Jenny Tooth OBE, CEO of UKBAA, comments on the Chancellor’s new £30bn jobs package
UKBAA welcomes the Chancellor’s £30bn package of measures to support jobs and boost employment, especially for young people and those in the sectors and geographies hardest hit by the pandemic. However, this must be more than just a short-term boost to jobs and consumer demand. We need to ensure that we can build skills and sustainable employment opportunities for young people in the areas that our economy needs to increase innovation, productivity and support long term growth.
The Chancellor Rishi Sunak’s detailed spending plans announced today aim to address what he called the “most urgent challenge we now face” as we recover from the impact of COVID-19 and felt that the “job has now only just begun to address the employment needs of all those affected during the past three months”.
Whilst recognising that the Job Retention Scheme had been a vital lifeline, he would not give false hope that all those furloughed could return, but wanted to give an opportunity to help as many as possible to get back to employment. In announcing his Jobs Retention Bonus, offering £9bn to encourage employers, he asked them to “stand by your workers- and we will stand by you. This offers employers £1,000 per employee retained, provided that £500 minimum monthly wage is paid to each worker. Sunak’s 3-point plan focuses on Support; Create and Protect jobs. Recognising that the under 25s are likely to be the hardest hit, he set out his plan for the new Kickstart scheme, offering employers £6,500 grant per new job created to cover 6 months paid work for 16-24 year olds, provided they work for 25 hours per week and receive additional training and support, pledging £2bn with no cap on the no of jobs created. He also set out plans for additional traineeships, offering £1,000 to employers to take on 18-19 year olds, with £2,000 to employers to take on new Apprenticeships, also offering £1,500 over 25 year old Apprentices, plus a further £1bn to support work coaches and support through DWP to help people back to work.
The Chancellor’s vision for Job Creation to complement the PM’s Build-Build-Build agenda, is heavily focused on the Green Economy, with £2bn put on the table to support grants for Green Homes creating jobs in energy efficiency , as well as for £1bn for creating energy efficient public sector housing. Whilst he identified the opportunity to boost employment in construction and housing through an already heralded cut in Stamp Duty capped at £500k for houses purchased from now through to 31 March 2021.
In terms of Job Protection, Sunak focused specifically on the hospitality and tourism sectors likely to be hit with the highest unemployment at around 2m and disproportionately affecting women, BAME and young people in tourism depended towns and regions. However, he did not announce any prolongation of the Furlough scheme for workers from these sectors, but instead announced two new measures to stimulate consumption offering a massive 15% cut in VAT from 20-5% on food, accommodation and attractions from next week to January. Feeling at his most creative, the Chancellor announced his new “eat out to help out” slogan, offering 50% discount on restaurant meals, up to £10 per person when consumed between Monday- Wednesday during August, the money being reclaimed and paid within 5 days to employers.
It’s an ambitious package, very heavily focused on ensuring the future of young people. However, we need to ensure that measures will also support skills and employment for the future and not reinforce existing sector challenges in our economy. We should not forget the opportunities to encourage and support entrepreneurship alongside measures to stimulate employment and jobs. We also hope that the £9bn job retention bonus will be sufficient to enable those businesses that have been heavily impacted by the crisis, to re-establish their workforce, or we will have a further wave of unemployment further down the line. The Chancellor’s approach to encourage consumer demand through VAT cuts and meal vouchers, rather than maintaining the furlough scheme for the hospitality and tourism sectors will hopefully pay off, although may be too short-lived to protect the most vulnerable employees. This £30bn package is a very important start, but we will need a sustained effort over the coming months to ensure we can build a future economy that addresses the imbalances in access to employment, skills and opportunities that already existed across the UK and that have been so clearly highlighted and exacerbated under COVID.