Further to our article from earlier in the week, the Chancellor of the Exchequer, Rishi Sunak, made preserving employment his priority in his summer statement, as he presented his "plan for jobs".
Plan For Jobs
At the heart of the Chancellors plan for jobs, a package worth £30 billion, was the announcement of a 'job retention bonus' in which the Government will make a one off payment to employers of £1,000.00 for every furloughed employee who remains continuously employed by them until at least the end of January 2021, subject to the employee earning in excess of the lower earnings limit of £520.00 on average per month during the 3 month period the 1st November 2020 - 31st January 2021.
Additional measures that were announced as part of the plan for jobs were:-
- The 'kick start scheme' - a £2 billion fund to provide 16-24 year olds with work placements for 6 months, with the Government paying for the first 25 hours per week of work at the national minimum wage rate, plus associated employer national insurance contributions and pension contributions
- Apprenticeships bonus - between the 1st August 2020 and the 31st January 2021, employers will be paid a £2,000.00 bonus for each additional apprentice they take on under the age of 25, and £1,500.00 for each additional apprentice they take on aged 25 and over.
- Between the 8th July 2020 and the 12th January 2021, VAT will be reduced from 20% to 5% for the hospitality and tourism sectors.
- The 'Eat Out to Help Out' discount scheme - for each participating business, diners will be entitled to 50% off their meals up to a maximum of £10 per head Monday to Wednesday throughout August 2020. This measure is designed as part of the plan for jobs to support the 1.8 million employees in the food services sector
- Capital infrastructure spending - the prime ministers already announced £5 billion of accelerated infrastructure spending plus the plan for jobs, will mean that a total of £8.6 billion of accelerated capital infrastructure spending will be provided in terms of programs with a start date during the period 2020-22.
- A £3 billion fund for decarbonising social housing and public sector buildings
- A £2 billion scheme to fund a 'green homes grant' for retrofitting houses with insulation, with each household receiving up to £5,000.00 in vouchers (up to £10,000.00 for the poorest families). This measures is designed create around 100,000 new 'green' jobs, as part of the plan for jobs
- The stamp duty threshold will rise from £125,000.00 to £500,000.00 as a boost to the housing market
Reaction
Commenting on the Chancellor's plan for jobs, Carolyn Fairbairn, the director general of the Confederation of British Industry (CBI) stated that: "The Chancellor is absolutely right to prioritise jobs in his summer statement. Flattening the daunting unemployment curve about to hit our country could not be more important. Joblessness scars lives and hits the young and most disadvantaged hardest. Today’s jobs plan is an important step forward. For young people, the Kickstarter Scheme will help create jobs in the short-run that can turn into opportunities for the long-run......It is also good to see direct support for apprenticeships and careers advice, which will help build the skills as well as the jobs of the future. But prevention is better than cure. Many viable firms are facing maximum jeopardy right now. The job retention bonus will help firms protect jobs. But with nearly 70% of firms running low on cash, and three in four reporting lack of demand, more immediate direct support for firms, from grants to further business rates relief, is still urgently needed."
The General Secretary of the TUC, Frances O’Grady, was more critical of the Chancellor's plan for jobs. She stated: "Mass unemployment is now the biggest threat facing the UK, as shown by the thousands of job losses at British Airways, Airbus and elsewhere. The government must do far more to stem the rising tide of redundancies. We can’t afford to lose any more good skilled jobs. The chancellor should have announced targeted support for the hardest-hit sectors like manufacturing and aviation. Struggling businesses will need more than a one-off job retention bonus to survive and save jobs in the long-term."
