Eloise’s November 2021 News – Budget, Jobs Market, COP26, Winter Wellbeing
Hello and welcome to November
For me, the end of October marks the start of winter. As the clocks change and the nights draw in, there is a real shift. The weather has also stuck to the plan with everything feeling crisper and I’ve dusted off my big coat, hats and scarfs. Although, anyone who knows me well, knows I’ve been layering for ages as I always feel the cold.
As we step into November there’s always a flurry of activity as we prepare for December and the end of the year. It feels like THE month to get all those ducks in a row – planning for 2022 and ticking off things that have been festering on the to-do-list for too long.
The Autumn Budget will also help with the planning process for next year as we know more about where we stand. Which leads us in nicely…
The Chancellor Rishi Sunak’s Autumn Budget was announced on the 27th of October. His main focus was to ‘build a stronger economy for the British people’.
This was always going to be a pivotal budget to help businesses rebuild and recover after the impact of the last 18 months. Those sectors that have been worst hit were hoping for some good news. The outcome was very much swings and roundabouts.
In good news for businesses…
- Economic growth is expected to rise to 6.5% and fears of significant unemployment this quarter due to the pandemic do not seem to be being realised.
- Income tax has not been changed – keeping both the basic and higher rates the same. And the VAT qualifying threshold is remaining at £85k and deregistration at £83k.
- There will be a welcomed 50% cut to business rates for retail, hospitality, and leisure businesses in England. For the financial year 2022-23 businesses will be able to claim a 50 per cent reduction, up to a maximum of £110,000. Then from 2023, there will be a relief scheme introduced for businesses making ‘qualifying improvements’ to their property.
- The anticipated fuel duty rise has been cancelled for the 12th year in a row. This is great for businesses with higher fuel expenses. Although fuel prices are unbelievably high at the moment, so this still feels painful.
- There’s going to be a six-month extension to the Recovery Loan Scheme until 30 June 2022 from 31 December 2021.
- There is also going to be a £150 million investment in the government owned, British Business Bank, for the launch of the Regional Angels Programme. The scheme aims to “help reduce regional imbalances in access to early-stage equity finance for smaller businesses across the UK”.
- In a push to back UK based business activity, research and development reliefs will now be targeted to UK based activity only. And will also now include data costs and cloud computing.
In expected news and not so good news…
- Corporation tax will be increasing as planned from April 2023 to 25%. But will remain at 19% for companies posting profits below £50k.
- A hike in National Insurance was announced a few weeks ago and it was confirmed that it will be rising to 1.25% in April 2022. The increase is going to pay for health and social care across the country.
- VAT is going to rise, as planned, back to 20% in April 2022. This is a blow to hospitality in particular.
Overall, there wasn’t too much we weren’t expecting or hadn’t already been leaked. And with the business rate cut for some sectors, recovery loan extensions and fuel duty freezes, there was a lot of good news.
National Minimum Wage Increase
This is the main part of the Autumn budget that is both good and bad news… the rise of the national living wage and minimum wage.
National living wage for workers over 23 years old will rise from £8.91 to £9.50 an hour. People aged 21-22 will see an increase from £8.36 to £9.18, and apprentices (aged 16 and over and not in full-time education) will get £4.81 an hour, up from £4.30.
For the recipients of the rises, this obviously seems like great news. But the bigger picture and question is, are small businesses able to take the hit? And does it actually impact job security?
It’s such a tricky topic. Increased wages mean more money going back into the economy but if general prices are also going up, does it really mean anything at all to recipients? And small businesses who might already be struggling to justify staff numbers and hours might now be forced to make cuts or hike their prices.
For a business employing 15 full-time team members all on national living wage, the rise equates to £17,027.40 in increased wages per year – £1135.16 per person. This is almost the same as an additional employee.
The increase is going to trigger some tough conversations.
On the other hand, some medium sized businesses are telling me they feel unaffected by the rise and would have been increasing wages to a similar level anyway.
How is your business impacted if at all?
The overall news is the same as it has been in recent months. There are lots of available jobs and few available candidates.
Commentators are predicting ‘The Great Resignation’. With the market swamped with opportunities and salary offers going up and up, there is more temptation for workers who would have previously been loyal to their employers.
The main messages at the moment are to be prepared, to try to give people what they want and to focus on retention.
We all need to try and pre-empt when we might need to back fill a position and when we might need to up numbers for busy periods. Planning recruitment needs to start much earlier than before. Not just because it’s hard to find someone to employ but because there are lots of counter offers and candidate no-shows happening.
In such a competitive employment market it is very important you know the market value of your team. You won’t get away with not keeping up and underpaying for long. And it’s all about staff retention. The costs of recruitment and training far outweigh keeping your current team happy and staying right where they are.
COP26 is the 2021 edition of the United Nations annual Climate Change Conference that is taking place in Glasgow right now. Called COP26 because it’s the Conference of Parties and it’s their 26th meeting.
The hope is we will emerge from the conference with an action plan to achieve the four main COP26 goals:
- Secure global net zero by mid-century and keep 1.5 degrees within reach
- Adapt to protect communities and natural habitats
- Mobilise finance
- Work together to deliver
Action is what we need and there are tangible ways you and your business can make a difference. I was introduced to Zellar just this week. They held a Leicestershire launch of their initiative at the National Space Centre. They are helping to guide small businesses with their sustainability platform to help organisations on a journey to net zero. They are worth looking at to see if you could be doing more and how.
For more information about COP26 visit: https://ukcop26.org/wp-content/uploads/2021/07/COP26-Explained.pdf
As we enter winter and the dark mornings and evenings, everyone’s energy and wellbeing often take a dip. I really encourage my team to take a good multi vitamin during the winter, at the very least a vitamin D supplement.
Also, as a team we have been looking at mental health and blogging about how employers can support employees and what their role is. We have some great articles for you to read to help you get some support and insight:
And that’s it for November
I’m looking forward to seeing how COP26 progresses, and I’d really like to hear from you if you’re implementing green initiatives at work that are going well and making a difference. It’s so important to share these successes – drop me a line.
Thanks, and have a great November
PS If you’ve not already done so check out the ‘The State Of Recruitment Report 2021’ to see what impact has COVID-19 had on the recruitment market in the East Midlands?
We recruit throughout the East Midlands covering Leicestershire, Northamptonshire, Rutland and the surrounding areas, especially Market Harborough, Lutterworth, Leicester, Corby and Kettering. We help people find their perfect job and match suitable jobseekers with businesses looking to hire the best candidates across our five specialisms – Sales, Marketing, Accountancy & Finance, HR and Office
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