July 10, 2020 A plan for jobs
The headlines may relate to stamp duty and eating out but the key message from the Chancellor’s summer statement on 8th July was the importance of protecting existing jobs alongside the creation of new highly skilled posts. With more than a quarter of the UK workforce having been furloughed over recent months and with OBR predictions that without intervention employment could rise to 10% it is perhaps understandable that jobs came top of the agenda.
Not only that, measures to protect jobs also help to protect businesses and the wider economy. And with that economy having contracted 25% over two months, in the process wiping off growth seen over the past eighteen years, anything which will boost recovery can be seen as a positive move, in the short term at least.
With that in mind what are some of the key features of the Chancellor’s new plan for jobs?
- Job retention bonus. The concern is that employers will bring people back from furlough only to then make them redundant. Accordingly the Chancellor has announced that the Government will make a payment to businesses of £1000 for every employee brought back from furlough who is in continuous employment up to and including January 2021. To avoid people being nominally on the books but not actually working the caveat is that employees have to be paid at least an average of £520 per month between November and January.
- Kickstart scheme. This scheme is designed to boost the creation of jobs for 16 to 24-year-olds who may be facing long-term unemployment. So the Government is calling on businesses to create new jobs for young people. As long as these new jobs are paid at least at the minimum wage for a minimum of twenty-five hours per week the government will pay the first six months of wages plus an amount to cover overheads.
- Traineeships and apprenticeships. Employers will be paid £1000 take on new trainees. At the same time the government intends to improve learning opportunities by creating additional places on level 2 or 3 courses in high demand sectors such as engineering, construction and social care. Those businesses taking on young apprentices will receive a £2000 payment with a £1500 payment for apprentices aged over 25.
Taken alongside other measures to support sectors such as hospitality, housing and construction the summer statement was cautiously welcomed by industry bodies with FSB chairman Mike Cherry commenting “we’ve always said that the Chancellor should take jobs first approach to today’s intervention and that’s exactly what he’s done.”