The Chancellor today has revealed the biggest package of support for unemployment in decades as he sets out the plan to help Britain bounce back from coronavirus. Read more about A Plan for Jobs here.
Highlights of the Chancellor’s speech today are:
Job Retention Bonus: To help firms keep on furloughed workers, UK Employers will receive a one-off bonus of £1,000 for each furloughed employee who is still employed as of 31 January 2021.
Kickstart Scheme: A new £2 billion scheme will also be launched to create hundreds of thousands of new, fully subsidised jobs for young people across the country. Those aged 16-24, claiming Universal Credit and at risk of long-term unemployment, will be eligible. Funding available for each six-month job placement will cover 100% of the National Minimum Wage for 25 hours a week – and employers will be able to top this wage up.
Employment and support schemes: A total of £1.6 billion will be invested in scaling up employment support schemes, training and apprenticeships to help people looking for a job.
Creating jobs: The plan will also create tens of thousands of jobs through bringing forward work on £8.8 billion of new infrastructure, decarbonisation and maintenance projects. In addition, £5.8 billion will be spent on shovel-ready construction projects to get Britain building.
Eat Out to Help Out:To encourage people to safely return to eating out at restaurants the Government’s new discount scheme will provide a 50% reduction for sit-down meals in cafes, restaurants and pubs across the UK from Monday to Wednesday every week throughout August 2020.
VAT: The rate of VAT applied on most tourism and hospitality-related activities will be cut from 20% to 5%.
Stamp Duty: A temporary increase to the Nil Rate Band of Residential SDLT (Stamp Duty) from £125,000 to £500,000 has been introduced until 31 March 2021.
The Chancellor of the Exchequer, Rishi Sunak, said:
“Young people bear the brunt of most economic crises, but they are at particular risk this time because they work in the sectors disproportionately hit by the pandemic.
“We also know that youth unemployment has a long-term impact on jobs and wages and we don’t want to see that happen to this generation.
“So we’ve got a bold plan to protect, support and create jobs – a Plan for Jobs.”
Under the Kickstart Scheme, employers will be able to offer a six-month work placement for young people aged between 16-24 who are claiming Universal Credit and at risk of long-term unemployment.
The Government will fund each “Kickstarter” job covering 100% of the National Minimum Wage for 25 hours a week – and employers will be able to top up this wage. The jobs will give young people the opportunity to build their skills in the workplace, and to gain experience that will improve their chances of going on to find long-term sustainable work.
Young people are more likely to be furloughed, and with a quarter of a million more people aged under 25 claiming unemployment benefits since March, young people are leaving education into an extremely difficult jobs market.
The Chancellor also announced a £111 million investment to triple the scale of traineeships in 20-21, an extra £32m for the National Careers Service to provide tailored jobs advice to a quarter of a million more young people, and £17 million of funding to almost triple the number of sector-based work academy placements in 2020-21.
The Chancellor’s plan for jobs and the PM’s “New Deal’ speech last week will form the second phase of a three-phase strategy to secure the UK’s economic recovery from coronavirus.
The first phase, which began in March, focused on protection with one of the largest and most comprehensive economic responses in the world. And the third phase will follow in the autumn with a Budget and Spending Review.
Commenting on the Chancellor’s Summer Statement, delivered today, British Chambers of Commerce Director General Dr Adam Marshall said:
“Businesses will celebrate many of the Chancellor’s announcements today, although it is likely that the scale of the stimulus needed to help the UK economy restart, rebuild and renew will need to be greater still over the coming months.
“Targeted measures to help young people gain work experience and enter the labour market at this challenging time are welcome, and, so too is the focus on a greener recovery and the acceleration of key infrastructure projects. The VAT cut will help firms in the hospitality and tourism sectors working hard to restart after many months of lost revenue.
“Over the coming weeks the Chancellor will also need to address the ticking clock on a number of other key concerns – including the impending end of key business loan schemes, and the unanswered question around what support will be offered to businesses and communities that face local lockdowns.”
On the temporary VAT cut from 20% to 5% in the hospitality and tourism sectors, BCC Head of Economics Suren Thiru said:
“The Chancellor has listened to our call for a temporary cut in VAT which will kickstart consumer spending in some parts of the economy. This is a welcome step and will help to stimulate a more rapid pickup in activity in those sectors and supply chains hardest hit as the economy gradually reopens.
On ‘Eat Out to Help Out’ vouchers, BCC Head of Economics Suren Thiru said:
“While the Chancellor has listened to our call for a voucher scheme to incentivise consumer activity, the scale and scope of this scheme must be much bolder to make a material difference.”
On the Job Retention Bonus, BCC Head of People Policy Jane Gratton said:
“We look forward to seeing the detail of the job retention bonus to help safeguard jobs for some furloughed staff, but the best way to protect jobs is to reduce the overall cost of employment. Ministers must consider a cut in employer national insurance contributions in the coming months.
On the Apprenticeship Recovery Package, BCC Head of People Policy Jane Gratton said:
“The Chancellor has listened to our calls for a wage subsidy to help employers create high quality apprenticeships for young people entering the workforce in a difficult year.
“More should be done to support employers, including allowing apprentices to undertake much of the off the job training upfront to give employers more time to recover and ensure apprentices are better prepared to enter the workplace.
“We still need to see greater flexibility in the apprenticeship levy so that employers can help their people get the skills they need to succeed in an evolving workplace.”
On measures still needed, BBC Co-Executive Director Hannah Essex said:
“In the coming weeks the Government needs to consider taking further bold steps in response to this crisis.
“BCC’s research shows investment intentions have been hit hard during the pandemic, and so the Government should be preparing new incentives for business investment in the UK, including extending the £1 million Annual Investment Allowance for a further two years and broadening its scope to include training, the transition to net zero and spending on making workplaces Covid-secure.
“Businesses face cliff-edges in the autumn as existing support winds down, and so the Government must consider reducing national insurance contributions and extending existing loan schemes.
“Many businesses are concerned about how they will survive in the event of a local lockdown, and we ask the Government to urgently set out what support will be available if that happens.”
“Many businesses are concerned about how they will survive in the event of a local lockdown, and we ask the Government to urgently set out what support will be available if that happens.”
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