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Spring Budget comments

Jeff Fox

It is clear that the Chancellor wishes to keep his powder dry for what promises to be an eventful 2017. Jeff Fox, principal, Aon Employee Benefits.

In the main, employers have got the Budget they’ll have wanted – they have a period of stability, not least with a single fiscal event from next year. This means we should no longer see the tax cliff-edge of current Spring Budgets leading to immediate tax changes in the new tax year, sometimes only a few weeks apart.

However: Optional remuneration arrangements will become effective on the 6 April 2017 and while we await the outcome on some key questions ahead of 20 March when the detailed regulations should be published, no further updates were offered in the budget.

Many employers are comforted by the salary sacrifice grandfathering arrangements in place until April 2018 (for most benefits) but this could be misplaced. It is fragile and easily disturbed.  Employers need to watch out for post April 2017 as life event, new joiner and other business process changes may knock away the grandfathering provisions, causing optional remuneration arrangements to apply immediately.”

Pensions/retirement savings
Debbie Falvey, DC Proposition Leader, Aon Employee Benefits: “Although the Spring Budget hasn’t created a migraine for HR and employers, there are still plenty of ongoing headaches about how to manage restrictions to pension savings such as the reduced MPPA.

“The Lifetime ISA will be an interesting addition to the ISA family, but there are ongoing doubts about how it’s going to interact with pension savings and continuing concerns about the impact on auto-enrolment opt-out rates. There is still a lack of detail about LISA and the providers ready to offer them.  Employers will need to make decisions about how to implement them as part of their benefits strategy.”

No plan for Chancellor to relieve increasing strain on workers
Government fails to rebuild public services and more workers set to be dragged onto the bread line, union says. Chancellor Philip Hammond’s Budget Statement failed to relieve the strain on workers from a further squeeze on living standards as wage growth is on course fall, GMB trade union warned today.

Responding to the Chancellor’s Budget statement, the union said he neglected to support workers facing a decade of pay and had failed to provide proper funding for public services or social care. Tim Roache, GMB General Secretary said: “The squeeze on living standards continues to put an unbearable strain on workers around the country. With wage growth predicted to fall, even more people face being dragged onto the bread line.

“The trouble with the government’s knock-off version of the living wage is that it’s set at a level that people can’t live on.” “This should have been a Budget to provide a plan for fair pay and support for all workers, including for those in the public sector who’ve had an average of £9,000 pinched from their pay packets since 2010 and face losing £4,000 more in the three years ahead. Instead, the Tories showed how out of touch they are by failing to help these dedicated public servants – all the while giving tax breaks to big business.”

“Public services we all rely on are in crisis due to the cuts and underfunding over the last seven years. Nearly two thirds of adults think the cuts have gone too far, yet there is no plan coming from the Chancellor to rebuild the public services or to support those who are working in them. Instead they are ignoring what people want – and are prioritising £8.5 billion tax cuts for corporations.”

“Despite finally realising that their cuts to social care have plunged the sector into crisis, the government isn’t even offering half measures. The Kings Fund say £1.9 billion is needed next year yet the Government  are making a total £2 billion available to cover three years – after over £4 billion of cuts this gives us the grand total of minus £2.5 billion since 2010. They want to be seen to care – without funding it.”

Benefits & rewards
James Malia, Director of Employee Benefits, Sodexo Benefits and Rewards Services, comments on The Chancellors Budget announcement for a £5million fund to support mothers back into work.

“The government’s announcement is a long overdue acknowledgement of the value that Mums can bring back to the workplace. This is the first step in encouraging more parents to return to work but more must be done by individual employers to truly attract and retain the best talent.

Although some employers offer perks such as flexible working in a bid to appeal to parents and help with their work-life balance, this is simply not enough. By implementing a full range of employee benefits to include childcare support, car schemes, access to discounts for family friendly experiences and other lifestyle based benefits, employers can truly champion what it means to be a ‘family friendly’ place of work.”

