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Summer statement

Sunak unveils £2bn jobs plan for young workers

Rishi Sunak

Rishi Sunak: will reveal new measures

Young people are to be offered government-backed placements with employers to help avoid losing a generation to unemployment.

The £2 billion Kickstart Scheme is part of the UK government’s Plan for Jobs and will help firms create and support opportunities for 300,000 16-24 year olds who are claiming universal credit.

The Treasury will pay them the National Minimum Wage for 25 hours a week for up to six months – and employers will be able to top up their pay.

Applications for the scheme will open next month, when the furlough scheme begins to be phased out, for placements beginning in the autumn and lasting into 2021.

It has been announced ahead of Chancellor Rishi Sunak’s summer “mini-budget” which is expected to deliver a wide range of measures including a cut in VAT for the hospitality industry and in tax to help the property market. This is likely to include a temporary cut in the stamp duty threshold in England and Northern Ireland from £125,000 to between £300,000 and £500,000. Scotland and Wales have their own property transaction taxes.

The Treasury said that Mr Sunak will announce a £3bn green investment package and is reportedly mulling a suggestion from the Resolution Foundation that would give people £500 vouchers for use in badly-hit sectors.

Scotland, Wales and Northern Ireland are calling for a relaxation of fiscal rules to allow them to borrow more to tackle the unusual challenges thrown up by the coronavirus.

A bigger budget will follow in the autumn.

Prime Minister Boris Johnson last week announced £5bn of infrastructure spending, saying the UK will “build, build, build” its way out of the slump.

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CBI director general Dame Carolyn Fairbairn described the Kickstart scheme as a “down payment in young people’s future”.

She said: “By investing in skills, the Government can lessen the potential scarring impact of the pandemic for the next generation.

“Business and Government must now work to deliver the Kickstart Scheme simply and at speed. There can be no time lost in preparing young people who are entering one of the toughest jobs markets we’ve seen in decades.”

A focus on jobs is absolutely essential to lift the country out of the economic hardship caused by the Covid crisis.

– Mike Cherry, FSB

British Chambers of Commerce co-executive director Claire Walker said: “This announcement must form part of a wider plan to boost business confidence and protect livelihoods as we restart, rebuild and renew the UK economy.”

Mike Cherry, national chairman of the Federation of Small Businesses, said: “A focus on jobs is absolutely essential to lift the country out of the economic hardship caused by the Covid crisis.

“It has been worrying to see the rising number of young people out of work, and with 700,000 16-24 year olds due to join the labour market this summer this needs a major intervention to prevent a generation lost to long-term unemployment.

“More than nine-in-ten apprenticeships in small businesses are held by 16-to-24 year olds. We hope to see more support for apprenticeships announced as part of the government’s rescue package.

“Alongside the traineeships funding announced earlier this week, this should make a real difference.

Anneliese Dodds, Labour’s Shadow Chancellor, said welcomed the scheme, saying it is based on Labour’s Future Jobs Fund model and should help many young people to access work. 

But she called on the government to help older people who become unemployed, and those living in particularly hard-hit areas, will also need tailored support. 

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