Rishi Sunak unveils three-point coronavirus jobs recovery plan

DWP to get £1bn as part of plan to help people find jobs, create jobs and protect jobs
Rishi Sunak delivering his economic statement today. Photo: Parliament TV

The Department for Work and Pensions will get an £1bn boost from the Treasury as part of a multi-billion-pound plan to boost employment in the wake of the coronavirus crisis, Rishi Sunak has said.

The funding comes alongside a raft of direct subsidies to businesses and support for training that will help people back into work, the chancellor told MPs in the House of Commons today.

As the Treasury prepares to wind up the Coronavirus Job Retention Scheme in the autumn, Sunak said the government would kick off a three-point plan to support people to find jobs; create jobs; and protect jobs.

Supporting people to find jobs

The extra funding for DWP will enable the department to double the number of work coaches supporting people to find jobs to 27,000, as announced earlier this week, and to launch a new scheme to support people who are unemployed long term, he said.

“Millions of people are moving onto Universal Credit; they need urgent support to get back to work, Sunak said.

DWP would also increase its Flexible Support Fund and its work and health programme, as well as its rapid response service, which helps people who have been made redundant, the chancellor said. He said the funding would support “millions of people back to work”.

The government will also pay a series of grants directly to businesses that employ more people or bring existing employees back from furlough, Sunak said.

Sunak said it would be “in no one’s long-term interests” to continue the furlough scheme indefinitely, which he said would provide “false hope” to those people that will not have jobs to return to. 

To incentivise businesses to bring people back to work, he said the government would pay them a jobs retention bonus of £1,000 per employee brought back from the scheme who stays in their job until January. To qualify, employee must be paid an average of at least £520 a month from November to January, equivalent to the lower earnings limit for National Insurance.

There is no cap on the scheme, which means the policy could be worth up to £9bn if every employee who has been on furlough returns to their job.

“Our message to business is clear: if you stand by your workers, we will stand by you,” Sunak said.

The jobs plan also includes the Kickstart Scheme announced announced this morning, which will directly pay employers that take on extra 16-to-24-year-olds at risk of unemployment.

The scheme will directly pay the wages of young people paid at least the National Minimum Wage for at least 25 hours per week, as well as an extra fee to cover overheads, Sunak said.. Employers will be able to top this wage, and must provide training to qualify.

And Sunak also confirmed plans to triple the number of traineeships on offer. The £111m investment include offering a £1,000 bonus to take on new trainees.

Meanwhile, the chancellor said extra funding would go to the National Careers Service to provide “enough new careers advisers” to support 250,000 young people to find jobs.

And the Treasury will also provide direct support for apprenticeships, he said. It will pay businesses £2,500 per apprentice they take on, with an extra bonus payment of £1,500 for those that hire over-25s as apprentices.

Creating jobs

The economic statement also included the £2bn Green Homes Grant trailed earlier today.

The grant will enable homeowners and landlords to apply for vouchers to subsidise work to make homes more energy efficient – covering up to two-thirds of the cost of works, up to £5,000, or the entire cost of work for low-income households, up to £10,000.

The measures are expected to make more than 650,000 homes more efficient and support 140,000 green jobs, he said.

And he also announced a stamp-duty cut “to catalyse the housing market and build confidence”. The cut comes into effect immediately for houses up to £500,000, and will last until 31 March 2021, he said.

Protecting jobs

The chancellor also announced a VAT cut and subsidy to support pubs, restaurants, cinemas and other businesses in the hospitality and entertainment sectors – some of the hardest hit during the Covid-19 pandemic.

In what he described as a “£4.5bn catalyst” for the sectors, Sunak said the Treasury would cut VAT on food, accommodation and attractions in the hospitality sector from 20% to 5% for six months.

And the government would also subsidise what Sunak called an “eat out to help out” discount to encourage them to spend money with those businesses. Customers will be given a 50% discount, up to 50%, up to £10, on any meal eaten from Monday to Wednesday at a participating restaurant, he said.

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