The Chancellor of the Exchequer yesterday raised the National Insurance income threshold to £12,570.
Rishi Sunak announced that the rise will save working people £330 a year. However, the plan to increase national insurance contributions (also known as the Health and Social Care levy) will still go ahead in April.
The changes mean that there will be an increase in the allowance people can earn before they have to start paying the levy. Mr Sunak said that the decision would lead to 30 million people paying less tax.
In other key measures, the chancellor committed to cutting the basic rate of income tax by 1 pence from 20p to 19p in the pound. The cut will be enacted before the end of this parliament. And in a further sign that the government is conscious of the needs of businesses and workers, Mr Sunak has also cut fuel duty by 5p a litre. The policy is set to last for 12 months and represents the biggest slash in fuel duty ever.
The Workers Union Says…
Now that the government have announced measures to try to alleviate the strain on working people, the next step should see UK plc do what it can to deliver its own frameworks of support.
There is little doubt that companies can and must offer a more enlightened version of people management than the current retro-creep that many workers are experiencing. Some firms, shorn of the moral obligation to provide lockdown-era flexibility, have granted limited forms of hybrid working as a ‘next best’ approach to working patterns. In reality, this is nothing more than a covert way of returning working people to the top down, master and servant relationship that characterised employee relations before the virus.
It will not profit workers, managers or employers – and managers that fail to heed this message will soon find themselves hunting around for crumbs left behind by more empathic enterprises. For the winners in the new world, where employers compete for talent in a fast moving, digital economy, will be companies that recognise comprehensive packages of benefits as an essential way of promoting worker wellbeing.
Sadly, although it shouldn’t take much of a perspective-twist, many companies still look for legislators to take a lead before committing themselves to progressive policies. And yet the history of thriving economies (and worker benefits pioneered by tech disruptors) shows us that the private sector has a huge role to play in leading on the training, development and financial/emotional wellbeing of its staff.
The trick is to view this as a circle of positive feedback made virtuous by investment on both sides. Company chiefs provide incentives for car sharing schemes, sites with adequate parking, fuel subsidies and a reduced requirement to attend the office. Mental health and financial planning become key parts of the benefits package, along with gym membership and help with childcare. In turn, workers feel valued and better equipped to do their jobs.
The truth is that the cost of living issue may be the elephant in all our rooms, but it is not just up to the state to provide solutions. COVID has changed the game completely, and companies in the digital age must respond or suffer the consequences.