REC Budget Submission - September 2022

Ahead of this year’s autumn Budget and the fiscal event we’re expecting next week, the REC has written to the Chancellor, Rt Hon Kwasi Kwarteng MP, sharing our latest labour market analysis and asking government for six key policy changes. On behalf of our members, we have asked government to:

1. Protect business from extreme energy costs, reverse the National Insurance rise and reform the business rates systems.

We know that the cost of living can’t be solved without addressing the cost of doing business. Although we are pleased that the Prime Minister has announced plans to support households via the Energy Price Guarantee, we’re still waiting for details on exactly what the equivalent support for business looks like. We’ve called for government to introduce an equivalent guarantee for all businesses for at least 12 months, followed by a review. In addition, we’ve asked government to reverse the National Insurance hike, freeze business rates for SMEs and conduct revaluations annually.

 2. Introduce flexibility to the high-quality training funded by the Apprenticeship levy.

The levy, in its current form doesn’t work for a large proportion of our members. We’ve called on government to redesign it to make it flexible so that more people can access high-quality, early-career apprenticeships, good retraining opportunities and modular options.

3. Review the application of IR35 rules and provide clarity on employment status for tax.

Understanding and complying with the off payroll working rules (IR35) is challenging. Many businesses, including our members and their clients find off-payroll working legislation the most difficult tax legislation to deal with. Although the legislation has been reviewed and amended several times, it is still overly complex and does not place sufficient impetus on the end-client to provide their assessment and take responsibility for it.

4. Help parents stay in the workplace by focusing on childcare support and care providers.

Parents now pay an average of over £7,000 per year for a part-time nursery place. So, it’s hardly surprising that parents are dropping out of the labour market or reducing hours to offset this. That’s why we’ve called on government to increase the financial contribution it makes to the tax-free childcare scheme, as well as increasing funding for nurseries and childcare providers so that no-one in the UK is left without provision.

5. Work with REC members to reinvigorate welfare to work schemes.

The REC was pleased to be a Kickstart Gateway organisation and we are also a supplier to one of the lead providers for Restart. We'd like to see new and improved schemes introduced. Kickstart and Restart had the right intentions but were often let down by administrative challenges. Government should build on these schemes but learn from the mistakes of the past.

6. Create a Single Enforcement Body (SEB) and introduce overdue umbrella company regulation.

We asked government to re-commit to introducing an Employment Bill which would strengthen workers’ rights and protections, create a SEB and introduce umbrella company regulation – benefitting workers and taxpayers alike.

You can read our full budget submission here.