Chancellor of the Exchequer, Rishi Sunak, has unveiled his ‘Plan for Jobs’ in his summer economic update, which aims to help people and businesses in protecting, finding, and creating jobs.
The plan, which according to Mr. Sunak, aims to ‘give people everywhere the opportunity of a fresh start,’ is intended as the second of three stages, to the UK’s economic recovery, after the coronavirus lockdown saw the nation’s economy shrink by 25%.
The first phase was a £160 billion package launched in March that provided an additional £49bn in funding for vital public services, including the NHS and supported the Job Retention Scheme, which has so far seen more than 9 million people furloughed at the cost of roughly £27.4 billion.
Mr. Sunak has said that to continue this scheme for too long would give people a ‘false hope that it will always be possible to return to the jobs they had before,’ and so the scheme will be closed in October this year, with the government continuing to support it until then.
The Chancellor has encouraged businesses to retain their workers at this time and has offered a job retention bonus of £1000 for every employee still employed by the end of January 2021 and earning an average of £520 per month.
Another area that the plan focuses on is young people who are more likely to work in the sectors that have been worst hit by the pandemic. The government is putting £1.6bn towards supporting training schemes and apprenticeships for young individuals.
There will also be a kickstart scheme worth £2bn that will subsidize new jobs for people aged 16-24 by covering wages for 25 hours a week at minimum wage for up to six months, which employers will be able to apply for from August, with the aim to have people in work by the autumn.
In a further effort to aid employment, approximately £8.8 billion worth of construction and maintenance jobs will be established, which will create tens of thousands of new jobs in the development industry.
With more businesses in the UK getting ready to reopen, Mr. Sunak has tried to ensure those in the hospitality industry can do so with confidence. The Chancellor aims to achieve this feat by cutting the VAT for both tourism and hospitality-related businesses from 25% to 5% and starting the ‘Eat Out to Help Out’ scheme, which offers 50% off meals up to the value of £10 every Monday to Wednesday throughout August.
While the Chancellor has said this plan aims to “support and create jobs” and “give businesses the confidence to retain and hire,” some have questioned whether it provides value for taxpayers’ money.
Of particular concern is the dead weight the Chancellor has admitted will be part of the Job Retention Bonus scheme, given some businesses will claim for employees that were never at risk of losing their jobs. Bridget Phillipson, the Shadow Chief Secretary to the Treasury, said on Twitter, “It’s not brave to admit plans to waste billions at a time when many are crying out for support.”
Sir Keir Starmer, leader of the Labour Party, said the government is acting appropriately in what he described as ‘unprecedented times.’ However, Sir Starmer also criticized the plan, saying, “the action they’ve taken isn’t focused in the right places.”