What did the Budget do for the labour market?

Jeremy Hunt outlined an important argument at the Budget this week, that a “simpler, fairer tax system that makes work pay…will mean the equivalent of more than 200,000 people in work, filling one in five vacancies and adding 0.4% to our GDP.”

The CBI explained the significance: “the reduction in high marginal tax rates for working parents, alongside cutting National Insurance Contributions, offers a broad set of measures that will incentivise work at a time when access to labour represents a major obstacle to business growth.”

And as the Federation of Small Businesses also highlights for its members, “additional funding will be made available for childcare providers delivering parents’ free childcare entitlement in England, in a move the Government estimates will lead to 60,000 more parents entering the labour market over the next four years.”

I welcomed the Budget overall and this argument, because I know that people across the country will feel the difference – a thousand pounds more in the pocket of the average earner, and in many cases resolving the choice of giving up work or not.

It’s clear that this is an argument for business too – as the IoD confirms once again, “skills and labour shortages are a major problem for many UK enterprises”.

I’ve written more about that here , building on what’s already been done by the government including in my tenure.

I believe there is still more to do, such as to help people to avoid the tragedy of falling out of work, sick. I’d like to see the Treasury focus on occupational health, following the substantial plans laid out here , here and here .

I hope that the aim of improving productivity in public services will make a genuine difference to people, especially those waiting for NHS treatment.

I also hope that the AI Upskilling Fund Pilot, the SME Digital Adoption Taskforce and the data pilots to support AI and data access will help people and businesses get the best out of this critical technology.

Overall, we have made good progress in the economy. Inflation has fallen from 11.1% to 4%, the economy has performed better than forecast and outperformed European neighbours, wages are rising, mortgage rates are starting to come down, and debt is on track to fall.

Now we have to keep going to grow the economy further, and make sure that everyone’s talents are included.