The Chancellor today outlined his plans for the UK’s recovery from the Covid-19 pandemic, including significant investment in young people for skills training, traineeships and apprentice posts.
Rishi Sunak said the government’s plan will “protect, support and create jobs” with investment of more than £100m in Level 2 and 3 courses to boost skills for 18-19 year-olds, whose futures have been put most at risk by the pandemic.
Marco Forgione, director general of the IOE&IT, said he hoped the training fund could be used for upskilling in courses relating to international trade:
“We welcome the Chancellor’s measures on job creation, outlined today, and in particular the £101m fund for Level 2 and 3 courses,” he said.
“The Institute’s own courses and those offered by the UK Customs Academy include Levels 2 and 3. We would hope these qualify as – in the government's terms – ‘high value courses’ eligible for this new grant.
"Such an outcome would be extremely well timed given the urgent need for skills in customs and international trade as the UK’s transitions from the EU at the end of this year.
“In the coming days we will be seeking clarification on this.”
The Chancellor also announced measures to boost the hospitality sector by lowering VAT for “food, drink and attractions” to 5% and by providing an unprecedented “eat out to help out” discount for consumers in August.
Below are some key takeaways from the statement.
1. Kickstarting youth jobs
The Chancellor announced a £2bn ‘Kickstarter Scheme’ to prevent unemployment becoming rife among 16-24-year-olds.
Through this job creation fund government will create “hundreds of thousands” of six-month work placements, covering 100% of the minimum wage for each placement for 25 hours a week.
2. Investment in Levels 2 and 3 courses
The government will triple the number of traineeships in England, paying employees £1,000 for each trainee they take on.
The Chancellor also announced over £100 million in funding to increase the number of 18-19 year-olds taking Level 2 and Level 3 courses.
A policy paper presented to parliament accompanying the statement clarifies:
“The government will provide £101 million for the 2020-21 academic year to give all 18-19 year-olds in England the opportunity to study targeted high value Level 2 and 3 courses when there are not employment opportunities available to them.”
3. Funding apprenticeships
The government will introduce a new payment of £2,000 to employers in England for each apprentice they hire under the age of 25, and a £1,500 for apprenticeships aged over 25.
The fund will be in place from 1 August till 31 January next year and will be in addition to the £1,000 the government already provides for 16-18 year-olds.
4. Job retention bonus
Although the Chancellor confirmed the furlough scheme will be wound down by October, he introduced a new ‘job retention bonus’ scheme to reward employers who keep on staff.
He said that if staff bring back and continually employ furloughed staff through to January next year, they will receive a £1,000 bonus.
However, the employee must be paid at least £520 per month between the end of the Coronavirus Job Retention Scheme and the end of January 2021.
5. Green recovery
The government hopes to ensure the recovery from the pandemic is ‘green’ through £3bn of investment in 100,000 green jobs and by improving home insulation.
This will include a £2bn voucher plan for homeowners to increase their energy efficiency by investing in insulation.
6. Stamp duty holiday
The government will temporarily lift the stamp duty tax threshold to encourage thousands of people to buy new homes in the coming months.
Stamp duty is a tax imposed on the purchasing of property. The property value at which the tax is charged has been raised to £500,000.
7. VAT cuts and ‘eat out discount’
The Chancellor has cut VAT for the hospitality sector from 20% to 5% to encourage consumer spending and reboot an industry which was put to a halt by the pandemic.
He also announced an ‘eat out to help out’ 50% discount for consumers on food at participating restaurants, cafes and pubs. The government will reimburse the food service providers up to £10 per head per meal on Mondays to Wednesdays throughout August.