“Stand by workers and we’ll stand by you” - Chancellor announces furlough bonus scheme and more in Summer Statement
Whilst working from home, my daily TV schedule consists of tons of Judge Judy, border patrol programmes and Can’t Pay Take It Away (great show). But yesterday, like many others, I was glued to the live stream from the House of Commons as Chancellor Rishi Sunak unveiled a plethora of announcements that are aimed at stimulating the festering sore that is the UK economy after a global pandemic and nationwide lockdown.
And let me tell you, it’s a lot. Rishi has clearly been listening and a lot of his rhetoric and policy announced in the Summer Statement addressed those whose jobs and futures have been affected the most, in particular young people (16-24) and the hospitality sector. Unemployment rates and redundancies are on the rise with the tapering off of the Coronavirus Job Retention Scheme and these measures are to try and help employees stay in work and help employers to enable them to do so, with the Chancellor stating: “stand by workers and we’ll stand by you”.
So what’s been announced? While there was an abundance of big news, such as the temporary writing off of stamp duty under £500,000 and a £2bn “green homes grants” to make more homes energy efficient, in this blog I will focus mainly on the points that apply to employees and employers.
- The first major announcement, following on from the Job Retention Scheme which was a lifeline for millions of people in the UK, the next phase is the Job Retention Bonus Scheme. This bonus of £1,000 will be given to an employer for each member of staff they bring back from furlough. To stop people taking the mick and chancing their arm, the employee must be employed from once they’re taken back to at least January 2021 of next year. The employee must also be earning at least £535 per month for this period.
- A kickstart scheme was then unveiled with the aim to, you guessed it, kickstart job creation for young people as under 25s are 2.5 times more likely to suffer job loss as a result of Covid-19. The government has pledged £2bn to fund hundreds of thousands of jobs for 16-25 year olds whereby they will pay the wages of new, young employees for 6 months. There is no cap on the number of young people that can be hired under this scheme.
- To boost apprenticeships, which have a 91% successful retention rate, businesses who create positions for new apprentices will be given a bonus of £2,000 for each apprentice under the age of 25 and £1,500 for those over 25. The bonus scheme is available for employees who apply between August 2020 and January 2021.
- Work coach numbers positions in Job Centres will be doubled and guidance counsellor positions will be boosted also with the aim of helping people find jobs.
- To help the hospitality sector, a temporary cut to VAT on food, accommodation and attractions has been announced that cuts VAT from 20% to 5%.
- The Chancellor also announced the introduction of “eat out to help out” vouchers that give diners 50% off their meals out from Mondays to Wednesday with a maximum discount of £10 per person for the month of August only.
So there you have it. While these measures are most welcome and certainly very creative (Rishi gets an A for effort) there are still major concerns not being addressed and it feels a little like putting a plaster on an arrow wound as the economy slowly bleeds out. We need this sort of energy not just now, but for the next couple of years as we come to terms with all of this. So personally, I will take my butt to a half-price meal and enjoy every bite whilst I silently reserve judgement on it all and wait to see what happens.