You couldn’t escape it on the news or social media on Wednesday, it was the 2015 Spending Review. This was George Osbourne’s opportunity to tell Parliament and the UK how he plans to spend the UK’s money over the next five years. Some of the information was leaked beforehand, as per normal budgetary behaviour, but there was a few surprises thrown into the mix. I covered the main points live on DGB, click here to catch up on the “best” bits.
As the dust settled and the analysis started to pour in, some of the loudest criticisms came from the world of big business, specifically focusing on the levy to be charged to pay for 3m new apprentice places.
This wasn’t completely new news, as the measure was announced at the last budget. However, a bit more meat was put on the bone this time round. These are the key points:
- 0.5% levy to be charged on big businesses – only businesses with wage bills of over £3m would be eligible
- the levy will raise £3bn to pay for 3 million new apprenticeship places
- 98% of employers would not be charged the levy
- £15,000 will be made available to those businesses available for the levy
On the face of it, all sounds well. Most employers escape it, which would be the vast majority of UK window and door companies, with only 2% – basically the biggest companies, footing the reasonably sized bill.
Would there be many companies from the UK window and door sector that would be eligible for this? I’m thinking along the lines of companies that are the size of REHAU, The VEKA UK Group, Deceuninck etc. There might be a few.
However, business groups, such as the CBI and the Institue of Directors have called it a “payroll tax”. They said it was a tax that would hit smaller sized companies. This was perhaps an indication that this extra cost would be passed down to the customers of the companies affected. a reasonable possibility.
Skills and youth crisis
As is well documented, the construction industry in general is suffering badly from a shortage of skills. It’s something I have covered here before on DGB, and there remains a chronic lack of youth and skills in the UK window and door sector.
As the current demographic within our industry gets older, there are less and less young people coming through that will be there to take the places of those leaving the industry.
Right now, our sector is already stretched. From what I can see, our industry is doing post-recession levels of business, on recession-level numbers of staff. It’s exhausting, a drain on resources and in the end quality in all areas will suffer.
For me, the creation of these new apprenticeships is a great thing. I don’t often agree with this Government, but the quicker they can get these places created and implemented the better. Big business will say that it’s unfair of them to be targeted. But, the majority of SME’s are not in a position to pay it. The biggest 2% are best placed to help fund this. And in the end, in the long run, they will benefit from it too as many will bring apprentices into their own business which in the long term brings a whole raft of benefits, including financial.
If there are any window and door companies that will be affected by this, I would love to hear your feedback. Please leave your comments on this issue via the comments section below.