Tax-free annual dividend allowance
Lynda Finan, legal director in DLA Piper’s Tax group, comments as follows on the Chancellor’s Budget speech:

“The move to reduce the current tax-free annual dividend allowance of £5,000 to £2,000 with effect from 6 April 2018 looks more like a general cost-saving exercise than targeted anti-avoidance.  The Chancellor announced this change is aimed at addressing the “discrepancy” and “unfairness” that exists between employees and individuals who operate through their personal companies, but in fact the reduction of the dividend allowance will apply to all shareholders in any company.

“The Chancellor also announced an increase in the rate of self-employed (class 4) national insurance contributions from 9% to 10% in April 2018 with a further 1% increase in April 2019.  This is intended to address a perceived unfairness between the level of contributions paid by employee as against the self-employed, as well as better reflecting the difference in state benefits between the two.

“It is perhaps the first step in the Government’s approach to adapting to the so-called “gig economy” (with more measures to follow no doubt, including the announced consultation on options for addressing the disparities in parental benefits as between the employed and self-employed).”

Business Rates changes are the final nail in the coffin for the High Street
Parcelhero, welcomes Philip Hammond’s first budget’s help in reducing urban congestion; but warns that it has not done enough to remove the threat to High Street retailers already battling the rise of e-commerce.

Says David Jinks MILT, Head of Consumer Research at ParcelHero: ‘Our latest industry report:  2030: Death of the High Street’, warns that the impact of e-commerce could mean our High Streets reach a dead end  by 2030, with nothing but nail bars and charity shops in some town centres. The planned changes to Business Rates threaten many High Street retailers with significant rate rises just as they are battling to take on online retailers. The cap of £50 per month for this year for businesses coming out of Small Business Rate Relief is welcome; but what happens to those businesses in two year’s time?’

Continues David: ‘Some city centres are saying their Business Rates are rising by around 50% while e-tailers such as Amazon may even see their rates fall on out of town distribution centres. More needs to be done to save the High Street and look at the disparity of taxes and rates between online and brick and mortar retailers.’

Spring budget: working towards wellbeing in the workplace
As someone who has experienced mental ill health, I know how important it is to receive the right support, at the right time. Poppy Jaman is CEO of Mental Health First Aid England, non-executive director of Public Health England and Programme Director of the City Mental Health Alliance

I also know that being able to work has been an imperative part of my recovery and an ongoing positive factor in staying mentally well. I passionately believe that as a society we should be creating mentally healthy workplaces, and giving people with mental health issues the opportunity to feel able to work.

Last week, an open letter from a number of doctors associated with some of Britain’s leading mental health organisations made a case for increased mental health awareness training for job centre staff. This was set in the context of calls for reform of welfare and employment services in light of a mooted reduction to the disability benefits budget. The spring budget has now been announced and many commentators remain concerned that £2 billion for social care over three years will not go far enough to close the social care funding gap. Training job centre staff to be knowledgeable and confident to support and appropriately signpost jobseekers who are experiencing mental health issues does then seem a pertinent recommendation, especially given that people who are unemployed for more than 12 weeks show between four and ten times the prevalence of depression and anxiety, and consult their doctor more often than those in employment.

It remains however, that mental health awareness training benefits all kinds of workplaces, not just job centres. Mental ill health is the third biggest cause of absence in the workplace and is the cause of an estimated 15 million days of leave, costing employers around £26 billion per year. The human cost can’t necessarily be quantified in the same way but anecdotally we know that mental ill health can cause untold levels of distress and suffering. It is therefore vital that we upskill people in the workplace to look after their own and others mental health.

At a policy level, this group’s letter also called for the development of statutory support for creating psychologically healthy workplaces, an idea that I wholeheartedly support. Encouragingly, many businesses are already taking it upon themselves to improve their approaches to mental health, as was evident at last week’s ‘Mental Health in the Workplace’ event run by the Institute of Directors. Given that the we spend so much our lives in the workplace, ensuring that we foster work cultures that are supportive of good mental health should be a priority for employers and policymakers alike.

