Chancellor of the Exchequer Rishi Sunak put job retention and creation front and centre of his £30 billion COVID-19 “mini budget” – prioritising hospitality, tourism and housing with fiscal stimulation measures.
The UK’s automotive sector was left waiting on news of a plan to stimulate its recovery, with no mention of a new car scrappage scheme or VAT cut for car buyers in Sunak's lunch time speech in the House of Commons today (July 8).
But car retailers who bring staff back from the Government’s Coronavirus Job Retention Scheme (CJRS) and retain them on a wage of over £520-month-until January will receive a grant of £1,000-per-employee as plan to boost job retention across the UK.
Sunak’s plans also include funding of six months wages for new jobs created for 16- to 24-year-olds at risk of long-term unemployment, as Sunak insisted “This generation cannot be lost.”
A VAT cut is part of the Government's recovery plans, but the rate reduction from 20% to 5% until mid-January has been restricted to the hospitality and tourism sectors as part of his plans to boost the fortunes of the 1.8 million employees of staff in those hard-hit sectors.
His efforts to re-start consumer spending, meanwhile, were preserved for a 50% government-funded discount on eating out (Monday and Wednesday) to boost cafes and restaurants, in an “eat out to help out” scheme, and the removal of stamp duty on house purchases up to £500,000 until March 31, 2021.
Commending his proposals to the House of Commons this lunch time, Sunak said: “We will not be defined by this crisis, but our response to it.”
Apprenticeships also receieved a funding boost as part of Sunak's plans to create jobs and improve the employment prospects of the younger generation.
For the next six months, he said, Government will pay businesses to hire young apprentices with a new payment of £2,000 per apprentice.
It will also introduce a brand new bonus for businesses to hire apprentices aged 25 and over with a payment of £1,500.
A £111m investment will also aim to triple the scale of traineeships in 2020/21, as businesses receive £1,000 for every trainee they offer a work placement to.
Sunak added: "To support 18 to 19 year-olds leaving school or college to find work in high-demand sectors like engineering, construction and social care, we'll provide £100m to create more places on level 2 and 3 courses."
Funding was also pledged to help deliver careers advice to a quarter of a million more young people, with £17m of funding for sector-based work academy placements in 2020-21.
Sunak said: "The evidence says careers advice works, so we will fund it."
National Franchised Dealers Association (NFDA) director, Sue Robinson, said: “It is positive that following the support provided to employers through the Job Retention Scheme, the Government has committed to continuing to help employers retain their workforce and create new roles.
“In particular, the automotive industry has invested heavily in attracting young people to the sector and providing them with unique training and development opportunities. We must minimise the impact of the current crisis and ensure it does not undermine the efforts our sector has been making to invest in its future workforce.
“Although the Chancellor did not announce any specific measure targeting the automotive sector, it is important that we continue to monitor how consumers and automotive businesses perform over the coming months to be ready to act and support the industry if and when required”.