CIPD responds to Budget: ‘Where was the Chancellor’s commitment to productivity?’


Commenting on the Chancellor’s Budget, Mark Beatson, chief economist for the CIPD, the professional body for HR and people development, said: “The Government is right to cheer the rise in employment, but there are still some big questions that they have failed to answer on productivity. It’s astonishing that productivity wasn’t referenced even once in the Chancellor’s speech, and yet this is the biggest challenge that the economy and businesses face now. We need to understand how we can make more of our people, our assets and our infrastructure in order to boost business performance. We saw announcements in the Budget designed to encourage investment, but we saw little which will make a real difference to how UK employers develop workforce skills or use existing workforce skills effectively. There still isn’t a clear, coherent plan for productivity and, once again, skills are falling through the cracks. Unless we address the UK’s skills challenges, any short-term gains in the economy will be dashed by productivity shortfalls in the long-term.

“The increases to the national minimum wage and personal tax allowance threshold that we have seen this week are welcome, and we would like to see further increases in both during the next Parliament. However, if we are to ensure that incentives to work are optimised, the Government really needs to think about these alongside what it does about National Insurance contributions for employers and employees, as these have an impact on the hours that employees are offered, and on whether they qualify for pension contributions.

“There’s been positive news this week for young people, with the increase in the National Minimum Wage above the recommendations of the Low Pay Commission for apprenticeships. Better quality apprenticeships are what we need to get young people working, learning and earning, and there are signs we’re moving in the right direction on this.”

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