UK BUDGET REVIEW
The Budget, revealed on October 30, has received a mixed response. There is no doubt that business will carry the biggest burden of taxation. But what does it mean for ECA members, and are there any silver linings? The Chancellor’s commitment to invest in industry, housing and electric transport is welcome; all areas which will generate opportunities for ECA members. Public capital investment should help unlock private investment in our infrastructure and low carbon technology. But is it all jam tomorrow? Education is a winner Underpinning business growth for our sector is a pool of enough skilled workers. Members have told us how the lack of competent workers and shortfalls in apprentice training are an impediment to their business ambitions. We have been pressing the new Government since they came into office to listen and act on member concerns. There is no doubt that education, and further education (FE) in particular, was a winner in this budget. We welcome the £40m investment to transform the Apprenticeship Levy into the Growth & Skills Levy in so far as this moves the emphasis away from masters’ degrees towards trade apprenticeships. The Chancellor also delivered a ECA HEAD OF EXTERNAL AFFAIRS JANE DAWSON AND HEAD OF EMPLOYEE RELATIONS CATHERINE WATT EXAMINE IMPLICATIONS FOR THE ELECTRICAL SECTOR… What does the UK Budget mean for ECA members?
UK Chancellor Rachel Reeves unveiled the Autumn Budget on October 30.
“There is no doubt that education, and further education in particular, was a winner in this budget.”
£300m boost for FE to support skills development. However, this budget lacks crucial detail on how it will support skills access for smaller firms, which make up 99% of the electrical contracting sector. These businesses will now also carry the higher burden of Employer National Insurance and higher apprentice costs. A bitter pill to swallow Member firms will have to find an additional 6.7% to cover the National Living Wage for over-21s. This is more than treble the current inflation rate, taking it to £12.21 per hour. The National Minimum wage for 18-20-year-olds had the biggest increase on record of 16%, hitting £10 per hour. The 18% increase to the apprentice rate follows a 21% boost in 2024. This means JIB apprentice rates, which are currently being reviewed, will need to increase substantially in order to keep pace. The Chancellor committed to raising an extra £40bn in taxes, with the majority (£25bn) being raised through an
increase in employer National Insurance contributions. This will be achieved through an increase in the rate from 13.8% to 15%. And by a reduction in the earnings threshold at which employers start paying, from £9,100 a year to £5,000 a year starting in April 2025. There is some countervailing support for small businesses, through an increase to the Employment Allowance from £5,000 to £10,500. Workers’ rights Implementation of Labour’s plans to upgrade workers’ rights through various measures, including enhancing sick pay and day-one employment protection rights like unfair dismissal, comes at an estimated cost to businesses of £5bn a year. This all adds up to an increasing cost of employment to employers throughout the UK, which SMEs in particular may struggle to sustain. ECA Northern Ireland Regional Office T: +44 (0)28 9147 9527 E: alfie.watterson@eca.co.uk www.eca.co.uk
22 | IRELAND’S ELECTRICAL MAGAZINE
FOLLOW US ON:
www.elecmagazine.com
Made with FlippingBook - professional solution for displaying marketing and sales documents online