Rishi Sunak has delivered his Plan for Jobs Statement and announced measures to protect, support and maintain jobs across the UK.
Job retention and creation was at the heart of the statement with the Chancellor announcing that:
- UK employers will receive a one-off bonus of £1,000 for each furloughed employee who is still employed as of 31 January 2021.
- For the next six months businesses will be paid £2000 to hire young apprentices and a payment of £1500 to hire apprentices aged 25 and over.
- A Kickstarter scheme will be introduced to directly pay employers to create new jobs for any 16-24 year olds at risk of long term unemployment.
- Employers will be paid £1000 to take on trainees
- VAT will be reduced to 5% for good and services supplied by the tourism and hospitality sector.
- The introduction of ‘Eat out to help out’ – 50% off sit down meals and non-alcoholic drinks Monday to Wednesday, up to £10 a head.
- The threshold for paying Stamp Duty will be increased to £500,000.
On the whole this was a positive Plan for Jobs Statement, giving a much needed shot in the arm for socially led businesses, and it is refreshing to see the treasury and government departments presenting a strong, joined up approach, seemingly driven by Rishi Sunak who continues to show himself to be an impressive Chancellor.
While the announcements today were positive for SMEs and businesses as a whole, particularly the furlough incentive, the government and the treasury need to keep up the momentum and now concentrate on releasing a very clear plan in the Autumn statement which clarifies concerns that businesses owners currently have. There is certainly a sense of nervousness in the business community at the moment on how this will be paid for, and until there is clarity on this there will be a reticence to commit to hiring more staff through the schemes announced this morning.
VAT reduction to 5% to boost the hospitality and tourism industry, along with the introduction of the £10 ‘eat out to help out’ discount during August to help hospitality sector is as much about the psychology of empowering people to get out and start spending as it is about the financial injection.
Similarly, help to get 16-24 year olds into the workplace through support of apprenticeships schemes and placement funding to create new jobs is positive from a psychological perspective – it will get these young people into the work place, understanding how you act in a professional environment and breaking down the barriers to getting back to work from a mindset and self-worth perspective
Reducing stamp duty and getting money moving through the property supply chain is one of the single most effective ways of kick starting the economy, having moved house myself during lockdown I’m struggling to think of a tradesman I haven’t needed.
The mechanics of accounting for the VAT changes, and administering and accessing the wider initiatives will, as with the earlier Covid support measures, take some trial and error – let’s hope lessons have been learnt from those experiences.
This Plan for Jobs Statement is the result of a recession which is demand led, rather than financially led as we have seen in the past, and therefore we simply need to keep people in jobs so they can spend money. This statement goes a long way to getting people back to work and spending and we look forward to a robust Autumn budget announcement which outlines medium term commitments rather than short term incentives.
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