08 July 2020
In today’s Summer Economic Statement, Chancellor Rishi Sunak delivered his plans for an economic recovery from the COVID-19 pandemic. This includes a package of measures to protect and support jobs across the UK.
The Chancellor announced that the Coronavirus Job Retention Scheme (CJRS), which has reportedly been used to pay 80% of the wages of 9 million employees, cannot continue beyond October 2020. He proceeded to explain other initiatives intended to encourage UK businesses to retain furloughed employees.
Job Retention Bonus
As an incentive, the Government will introduce a one-off payment of £1,000 for every furloughed employee who remains continuously employed until the end of January 2021. The first payments are expected to be made from February 2021 and, if every furloughed employee is brought back to work, will be at a cost to the government of £9 billion.
To qualify, employees must earn on average more than £520 per month (the National Insurance Lower Earnings Limit) between the date on which the CJRS ends and 31 January 2021.
Further details on the Job Retention Bonus Scheme should be available at the end of this month, and we will provide further updates as soon as we have more information.
Kickstart Scheme
In supporting jobs, the Government will launch a new Kickstart Scheme; a £2 billion fund aimed at creating hundreds of thousands of new, fully subsidised jobs for young people who are at risk of long-term unemployment.
The funding will be available for each six-month placement of 16 to 24 year olds who are claiming Universal Credit, and it will cover 100% of the National Minimum Wage for 25 hours a week (including employer National Insurance Contributions and employer minimum auto enrolment pension contributions).
£16 billion support package
Additional support will be available to help young people obtain the skills required to get into work through a number of initiatives, including an expansion of existing apprenticeship provisions and funding to triple the scale of traineeships and sector-based work academy placements.
The package will include, amongst other things, £2,000 for each new apprentice that a business hires under the age of 25, and £111 million investment to triple the scale of traineeships in 2020/21.
Further information will be provided in our full summary of today’s announcements, which will be live on our site tomorrow. Alternatively, you can sign-up to receive our Budget publications using this form and receive an emailed copy to your inbox tomorrow morning.
