“Britain’s economic plan is working, but the job is not done.”
So, if things are on the up, how will this affect the construction industry? Can we expect the government to start stamping down even more? Or can we expect kind treatment to grease the grubby pole of recovery?
According to Chancellor George Osborne it is the latter, and will go something like this:
In the next two years we will see employers with apprentices being funded directly through HMRC. The Governments is making a £40 million investment in the new initiative, which should see an additional 20 000 apprentices being created over this time. However it is still unclear how this will work exactly, and there is a worry that this will affect SME’s the greatest with complicated and extended routes to payment, not to mention the additional paperwork. However there is a proposed route which does look promising, where a business could potentially calculate how much an apprentice would cost them and claim back linked to taxes, the feasibility of this is still unclear. But with promises of consulting SME’s on the best options things are looking promising.
There will be reforms to job taxes for young people, with employer National Insurance payments being scrapped for under 21’s. This will effect 1.5m jobs giving a projected saving of £500 to a business employing a young person on a salary of £12 000 salary, and £1000 for a £16 000 salary. This will incentivise companies to take on young staff, it will also help open up the job market to the young, hopefully increasing works capacity for businesses with a slightly reduced financial burden. However these changes won’t come into effect until April 2015 and won’t apply above the upper earnings limit.
Alongside this, they are also going to increase the Housing Revenue Account borrowing limit by £300 million, allowing councils a bigger scope in housing development. Not only this, but we will see the ability to sell off more expensive social housing in favour of new developments. So it would seem that there is scope for some movement, and building, of the housing market and that we are at last seeing changes. However there are worries that this may not be going far enough. Not only this but within the construction sector things may seem a little one sided by focusing on the housing market when areas such as schools have gone relatively unmentioned, unless of course you include things like free school meals.
Earlier we heard that employers with employees under 21 no longer have to contribute to National Insurance, this eases the employer’s burden. Something they will apparently have plenty of time to worry over as the pension age increase has been brought swiftly forward, with the state pension age being increased to 68 by the late 2030’s. The reasoning given by the Chancellor is that as life expectancy increases, so should your working life expectancy. Apparently sound logic in a state where we have an ever growing elder generation that are a continuing burden on society’s financials. However we must raise the issue that although the length of life may be extending, this does not necessarily mean our ability to work longer is also extending. We still feel the effects of our age at times in our lives that will soon far succeed the state pension age. This is particularly true in a sector like construction, where with such a high proportion of manual work, comes such a high proportion of bodily ailments defying our ability to work. Nor does it take into consideration that the average life expectancy in areas such as Glasgow is now 71 for men. For someone born after 1990 this may now mean only one year of claiming pension if we are to follow the government’s plans.
So as with every announcement from Whitehall there are ups and downs, with many down’s disguised as ups. But either way we can only speculate as to what is to come, and how it will really affect us.
