, CEO of Young Enterprise reveals disappointment in the lack of educational support offered by the chancellor given the statistics for youth unemployment:

“Whilst recent announcements such as the 20 percent apprentice wage rise are positive, we had hoped to see more commitment to support education in this year’s Budget.

“We can see from this morning’s labour statistics that youth unemployment is still at triple the headline rate. Delivering financial and enterprise education to primary school children and making it a statutory part of the curriculum will increase financial literacy and financial inclusion. It is imperative that we invest in our young people in order to improve young people’s life chances and strengthen their communities and the UK’s economy.”

IPSE, the Association of Independent Professionals and the Self Employed has urged the Government to carefully consider how it implements new expenses rules announced in the Budget.

The proposals, designed to target ‘employment intermediaries’ will, according to HMRC, stop individuals who ‘broadly look like an employee’ from claiming travel and subsistence relief.

IPSE’s Director of Policy and External Affairs Simon McVicker, said:

“This Budget has generally been very favourable for the self-employed. Indeed George Osborne was careful to say that these new measures ‘would not impact the genuinely self-employed’.  However, we remain concerned that if this is not done correctly then independent professionals will be seriously affected. 

“In particular, the new rules are likely to require those working through their own company to prove they are not under the ‘supervision, direction and control’ of their end client. We hope that there will not be an onerous or unfairly high burden of proof to do this and we have reservations about how this can be done in a way which is fair, proportionate and easy to comply with. In the past, new legislation such as the ‘onshore’ rules have caused a great deal of disruption and confusion to the marketplace for contractors.”

Energy

David Spencer-Percival, CEO of energy recruitment firm Spencer Ogden, said:

“This is the kick start that the North Sea oil industry needed. George Osborne’s £1.3billion support is the first, vital step in reversing mounting job losses.

“The situation was becoming dire. We had gone from a skills shortage to an influx of jobless top talent. This is now being addressed. With 40% of the North Sea’s production expected to come from new, currently untapped sources by 2018, a tax cut incentivizes the essential exploration needed to secure a long term future for North Sea workers.

“The fact is, without exploration now, North Sea oil jobs will dry up long before the oil sources do.” 

The majority of responses to the Budget statement have been cautiously positive, but TUC General Secretary Frances O’Grady is not convinced. He said:

“The Chancellor’s Britain, where happy people skip to their secure jobs to celebrate their rising living standards, is not one that many will recognise.

“But it’s what he did not say that is most significant.

“He did not spell out where, if re-elected, he will make the huge spending cuts he plans for the next parliament, nor did he tell Britain’s low paid workers which of their benefits he will cut.

“Nor did he address the big problems faced by those not living in the Chancellor’s Promised Land – the chronic shortage of housing, an NHS in crisis and the huge growth of zero-hours and other insecure jobs.

“For all the warm words, austerity is set to continue year after year.”