Chancellor reveals major new job policies to combat COVID crisis
The Chancellor today delivered news of the next phase of the Government’s support for workers and businesses hit by the COVID-19 pandemic.
In his Summer Statement to Parliament this afternoon, he revealed major news on:
- Incentives for saving jobs
- New jobs for young people
- Stamp Duty
- Green homes
Here are some of the bigger announcements, in summary:
Furlough is going to end
In October, the Coronavirus Job Retention Scheme will end. There had been speculation that it could perhaps be extended further but Mr Sunak said it would be ‘irresponsible’. Full details in our blog here.
Job retention bonus for businesses
Instead of extending furlough, Mr Sunak has decided to offer incentives to employers to bring back their furloughed staff. Read all the details in this article.
VAT cut from 20 to five per cent
VAT on hospitality and tourism is to be cut from 20% to 5%, from 15 July 2020 to 12 January 2021.
The cut applies to food and non-alcoholic drinks as well as accommodation and tickets for attractions. Mr Sunak said the move is to "get the sectors moving and to protect jobs".
New jobs scheme for young people
A new £2bn Kickstart scheme is designed to support 16 to 24-year-olds – the group predicted to be the group most impacted by the COVID-19 crisis. This will directly pay employers to create new jobs for those in this age bracket who are at risk of long-term unemployment. The Government will subsidise six-month work placements.
The Government will cover the cost of those on the scheme working 25 hours per week for the National Minimum Wage, allowing employers to top it up as they see fit. This could mean a grant of some £6,500.
The Treasury papers stated: “Funding available for each job will cover 100% of the relevant National Minimum Wage for 25 hours a week, plus the associated employer National Insurance contributions and employer minimum automatic enrolment contributions.”
Firms can apply for the scheme from next month.
Traineeships for young people
Further support for young people came in the form of an announcement of an additional £111 million this year for traineeships in England “to fund high quality work placements and training for 16-24 year olds”.
The Treasury stated: “This funding is enough to triple participation in traineeships. For the first time ever, the government will fund employers who provide trainees with work experience, at a rate of £1,000 per trainee. The government will improve provision and expand eligibility for traineeships to those with Level 3 qualifications and below, to ensure that more young people have access to high quality training.”
Stamp Duty cuts
In the run up, media reports suggested a six month stamp duty holiday would be revealed. But the Chancellor went further, cutting the tax for properties up to £500,000 until 31 March 2021.
The Treasury stated: “Nearly nine out of ten people getting on or moving up the property ladder will pay no SDLT at all.”
Green homes grants
A new £2 billion Green Homes Grant will provide, from September, vouchers for landlords and homeowners to make their homes more energy efficient and create local jobs. The grants will cover at least two thirds of the cost, up to £5,000 per household.
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For the full Treasury papers, click here: