News

The Chancellor’s ‘emergency’ Budget includes a number of factors that impact on business and the public sector. We outline the key measures below.

• National Insurance – the threshold at which Employers start to pay national insurance will rise by the rate of inflation plus £21 per week from April 2011

• Basic state pension to be linked to earnings from April 2011. Pension guaranteed to rise in line with earnings, prices or 2.5%, whichever is the greater.
  
• The government will accelerate the increase in state pension age to 66 - a "call for evidence" will be made later this week.
  
• The government will also consult on phasing out the default retirement age - to ensure those who want to work past 65 are able to do so.
  
• Former Labour Work and Pensions Secretary John Hutton has been asked to review public sector pensions. His report is expected before the autumn spending review.
  
• From 2011 the majority of employee benefits will rise in line with the Consumer Price Index rather than the Retail Prices Index. This is reported to save more than £6 billion a year
  
• Public Sector bosses are not to be paid any more than x20 those lowest paid workers within the organisation
  
• Any public sector worker earning more than £21k will face a two-year pay freeze. Those who earn less than £21k will receive a flat annual pay rise of £250
  
• Personal allowance before tax rises to £7,475 in April 2011
  
• Finally positive news for entrepreneurs in our region – New start up businesses will be exempt from £5,000 of NI contributions for the first 10 workers this should be in place by September
  

Robert Gibson - Head of Employment Law