Following my articles on Income Tax, National Insurance and pensions this article (leading up to the Queen’s Speech on 19 December 2019) looks at what the Conservative Party has pledged regarding other payroll issues,
- The Apprenticeship Levy
- Student Loans and
- Statutory Payments
This information is from their 64-page Manifesto ‘Get Brexit Done, Unleash Britain’s Potential’. Given that the Conservative Party have a majority in the House of Commons, this seems to be relevant at this time.
This is not simple at all:
- Whilst the Apprenticeship Levy applies to all employers UK-wide, it is only employers in England that can access the funds via a digital account to use on professional vocational apprenticeship qualifications. Apprenticeships are a devolved function and Scotland, Wales and Northern Ireland have a different apprenticeship approach
- Whilst the broad nature of Student Loans applies UK-wide (in terms of the thresholds and percentages), each nation in the UK has different Student Loan ‘products’. For example, only Postgraduate Loans in England and Wales are collected through the payroll with Scotland and Northern Ireland having Postgraduate products that are collected under Plan 1
- Statutory payments (SSP, SMP etc) generally apply UK-wide, even though there is separate legislation in Great Britain and Northern Ireland. This is because statutory payments are usually derived from a statutory entitlement to time away from the workplace, an employment right that is devolved to Northern Ireland. It was always safe to say that Great Britain and Northern Ireland’s entitlements mirrored each other – though the new entitlement to Statutory Parental Bereavement Leave and Pay will only apply in Great Britain!
In short, we have to watch announcements on these very carefully and decide if, where and how any announcements will apply.
Again, we have to watch this one:
- The Apprenticeship Levy legislation applies UK-wide. What does not apply equally and uniformly is the way that employers can use any Levy that they have paid
- The Student Loan repayment legislation applies UK-wide (i.e. the rates and thresholds). It is the legislation regarding new Loan products that varies
- Statutory payment legislation is often derived from employment rights, therefore, the right to be paid results in different legislation between Great Britain and Northern Ireland. This applies to Statutory Sick Pay as well, even though there is no statutory right to take sick leave
I detail the pledges (the formal promises) that the Conservatives made in their 2019 Manifesto:
Apprenticeships and the Levy
- Boris Johnson gave his ‘guarantee’ at the start of the Manifesto to see ‘Millions more invested every week in science, schools, apprenticeships and infrastructure while controlling debt’. This can only apply to England, as spending on apprenticeships (and schools) is a devolved responsibility
- The Manifesto pledges to ‘help employers invest in skills and look at how we can improve the working of the Apprenticeship Levy’. Quite what this means in practice is open to interpretation. Is it the payment of the Levy itself through the payroll or the way that Levy funds can be used on professional apprenticeship qualifications in England?
- ‘In the next Parliament, we expect to train up hundreds of thousands more highly skilled apprentices’. This seems to apply to the apprenticeship regime that is already in place. This comment is followed by a statement on page 36 that says a ‘significant’ number of new apprentices will be required for the planned infrastructure projects
- ‘We will create a new National Skills Fund worth £3 billion over the next Parliament’. This will be designed so that the UK Government matches employer funding for individuals and SMEs who want ‘high-quality education and training’. There will be a consultation on the design of this Fund which will be interesting. One of the reasons for the apprenticeship regime in England was the lack of high-quality and training that employers needed to be able to equip workers with the knowledge, skills and behaviours for the role
- ‘50,000 more nurses, with students receiving a £5,000-£8,000 annual maintenance grant every year during their course’. This is all for the purposes of encouraging more people into the nursing profession, it will apply UK-wide and will not be repayable. Not a payroll issue
- ‘We will look at the interest rates on loan repayments with a view to reducing the burden of debt on students’. Another issue that is not payroll-related (in terms of affecting repayments, save to say that any reduction in interest may mean a reduction in the term of the Loan)
There are two other mentions of students, mainly looking at access and availability of good training. In short, little that will affect payroll administration but important nevertheless.
- ‘We will create a single enforcement body and crack down on any employer abusing employment law’. This is all to do with the body recommended by Mathew Taylor, on which the UK Government consulted I cannot see that this can apply UK-wide but it is an important one to keep an eye on. This is not so much the statutory payment that will be impacted but the employment right giving rise to it, which Taylor said employers were not always complying with
- Re children in care, the Manifesto says that adoption placements will be considered ‘where possible’. All I see here is a potential for the increase in Statutory Adoption Leave and Pay. This is generally a devolved issue so may not apply UK-wide
- ‘We will legislate to allow parents to take extended leave for neonatal care’. This is another Mathew Taylor ‘Good Work’ recommendation. A consultation took place earlier in 2019 about proposals for a new leave and pay entitlement for parents of babies that require neonatal care after birth. This new statutory right will apply in Great Britain only
- The Manifesto says ‘we will look at ways to make it easier for fathers to take paternity leave’. This was part of the above consultation and we could see developments in this area, either with regards to the duration of leave or the rate of payment. Again, I can only see that this will apply in Great Britain
- ‘We will also extend the entitlement to leave for unpaid carers’. Watch out for this one
I cannot see that any of the Manifesto promises will make an appearance in the Budget, except to say that these things are happening / will happen.
We will have to watch for any changes to apprenticeships in England, as the new apprenticeship system has given rise to qualifications and training that employers need rather than qualifications and training that commercial organisations are capable of providing.
We already have the Student Loan annual thresholds for 2020/21 (though do not have confirmation of the pay period thresholds). Therefore, what professionals are really interested in from the Budget is the uplifts to SSP, SMP etc.