Delivering his Summer Economic Update in Parliament, the Chancellor Rishi Sunak today (8th July 2020) continued with his campaign to support the business and the jobs community as they deal with the impact and disruption caused by the coronavirus.
Announcing a package of measures to support jobs during his Summer Economic update as part of his nominated Plan for Jobs 2020, we provide a summary of the key details below.
It includes plans to protect jobs, help younger workers and encourage spending with measures such as a VAT cut for leisure activities and a restaurant voucher scheme. In a wider attempt to boost the property market stamp duty is being temporarily reduced in England and Northern Ireland. On green measures, the Chancellor announced a £2 billion “green homes grant” to help homeowners and landlords apply for vouchers to make their properties more energy efficient
- Job Retention Bonus: employers that bring back an employee that was furloughed, and continuously employ them through to January 2021, will be paid a £1,000 government bonus per employee retained. Employees must be seen to be gainfully employed during this period and be paid at least £520 a month, on average, from November 2020 to January 2021. All furloughed employees returning to employment in this way will be available for the £1,000 bonus.
- Kickstart scheme: this new scheme will cover the wages (plus associated costs) of new jobs created for any 16 to 24-year-old - at risk of long-term unemployment - for six months. These will have to be new jobs, of at least 25 hours a week and paid the National Minimum Wage. Employers will need to offer kickstarters training and support to find a permanent job. Employers can apply to be part of this new scheme from August 2020 with first jobs starting in the autumn. Government has made an initial £2bn available for this scheme, but there is no cap on the number of places made available.
- Apprenticeships: for the next six months government will pay employers to create new apprenticeships. The amount payable will be £2,000 for each apprentice. A new bonus to take on apprentices aged over 25 has also been announced. This will amount to £1,500 per appointment.
- Green jobs initiatives: as an incentive to create jobs in the green jobs’ market a number of new grants have been announced. From September homeowners and landlords will be able to apply for a grant to make their home more energy efficient. The £2bn Green Homes grant will cover at least two-thirds of the cost up to £5,000 per household. For low income households these grants will cover all costs up to £10,000. There will also be a further £1bn allocated to make public buildings greener.
- Boost for the housing market: From today – for a temporary period to 31 March 2021 – the Stamp Duty Threshold is increased to £500,000. It is projected that this will reduce the average stamp duty bill by £4,500.
- VAT reduction for hospitality and tourism: for the next six months VAT charged on food, accommodation and attractions (such as eat-in or takeaway food in restaurants, cafes, pubs, cinemas, theme parks and zoos) will see VAT reduced to 5%.
- Eat Out to Help Out discount: for August meals eaten at any participating business Monday, Tuesday or Wednesday, will be 50% off up to a maximum discount of £10 per head including children.
In response to the Chancellor’s summer statement, Neil Carberry, Chief Executive of the Recruitment Employment Confederation (REC), said:
“We asked the Chancellor to focus on jobs, and he has done so. Moving on from the furlough scheme as the crisis develops is essential – people need stable jobs for the long-term, not the sort of short-term subsidies that were needed for lockdown. The employee retention bonus and the kick start scheme are good ideas – and it is right to focus support on young people. The kick start scheme will use temporary work as a stepping stone to get young people into work again – an approach the REC knows to work. The effect of unemployment on a young person’s career and earnings can be catastrophic.
“We’re delighted the government has recognised the vital role recruiters play in helping people find their feet when they become unemployed. After months of working closely with DWP, today’s announcement of a specific fund for the delivery of private sector employment support to jobseekers will help address unemployment and support the industry to keep doing what it does best."