My 18 years of experience working in the field of mental health has taught me that unless we improve our baseline understanding of what mental health is, what constitutes poor mental health and what we can do to support a person’s wellbeing, we will continue to live in a society where the mentally unwell are disadvantaged. In the three roles I currently hold; CEO of Mental Health First Aid England, non-executive director of Public Health England and Programme Director of the City Mental Health Alliance, I am focused on addressing this inequality and improving the outlook for those who have mental health issues, whether they are employed or seeking employment.

My involvement with Mental Health First Aid (MHFA) began during my time working at the Department of Health when myself and other colleagues were tasked with looking into how we could develop a nationwide mental health training programme in England. We discovered that an MHFA training course, originating in Australia, was being successfully implemented in Scotland and in 2007 we decided to test it in England. Initially we rolled this out through the National Institute for Mental Health and in 2009 we launched MHFA England, a Community Interest Company whose mission was to increase mental health literacy in the general population. To date we have taught MHFA skills to over 165,000 people in England and globally the number of Mental Health First Aiders is touching the two million mark. But there is a long way to go if we are to reach true parity of esteem with physical health and make headway with creating mentally healthy workplaces and supporting people with mental health issues to get back to work.

An important part of being skilled in MHFA is learning how to look after your own wellbeing. Unlike physical first aid, MHFA is not just about crisis response, but also teaches the skills necessary to support your own mental health. These kinds of skills are invaluable to the millions of people working in high pressure environments day after day and can help early prevention and identification of mental health issues. It’s estimated that this alone could enable employers to save 30% or more of the organisational costs of mental ill health – at least £8 billion a year. It’s therefore important for businesses to understand that introducing MHFA among their workforce can only serve to have a positive influence on their bottom line. So far MHFA training has made a real difference among range of different workforces, including school teachers, housing associations, construction workers, NHS staff and retail employees. Following implementation with Public Health Dorset for example, 83% of staff trained said MHFA had helped them in the workplace and 73% said the training had helped them in their personal lives. Training job centre staff in Mental Health First Aid makes complete sense and would be one step closer to supporting those seeking work with any mental health issues they may have.

As an organisation we are committed to empowering individuals and upskilling England’s workforce to confidently deal with mental health issues. Through campaigns in Westminster, and our nationwide networks of instructors we are advocating for psychologically supportive workplaces throughout the country as we continue to work to establish parity of esteem between mental and physical health. By educating one in ten people in MHFA and providing high quality information and training, we hope to help end the stigma surrounding mental ill health.

Whilst MHFA was developed just 17 years ago, our older brother physical first aid has been around for nearly 140 years. It was in 1878 that Surgeon-Major Peter Shepherd and Colonel Francis Duncan established the concept of teaching first aid skills to civilians and initiated an enterprise of doing so through the then newly formed St. John Ambulance association. At the time, these skills were first introduced in high-risk environments such as ports, railways and mining districts. In a similar vein, if we are to take parity of esteem between physical and mental health seriously, it should be treated as an imperative to introduce MHFA in high pressure working environments and in circumstances where individuals are vulnerable to mental ill health, such as job centres. Granted we’ve got some catching up to do with our older brother, but we’re an addition to the family that is sorely needed.

The budget on construction
“It has been a quiet Budget from the housebuilding industry perspective, however, it’s encouraging to see the Chancellor acknowledge the need for greater investment in skills training; especially fitting during National Apprenticeship Week. Stephen Stone, CEO, Crest Nicholson

“The inclusion of construction as one of the fifteen occupation areas identified under the new T-Level is a welcome development and it’s heartening to see acknowledgement of the need for greater investment in skills training in the construction sector. The new T-Level will give 16-19 year olds routes into the construction industry, more time in the classroom, and good quality work placements – welcome news ahead of the Apprenticeship Levy in April.

“Together with the Government’s support of graduates and apprentices, this will ensure a steady supply of talent and help safeguard the future of our industry. Ultimately this means we are in a stronger position to meet the growing housing needs of the country.”

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