Throughout the COVID-19 outbreak, the Government has provided a £160 billion support package to protect jobs, incomes and businesses – one of the largest and most comprehensive in the world - which included £49 billion of extra funding for our vital public services, including the NHS. I welcome that the analysis, published today, shows that this intervention has significantly protected incomes, with the least well off in society benefitting the most.
This was, however, only the first part of a three-phase plan to secure our economic recovery and it is now time to focus on jobs. Therefore, this afternoon, the Chancellor gave his Summer Economic Update to the House of Commons in which he announced the Government’s Plan for Jobs, which is a £30 billion package of measures to support, create and protect jobs across the country focusing on skills and young people, and revitalising hard-hit sectors, with investment in housing and infrastructure. I have provided a summary of today’s key announcements below.
The focus of the third phase of this plan will shift to rebuilding and the Government will produce a Budget and a Spending Review in the Autumn.
- A new Jobs Retention Bonus Scheme will be introduced to incentivise businesses to keep employees on. Under this scheme, businesses will be given a one-off payment of £1,000 for every employee who was furloughed previously and who is still employed as of 31 January 2021.
- A £2 billion Kickstart Scheme will be launched to help create hundreds of thousands of new, fully subsidised jobs for young people. This scheme will directly pay businesses to create new, decent and high-quality jobs for any 16-24 year old at risk of long-term unemployment. Funding available for each job will cover 100% of the National Minimum Wage for 25 hours a week, for six months in total, plus an admin fee – for a grant of around £6,500 per placement. There will be no cap on the number of places available.
- Businesses will be paid £1,000 to take on trainees to get young people ready for work. The Government will provide £111 million to triple the scale of Traineeships, which consist of work experience placements, training and work preparation for 16-24 year olds. The Government will also increase the eligibility of Traineeships to include young people qualified up to Level 3 (advanced – equivalent to 2 good A Level passes), up from Level 2 (intermediate – equivalent to achieving 5 GCSEs at 9-4) currently.
- £2,000 will be provided to employers for each new apprentice they hire aged under 25, helping more people into the workplace while developing key skills. The Government will also provide £1,500 for any apprentice over 25.
- £101 million will be provided to help 18 and 19 year olds take high value courses at Levels 2 and 3 where work opportunities are not available. This will give young people who have just left school the skills they need to find work in high-value sectors such as engineering, construction and social care.
- The support on offer to help people find a job, so they can get back on their feet and into work will be expanded with a package of measures worth over £1 billion. These measures include: doubling the number of Work Coaches through Job Centre Plus to 27,000; providing £150 million into the Flexible Support Fund to remove barriers to work; and investing £32 million to recruit more advisers for the National Careers Service so that it can provide advice to 269,000 more people.
- VAT will be temporarily cut for the tourism and hospitality sectors, giving a much-needed boost to some of the industries hardest hit by COVID-19. From 15 July 2020, the rate of VAT applied across the UK to hospitality, accommodation and attractions will be cut from 20% to 5% until 12 January 2021. This could support almost 2 million businesses and protect 2.5 million jobs.
- A new Eat Out to Help Out scheme will be launched which will give people up to 50% off food and non-alcoholic drinks - up to a value of £10 per person - in participating restaurants, cafes and pubs from Monday-Wednesday for the month of August. Businesses can claim the money back from the Government on a weekly basis and receive funds within 5 working days.
- Stamp duty will be temporarily cut on all homes under £500,000 to catalyse the housing market and boost confidence. From 9 July 2020-31 March 2021, the threshold at which stamp duty applies will be increased from £125,000 to £500,000. Everybody buying a main home will see their tax cut, saving up to £15,000. Stamp duty for the average buyer will fall from £4,500 today to nothing tomorrow, and nearly 9 out of 10 people buying a main home will pay no stamp duty whatsoever.
- The energy efficiency of homes will be upgraded across England through a new Green Homes Grant, saving people hundreds of pounds on their energy bills, while helping to meet the Government’s goal of Net Zero by 2050. The Government will provide £2 billion to allow people to apply for a voucher to fund at least two-thirds of the cost of upgrading the energy performance of their homes – up to a maximum of £5,000. Low-income households will be eligible for up to 100% of government funding, up to £10,000. This measure will also reduce energy bills by up to £300 a year and help to save carbon.
- A pilot scheme to decarbonise social housing will be launched, reducing energy bills by an average of £200 for some of the poorest households in society. The Government is providing £50 million to pilot new approaches for retrofitting social housing at scale – meaning warmer and more energy efficient homes.
- £1 billion will be provided to improve the energy efficiency of public sector buildings, helping to deliver on the Government’s ambitious climate change targets. The scheme will offer grants to public sector bodies, including schools and hospitals, to fund both energy efficiency and low-carbon heat measures.
All the documents relating to the statement can be found here.
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