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Employment rates

The Office for Budget Responsibility has forecast that:

• unemployment will peak this year and then fall
• employment will rise through this Parliament
• the UK economy will grow in each of the next five years

Plan for Growth

The government has launched a Plan for Growth setting out a range of measures to support private sector investment, enterprise and innovation. These include:

• dropping proposed regulations which would have cost business over £350 million a year
• a further 1 per cent cut in Corporation Tax from April 2011 to 26 per cent, falling to 23 per cent by 2014
• measures to make it easier for entrepreneurs to do business in the UK
• the creation of 11 Enterprise Zones to promote business growth in specific areas of the UK, with local areas to bid for a further 10

Read more about the Plan for Growth in ‘Budget 2011 – economy’.

• Budget 2011 - the economy

Apprenticeships and work experience

Measures aimed at helping young people into work announced in the Budget include:

• 80,000 additional work experience placements for young people over the next two years
  
• up to 50,000 more apprenticeship places for young unemployed people over the next four years, at a cost of £180 million
  
• improving technical and vocational education and expanding the number of University Technical Colleges, with new capital funding of £150 million

• Work experience and volunteering (young people section)

• Apprenticeships (education and learning section)

National Insurance and Income Tax

The government will consult on merging the operation of National Insurance and Income Tax.

The Chancellor also confirmed that:

• the proposed employer National Insurance rate rise will go ahead, but the threshold for employer National Insurance Contributions will increase by £21 per week above indexation, so the number of employees for whom employers pay no NICs rises by 650,000
• from 6 April 2011, the personal Income Tax allowance – the amount people can earn tax free – will go up by £1,000

Read more about the tax in ‘Budget 2011 – tax changes’.

• Budget 2011 - tax changes

Small businesses

A range of measures to help small businesses has been announced, including:

• an exemption, for start-up businesses and all businesses employing fewer than ten people, from new domestic regulation for the next three years
• an increase in the rate of Research and Development tax relief to 200 per cent in 2011 and 225 per cent in 2012 for small and medium-sized companies
• an extension of the rate holiday for small businesses until October 2012
• a confirmed agreement with banks of a 15 per cent increase in the availability of credit to small businesses

For an overview of how Budget 2011 affects businesses, visit Business Link.

• Business Link Opens new window

Public sector pay

The Chancellor confirmed that in the coming year all public sector workers earning £21,000 a year or less will receive a pay rise of at least £250.