In this week’s Enews, there is news on what the Confederation of British Industry wants to see in the Autumn Budget. There is also news on the numbers of self-employed workers and concerns over AI replacing jobs to update you on.
Budget choices will determine success of UK’s growth mission, says CBI
Chancellor Rachel Reeves must use the Autumn Budget to make the bold decisions necessary to get the economy firing, says the Confederation of British Industry (CBI).
In its Budget submission, the business group says that businesses will judge the Budget a success or failure based on its ability to inject immediate momentum into a stuttering economy.
Ms Reeves will need to give both firms and consumers confidence that the government is prioritising long-term prosperity over short-term thinking in the Budget.
The Chancellor should be prepared to challenge party orthodoxy and take difficult decisions to deliver the long-term stability and growth the country needs, adds the CBI.
Rain Newton-Smith, CBI Chief Executive, said:
‘The government deserves huge credit for recognising the challenges faced by the economy and for showing determination to chart a course towards renewal that prioritises both public and private investment.
‘But the goal of a growing economy that raises living standards across the board won’t be achieved until real fiscal headroom is created and the cycle of short-term thinking that’s holding the country back is broken.
‘Yearly tinkering to close an ever-increasing fiscal gap simply isn’t a viable approach to a challenge this big.
‘We need to take tough decisions now or risk a downward spiral that sees us robbing Peter to pay Paul just to fund normal government expenditure and puts our growth prospects in peril. Short-term thinking leads to long-term decline, let’s not make that a political choice we live to regret.’
Internet link: CBI website
Self-employed overcounted for decades by official data
Official statistics have overstated the size of the UK’s self-employed population for two decades, according to the Institute for Fiscal Studies (IFS).
The share of national income flowing to those with the highest incomes has also been over-estimated, adds the think tank.
The mismeasurement stems from a longstanding error in the Survey of Personal Incomes (SPI) – a dataset created by HMRC, derived from tax returns and widely used across government for internal modelling.
The number of people with self-employment income has long been smaller than official statistics suggest. Between 2002/03 and 2017/18, the SPI overcounted the number of individuals with income from sole trading or partnerships by more than 500,000 each year on average – an overestimate of around 14%.
Rapid growth in self-employment is a more recent phenomenon than previously estimated. The SPI suggests a steady rise in self-employment since 2000, but the new data show that growth was in fact much slower before 2009/10, only matching growth rates seen in the SPI after the financial crisis.
Isaac Delestre, Senior Research Economist at the IFS, said:
‘The rise of self-employed work has been one of the most important features of the UK labour market over the last 20 years.
‘But these new data reveal a different narrative to the one told by official statistics – with the period preceding the financial crisis showing much slower growth in the self-employed population than we previously thought. That begs the question: what changed after the financial crisis that led to an acceleration in the growth of self-employment?’
Internet link: IFS website
AI will shrink headcount as hiring confidence remains at record low
One in six employers expect AI to shrink their workforce over the next year, with junior roles most at risk, according to a survey conducted by the Chartered Institute of Personnel and Development (CIPD).
Almost two thirds of those surveyed believe that clerical, junior managerial, professional or administrative roles are most likely to be lost because of AI.
The risk is highest in large private sector firms, where 26% expect headcount to fall, compared with 17% in the private sector overall and 20% in the public sector.
Among those who expect headcount to reduce because of AI in the next 12 months, a quarter expect to lose more than 10% of their workforce.
James Cockett, Senior Labour Market Economist at the CIPD, said:
‘AI is transforming the way many people work and has great potential for improving productivity and performance, but it also risks leaving many people behind.
‘Junior roles stand to be most affected by AI, but we need a national drive to retrain and upskill people of all ages and career stages. It’s crucial that we see rapid progress on the development of the Growth and Skills Levy, informed by genuine consultation with employers, to ensure workers are equipped with the skills for an AI-driven economy.’
Internet link: CIPD website
