Chancellor’s Economic Update to Boost Jobs

08 Jul 2020

The Chancellor, Rishi Sunak, today (8 July 2020) delivered his Summer Economic Update in Parliament.

He announced a package of measures to support jobs in every part of the country; give businesses the confidence to retain and hire; and provide people with the tools they need to get better jobs.

The plan for jobs is the second part of the Government’s three-phase plan to secure the UK’s economic recovery from coronavirus.  Below is a summary most relevant to the manufacturing sector.

Supporting Jobs

UK Employers will receive a one-off Job Retention Bonus of £1,000 for each furloughed employee who is still employed as of 31 January 2021

A new £2 billion Kickstart Scheme will create hundreds of thousands of new, fully subsidised jobs for young people across the country. Those aged 16-24, claiming Universal Credit and at risk of long-term unemployment, will be eligible. Funding available for each six-month job placement will cover 100% of the National Minimum Wage for 25 hours a week – and employers will be able to top this wage up.

Training and Apprenticeships

Businesses will be given £2,000 for each new apprentice they hire under the age of 25 (between August 2020 and January 2021). This is in addition to the existing £1,000 payment the Government already provides for new 16 to 18-year-old apprentices.

A £111 million investment to triple the scale of traineeships in 2020-21 ensuring more young people have access to high quality training.

£17 million of funding to triple the number of sector-based work academy placements in 2020-21

Nearly £900 million to double the number of work coaches to 27,000.

Over a quarter of a million more young people to benefit from an extra £32 million investment in the National Careers Service.

Company Bonuses

The Government’s Economic Plan also includes an incentive for companies to bring back furloughed employees. Employers will receive £1,000 per employee they bring back from furlough leave and keep employed until January 2021. For businesses to be eligible to receive the bonus, the employee must be paid £520 (on average) each month from November 2020 to January 2021.

Tourism and Hospitality

To encourage people to safely return to eating out at restaurants, the Government’s new Eat Out to Help Out discount scheme will provide a 50% reduction for sit-down meals in cafes, restaurants and pubs across the UK from Monday to Wednesday every week throughout August 2020.

The rate of VAT applied on most tourism and hospitality-related activities will also be cut from 20% to 5%.

Principal source: Gov.UK