The first wholly conservative Budget since Kenneth Clarke’s in November 1996 was introduced by Osborne as “a Budget for working people”.
The new ‘living wage’ will replace the minimum wage for those aged 25 and over. It will be set at £7.20 an hour from next April and is set to rise to £9 by 2020. The Living Wage Foundation currently recommends a rate of £7.85 outside London and £9.15 in the capital.
No mention was made of the apprenticeship minimum wage, which is set to rise to £3.30 an hour from October.
Mercury Search & Selection managing director Dani Novick said the move would be welcome for those currently on, or close to, the minimum wage, but would be unlikely to affect many print businesses.
“Our data, which of course is based on a sample rather than all workers, shows that in percentage terms the numbers of employees affected in the sector, i.e. those currently earning less than £14,040 per annum for full-time work, is in low single figures so the impact generally should be limited,” said Novick.
“Of course there may be some firms, particularly smaller or those using large numbers of unskilled or temporary workers, with a disproportionate number of lower paid workers where the effect could be skewed and have greater impact.”
A new apprenticeship levy has also been implemented to help large businesses to fund apprenticeship growth and help the government to reach its target of creating 3 million more apprenticeships by 2020.
The permanent level of Annual Investment Allowance for SMEs will be increased from £25,000 to £200,000 and National Insurance employment allowance for small firms has been increased by 50% to £3,000.
Osborne also announced an estimated £4.5bn cut to the £30bn-a-year tax credits system, which tops up the wages of low paid workers.
The personal allowance, the point at which people start paying income tax, will rise to £11,000 next year and there are plans to increase this to £12,500 by 2020.
Corporation tax rates will be cut to 19% in 2017 and 18% by 2020. Osborne also predicts a million jobs to be created by 2020 and said the deficit will be cut at the same pace as it was during the last Parliament.
Permanent non-dom status is to be abolished from April 2017, meaning that anyone who has lived in the UK for 15 of the past 20 years will pay the same level of tax as other UK citizens.
£7.2bn will be raised from a clampdown on tax avoidance and tax evasion while the HMRC budget will be increased by £750m to enable it to further its investigations into tax evasion.
BPIF chief executive officer Charles Jarrold said: “I’m pleased that the annual investment allowance for small businesses will be made permanent. I think that’s really encouraging because productivity is a combination of investment in equipment and investment in people in terms of training.
“Reiterating their commitment to 3 million apprenticeships is good. Bringing high-quality people in and giving them high-quality training, especially through apprenticeships, is something that’s very close to our members’ hearts and it’s good to see the commitment there.
“Cutting the corporation tax will support businesses in terms of feeling more confident that it’s more worthwhile to invest longer term in their business because that return will come back to them.”
CFH Docmail managing director Dave Broadway added: “A number of the business points are positive. The drop in corporation tax is good news, and I am in favour of the rise in minimum wage, although [Osborne] hasn’t actually reached the Living Wage Foundation level yet.
“Absolutely the worst part of it to me, though, was that not only was there no positive action on climate change, Osborne is now including the Climate Change Levy on renewable energy. We already pay a higher amount for renewable-only energy, and now will be required to pay the levy on top.”
