Chancellor of the Exchequer, Rishi Sunak, has outlines his plans to help ‘protect, support and create’ jobs in his Summer Economic update today.
Here are the main initiatives:
- A Job Retention Bonus to help businesses keep on their furloughed workers. UK employers will receive a one-off bonus of £1,000 for each furloughed employee who is still employed as of 31 January 2021. However, employees must earn above the Lower Earnings Limit (£520 per month) on average between the end of the Coronavirus Job Retention Scheme and the end of January 2021. Payments will be made from February 2021, and full details about the scheme will be announced by the end of July.
- A new Kickstart Scheme has also be launched to 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 for these six-month work placements will cover 100% of the relevant NMW for 25 hours a week, plus associated employer NIC and employer minimum automatic enrolment contributions.
- Provision of an additional £111 million this year for traineeships in England, to fund high quality placements and training for 16-24 year olds. For the first time ever, the government will fund employers who provide trainees with work experience, at the rate of £1,000 per trainee. The government plans to improve provision and expand eligibility for traineeships to those with Level 3 qualifications and below.
- Businesses in England will be given £2,000 for each new apprentice they hire under the age of 25. There will also be a £1,500 payment for each new apprentice they hire aged 25 and over, from 1 August 2020 to 31 January 2021. This is in addition to the existing £1,000 payment the government already provides for new 16-18-year-old apprentices and those aged under 25 with an Education, Health and Care Plan.
- Provision of £101 million for the 2020-21 academic year to give all 18-19-year olds in England the opportunity to study targeted high value Level 2 and 3 courses when there are not employment opportunities available to them.
- As part of a green investment drive homeowners and landlords in England will be able to apply for vouchers from a £2 billion Green Homes Grant scheme this year to pay for green improvements such as loft, wall and floor insulation.
- The rate of VAT applied on most tourism and hospitality-related activities will be cut from 20% to 5%, from 15 July 2020 to 12 January 2021. This should save £160 a year on average and together with the Eat Out to Help Out Scheme, aims to support over 2.4 million staff and over 150,000 businesses. The Eat Out scheme will entitle every diner to a 50% discount of up to £10 per head on their meals, at any participating restaurant, café, pub, or other eligible food service businesses. The discount can be used unlimited times and will be valid Monday to Wednesday on any eat-in meal (including on non-alcoholic drinks) for the entire month of August 2020 across the UK.
- Introduction of a temporary increase to the Nil Rate Band of Residential SDLT (Stamp Duty) from £125,000 to £500,000 until 31 March 2021. This will apply from 8 July 2020 until 31 March 2021.
