Singapore markets open in 1 hour 18 minutes
  • Straits Times Index

    3,041.29
    -79.29 (-2.54%)
     
  • S&P 500

    4,567.00
    -88.27 (-1.90%)
     
  • Dow

    34,483.72
    -652.22 (-1.86%)
     
  • Nasdaq

    15,537.69
    -245.14 (-1.55%)
     
  • BTC-USD

    57,019.60
    -948.47 (-1.64%)
     
  • CMC Crypto 200

    1,456.40
    +13.62 (+0.94%)
     
  • FTSE 100

    7,059.45
    -50.50 (-0.71%)
     
  • Gold

    1,774.20
    +0.60 (+0.03%)
     
  • Crude Oil

    67.14
    +0.96 (+1.45%)
     
  • 10-Yr Bond

    1.4430
    -0.0870 (-5.69%)
     
  • Nikkei

    27,821.76
    -462.16 (-1.63%)
     
  • Hang Seng

    23,475.26
    -376.98 (-1.58%)
     
  • FTSE Bursa Malaysia

    1,513.98
    +3.41 (+0.23%)
     
  • Jakarta Composite Index

    6,533.93
    -74.36 (-1.13%)
     
  • PSE Index

    7,200.88
    -77.56 (-1.07%)
     

Budget 2021: Businesses hail skills funding but warn on short-term labour issues

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·4-min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
Budget 2021: Businesses hail skills funding but warn on short-term labour issues
Britain's chancellor Rishi Sunak carries the budget box outside Downing Street in London, 27 October 2021. Photo: Peter Nicholls/Reuters

Proposed changes to business rates and support for skills and training were welcomed with open arms by UK business leaders, following chancellor Rishi Sunak's autumn spending review on Wednesday. 

But the provision for manufacturers and support for other areas of the labour market left much to be desired and some warned the chancellor should be prepared to do more should there be other shocks to the economy. 

“Additional investment in skills, infrastructure and better access to finance will be key drivers for our economic recovery and will provide longer-term benefits and opportunities for businesses across the country," said Shevaun Haviland, director general of the British Chambers of Commerce. 

“Businesses have been battered by 18 months of the pandemic and problems around supply chain costs and disruption, labour shortages, price rises, soaring energy bills and taxes, and there may still be difficult months ahead," she said.

Haviland added that that the chancellor must be prepared to step up with further action if there are any other unexpected bumps in the road. 

Watch: What are the key takeaways from Rishi's budget?

Those in hospitality cheered the proposed changes to business rates, which will see a 50% cut in rates for hospitality and a simplification of tax on alcohol.

“We support the government’s 'plan for growth' — but its success should be judged on whether it delivers the skilled people that we so desperately need," said Ian Wright, CEO of the Food and Drink Federation.

"Today’s budget does little to address the labour shortages which grip the nation. It was also worryingly short on action to tackle rising inflation. Given the pressures they are facing, many manufacturers will simply have no choice but continue to pass costs down the chain.”

Heads of the UK's Financial Services Skills Commission also welcomed the investment in skills. 

“Today’s announcement on T-levels and an increase in skills investment is a positive step forward for employers and students," said Claire Tunley, CEO. 

Read more: Sunak cuts draft beer duty in most radical reforms in 100 years

"This will help to address the financial services sector’s growing skills gap and boost the much needed supply of technology and digital skills that are essential to the future success of the sector."

Others pointed out the fact that there was little in the budget that had not already been announced, and therefore future reports with more detail on the spending would be crucial to get the full picture on skills and adult education. 

“Against the backdrop of a steep decline in adult education and further education funding over the past decade, the detail of the government’s upcoming Skills Bill and the response to the Augar Review are a pivotal moment in its commitment to revolutionising skills in the UK,” said Social Market Foundation senior researcher Amy Norman. 

Some questioned the impact rises in the national minimum wage would have on businesses, alongside national insurance contributions going up. 

"It might feel like a case of giving with one hand, and taking away with the other," said Michael Carty, editor at XpertHR, noting the projected increase in private sector pay versus inflation. 

Read more: Budget 2021: Sunak resets UK's spending focus for a post-COVID economy

“We must remember that business has been tough for many. The need to offer competitive pay awards, combined with likely tax increases, creates a challenge to balance the needs of the organisation with those of its employees. 

"While many organisations believe that some economic recovery will enable them to award higher pay increases at their annual pay review, others are likely to remain cautious.”

The inflationary environment also continues to be a concern for business leaders. 

“The chancellor’s optimistic outlook is encouraging, however this comes against a backdrop of growing COVID-related uncertainty," said London Chamber of Commerce & Industry CEO Richard Burge. 

"With the potential for economic activity to be restricted this winter, COVID-induced inflationary pressures and ongoing supply chain difficulties, businesses are feeling understandably cautious about the extent to which the chancellor’s ‘age of optimism’ will be realised.”

Read more: Budget 2021: Rishi Sunak announces 50% business rates discount for retail and hospitality sectors

Adding to this, Helen Dickinson OBE, CEO of the British Retail Consortium said: “Retailers will struggle to share [the chancellor's] confidence after a budget that does not do enough to reduce the burden of costs bearing down on our shops, our high streets and our communities.

“This budget is a missed opportunity for retail and the three million people who work in the industry, and it prevents retail from maximising its contribution to the government’s levelling up agenda.”

Watch: Key points from the Chancellor's Budget

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting