Hammond Wants Help From U.K. Businesses to Boost Apprenticeships

(Bloomberg) -- Chancellor of the Exchequer Philip Hammond will ask U.K. businesses for help to improve an unpopular apprenticeship program, as he seeks to boost support for the Conservative Party among company executives.

The 18-month-old Apprenticeship Levy has failed to boost the number of trainees, while some businesses paying the charge say it’s too bureaucratic, rigid and essentially a stealth tax. It requires employers with an annual wage bill of more than 3 million pounds ($3.9 million) to pay 0.5 percent of their total payroll bill toward it.

In a speech to the annual Tory party conference in Birmingham Monday, Hammond will ask for advice on how to overhaul the levy after 2020, according to his office. He’ll also say that from April next year, large employers will be able to transfer as much as 25 percent of their levy funds to businesses in their supply chain to help increase the number of people in apprenticeships.

Hammond’s conciliatory tone comes as the Conservatives’ claim to be the pro-business and pro-enterprise party have been undermined by divisions over Brexit. Former Brexit minister Steve Baker wrote in the Sunday Telegraph that the Confederation of British Industry, the country’s biggest business lobby, is a “grave menace to the political stability and economic prospects of the U.K.”

“Economic freedom goes hand in hand with political freedom and above all, the belief in the power of enterprise as the route to unleash talent and to improve lives,” Hammond will say on Monday. “That’s why we back business, as the cornerstone of a successful economy; as a force for good in our society; and as an essential expression of our values.”

Even though companies are supposed to be able to claim money back to fund apprentices in their companies, just 108 million pounds of the 1.39 billion pounds paid into the levy was drawn down, according to a Freedom of Information request.

To contact the reporter on this story: Jessica Shankleman in London at jshankleman@bloomberg.net

To contact the editors responsible for this story: Flavia Krause-Jackson at fjackson@bloomberg.net, Stuart Biggs, Jessica Shankleman

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