London:
UK Chancellor of the Exchequer Rishi Sunak on Wednesday announced a ‘mini-budget’ that includes a bonus scheme for employers who bring furloughed or forced leave staff back to work as part of a major drive to save jobs hit by the coronavirus pandemic shutdown.
As part of his Summer Economic Update in Parliament, dubbed a mini-Budget, the Indian-origin finance minister also unveiled a new 2 billion pound Kickstart Scheme to create “hundreds of thousands” of new, fully subsidised jobs for young people across the UK, with the overall package of measures estimated at around 30 billion pounds.
“Our plan has a clear goal: to protect, support and create jobs. It will give businesses the confidence to retain and hire; to create jobs in every part of our country; to give young people a better start; to give people everywhere the opportunity of a fresh start,” said Sunak. “Throughout this crisis, I have never been the prisoner of ideology. For me, this has never just been a question of economics, but of values. We believe in the nobility of work. We believe in the inspiring power of opportunity. We believe in the British people’s fortitude and endurance,” he said.
As the UK enters what it categorises as the second phase in its COVID-19 recovery with the lockdown measures being eased up, Sunak’s new so-called “plan for jobs” is designed to support jobs by focussing on skills; create jobs with investment in “shovel-ready” projects; and protect jobs through a VAT cut for the hospitality sector.
The rate on most tourism and hospitality-related activities will be cut from 20 per cent to 5 per cent, which is expected to save households around 160 pounds per year on average. For the sector, he has also unveiled a “landmark” Eat Out to Help Out discount scheme to encourage diners to go back into restaurants and hotels.
It will provide a 50 per cent reduction for sit-down meals in cafes, restaurants and pubs across the UK from Monday to Wednesday every week throughout August 2020. Together with the VAT cut and this scheme, he hopes to support over 2.4 million staff at over 150,000 businesses, helping them recover and reopen after the COVID-19 lockdown.
“This will give these businesses the confidence to maintain their staff, as more people get through the door and business activity kick-starts again,” he said. The minister said that following this second phase focusing on jobs, there will be a third phase focusing on rebuilding, with a Budget and Spending Review in the autumn – in a few months’ time.
The Job Retention Bonus, or a kind of reverse furlough, will be introduced to help firms keep workers who had been put on forced leave under the government-backed Coronavirus Job Retention Scheme, which is to be wound down in the coming weeks. Under the new scheme, UK employers will receive a one-off bonus of 1,000 pounds for each furloughed employee who is still employed as of 31 January 2021. The new Kickstart Scheme will be aimed at those aged 16-24, claiming Universal Credit and at risk of long-term unemployment. Funding available for each six-month job placement will cover 100 per cent of the National Minimum Wage for 25 hours a week – and employers will be able to top this wage up.
The UK Treasury department said a total of 1.6 billion pounds will be invested in scaling up employment support schemes, training and apprenticeships to help people looking for a job to benefit young people. The new plan will also create jobs through bringing forward work on 8.8-billion pound of new infrastructure, decarbonisation and maintenance projects. As part of this package homeowners and landlords in England will be able to apply for vouchers from a 2 billion pound Green Homes Grant scheme this year to pay for green improvements such as loft, wall and floor insulation that could save some households hundreds of pounds a year on their energy bills while creating thousands of jobs for tradespeople.
Besides, a 1-billion pound programme will make public buildings, including schools and hospitals, greener, helping the country meet its ambitions of achieving Net Zero by 2050, whilst investing in our future prosperity. In a stamp duty holiday to boost the housing sector, there will be a temporary hike in the exemption band from 125,000 pounds to 500,000 pounds until 31 March 2021, aimed at boosting the housing market and helping people getting on or moving up the property ladder.
