Rishi Sunak has revealed a range of measures designed to save jobs and boost the economy following the impact of the coronavirus pandemic.
The Chancellor has announced a new job retention bonus as part of its “A Plan for Jobs 2020”. On Wednesday 8th July, Rishi Sunak announced a £1,000 “job retention bonus” for employers that bring workers back from furlough. He told the House of Commons the bonus would apply to employees paid enough to reach the lower earnings limit for paying national insurance.
“If you’re an employer and you bring back someone who was furloughed – and continuously employ them through to the end of January – we’ll pay you a £1,000 bonus per employee,” the Chancellor told the Commons in an emergency statement on Wednesday afternoon.
“It’s vital people aren’t just returning for the sake of it – they need to be doing decent work. So, for businesses to get the bonus, the employee must be paid at least £520 on average, in each month from November to the end of January – the equivalent of the lower earnings limit in national insurance.”
Mr Sunak said the policy would cost £9 billion if all employers took full advantage of the scheme. The bonus will be paid from February 2021. Further details will be released in July.
He added: “Our message to business is clear: if you stand by your workers, we will stand by you.”
Sunak’s ‘summer statement’ also confirmed the Treasury’s plan to invest £2bn in a “kickstart scheme” of work placement support for young people aged between 16 and 24. Under this scheme, employers will be able to subsidise the wages of people aged 16-24 that are claiming Universal Credit and at risk of long-term unemployment.
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.
On the issue of apprentices, he said: “We’ll pay businesses to hire young apprentices, with a new payment of £2,000; And we’ll introduce a brand-new bonus for businesses to hire apprentices aged 25 and over, with a payment of £1,500.”
Key announcements from his statement include:
- The chancellor confirmed the furlough scheme will end in October
- A new Jobs Retention Bonus will be introduced for businesses to retain staff. They’ll be paid £1,000 for every furloughed employee they keep on up to January 2021
- A £2bn “kickstart” scheme to help create job placements for 16-24 year olds for six months
- VAT will be cut from 20% to 5% from 13 July to 12 January 2021 for some areas
- Food and non-alcoholic drinks in restaurants, pubs and cafes, will be covered as well as hot takeaway food
- Hotels, B&Bs, and theme park and cinemas will also benefit
- “Eat out to help out” scheme offers 50% discount for every diner, up to £10 a head, from Monday to Wednesday throughout August
The announcements are the latest labour market interventions unveiled by the government in a bid to get the economy moving again with the easing of the coronavirus lockdown.