Last reviewed 3 September 2020
The Prime Minister recently said that the way out of the coronavirus crisis was to “Build, build, build”. Now Chancellor Rishi Sunak has made it clear that the Treasury sees the way ahead has being defined by keeping as many people as possible in work.
Tackling unemployment, particularly among young people, is at the heart of the plan set out in his Summer Update to Parliament. (The Budget and Spending Review will follow in the Autumn.)
Job retention bonus
If an employer brings someone back from furlough and keeps them in employment (earning at least £520 a month) until January, they will receive a £1000 bonus. However, people must be brought back to “proper work”.
Aimed at helping young people (16–24-year-olds), this will pay their wages for six months if employers take them on in new jobs. There will be no cap on numbers and the Chancellor urged every employer, big or small, to hire as many kickstarters as possible.
”These will be decent jobs,” he said, “with a minimum of 25 hours per week paid at least the National Minimum Wage (NMW)”. Employers will be able to top up that payment if they wish.
The scheme is now open for applications and will run until December 2021.
The Government will pay employers £1000 to take on trainees and will provide £100 million to create places on Level 2 and 3 courses. Companies will be given £2000 each to encourage them to hire apprentices and there will be a new bonus of £1500 for employers taking on an apprentice aged over 25.
Payments will come in two instalments:
the first instalment is payable if an apprentice is still employed and being trained by the organisation after 90 days
the second instalment is payable if they are still employed after 365 days; if the apprentice changes employer during this time, the second payment will not be received.
To be eligible to receive this payment, each apprentice must meet the following criteria:
have a contract of employment start date between 1 August and 31 January 2021
have not been employed by the company within six months prior to the start date
have an apprenticeship agreement containing a start date between 1 August 2020 and 31 January 2021.
Applications for the payment opened on 1 September 2020, and can be applied for after employers add new apprentices to their apprenticeship service account. The first payments will be made from January 2021 and will be paid directly into employer’s bank accounts.
The Chancellor said that £250,000 will be invested in careers advisors while the number of work coaches in job centres will be doubled.
Vouchers will be available for homeowners and landlords to improve homes by making them more energy efficient. These will cover at least two-thirds of the cost of work, up to £5000 per household. Worth £2 billion, this scheme will, the Chancellor said, create thousands of “green jobs”.
He will also make available £1 billion to improve the energy efficiency of public sector buildings.
There will be a temporary holiday on stamp duty on the first £500,000 of all property sales in England and Northern Ireland, to run until 31 March 2021. This means nine out of 10 people will pay no stamp duty, the Chancellor predicted.
Keeping people in work in hard-hit sectors
Hospitality and tourism have been hardest hit by the pandemic so the Chancellor has announced two new measures aimed at protecting jobs in these sectors.
First, VAT will be cut on food, accommodation and attractions from 20% to 5% from 15 July 2020 to 12 January 2021.
Second, during August, everyone will get an “Eat out to help out” voucher allowing a 50% discount when they have a meal in a participating pub or restaurant (up to £10 per head for adults and children and applying Monday to Wednesday). Venues will be able to redeem the vouchers quickly, with money in their accounts after five working days, Mr Sunak said.
Those in favour?
The British Chambers of Commerce (BCC) welcomed the decision to prioritise work experience and job opportunities for those entering the world of work and agreed that the Kickstart Scheme will help firms create and support thousands of opportunities for young people.
Dame Carolyn Fairbairn, CBI Director-General, said that the Chancellor’s jobs plan will be a much-needed “down payment in young people’s futures” and she called on business and Government to work to deliver the Kickstart Scheme simply and at speed.
Independent think tank, the Resolution Foundation, also praised the Kickstart Scheme, given that young people have been hit hardest by Britain’s growing jobs crisis. “It is very welcome that the Government has opted for a bold and ambitious scheme, with £2 billion potentially meaning jobs for around 350,000 young people,” it said.