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Budget "could have been bigger, bolder and braver" for jobs

23 March 2012

Budget "could have been bigger, bolder and braver" for jobs Posted by Editorial team

Chancellor George Osborne's Budget has provided some help to the UK's labour market but did not go far enough.

This is the view of Kevin Green, chief executive for the Recruitment and Employment Confederation, who argued the government's policies could have been "bigger, bolder and braver".

One of the issues the expert would have liked Osborne to tackle in the Budget is the new auto-enrolment legislation, which will see companies sign up thousands of personnel to pension schemes this October.

He argued the new rules need to be simplified, although another body highlighted that one change the chancellor made to retirement savings could be beneficial for workers.

Insurer Legal & General welcomed the introduction of a single tier state pension, which it argued will encourage Britons to put money away.

With a third of respondents to a recent National Association of Pension Funds survey saying they planned to opt-out of auto-enrolment, this could be the push the UK needs to save adequately for their old age, the body stated.

"The timing of this is perfect," Legal & General's pensions strategy director Adrian Boulding said. "Coinciding with the launch of auto-enrolment, this autumn the chancellor will be sending a message to people that every penny they save in a pension will benefit them."

Mr Green said other "missed opportunities" in the chancellor's Budget included "specific measures to cut EU red tape [and] regulations surrounding agency workers".

He added that changes to auto-enrolment as well as these issues are "necessary moves to help business and encourage job creation".

With 2.67 million people unemployed in the three months to January, according to Office for National Statistics figures, the government may be particularly eager to see more Britons finding work.

Mr Green felt some of the steps Osborne made could help to boost recruitment, such as lowering corporation tax, which he said would "encourage businesses to invest in their workforce", while a pledge to continue reducing the duty gives firms "certainty".

Director-general of the Institute of Directors Simon Walker described this measure as "bold", but argued that "in the bigger picture this is still not far enough or fast enough", with businesses still not free from "burdens and barriers" that stop them from growing.

There was also criticism from the Trades Union Congress, which claimed the coalition's approach will make matters worse rather than better for working people.

General secretary of the body Brendan Barber called the chancellor's policies "a Budget for the rich by the rich", picking up specifically on the abolition of the 50p tax rate.

Mr Green had argued the change in this law "sends a positive message to ... job creators", but Mr Barber highlighted Treasury figures showing Osborne's policies on tax will hit those on lower and middle wages harder than wealthy individuals.

"One minute the chancellor said he found tax avoidance morally repugnant, the next he rewarded it by cutting income tax for the richest one per cent - with precious little relief for hard-pressed families on ordinary incomes," he said.

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