News | Published July 08 2020

Chancellor’s £2 billion “kickstart scheme” to be set out on Wednesday

Chancellor Rishi Sunak is poised to present his £2 billion “kickstart scheme” which is intended to guarantee more jobs for young people.

Individuals aged 16-24 currently on Universal Credit are at real risk of facing long-term unemployment. The scheme aims to provide a way out by subsidising six-month work placements for such people.

Between March and May alone, in the early months of the Covid-19 lockdown, the number of Universal Credit claimants ages 24 and under increased by 250,000 to just under 500,000 overall.

For each job under the kickstart scheme, the government will cover the cost of 25 hours’ work a week at National Minimum Wage level, with employers able to pay more on top at their discretion.

The government has said that the plans will provide youngsters with an “opportunity to build their skills in the workplace, and to gain experience that will improve their chances of going on to find long-term sustainable work".

Applications for kickstart jobs will begin in August with jobs starting in the autumn and generally running to December 2021, although there will be an extension option.

England, Scotland and Wales will be covered by the kickstart scheme, with separate funding going to Northern Ireland for a similar initiative.

In his statement, Sunak will say: "We also know that youth unemployment has a long-term impact on jobs and wages and we don't want to see that happen to this generation."

Among a raft of measures, Sunak is also expected to bring in a stamp duty break, which will exempt the first £500,000 of all property sales in an effort to reinvigorate the property market.

Sunak has already pledged to include a number of schemes under the plans to be announced on Wednesday, including a £3 billion fund for green home improvements, 30,000 new traineeships, a £1.57 billion support package for the arts and heritage sectors, and extra investment in careers advisers, work academies and an increase in frontline job centre staff.

Sunak’s statement is set to be made at around 12:30 BST on Wednesday, following Prime Minister’s Questions in the House of Commons.

The speech follows in from the prime minister’s “project speed” announcement made last week.

Labour reacted warmly to news of the scheme but criticised the government for failing to “rise to the scale of the unemployment crisis".

Meanwhile, the devolved administrations in Scotland, Wales and Northern Ireland are pushing for an easing of fiscal rules to enable additional borrowing and the capacity to spend unused capital funds to boost the economic recovery.

Labour shadow chancellor Anneliese Dodds has said that the kickstart scheme should “help many young people to access work” but believes the government is still falling short.

Dodds has already been vocal in calling for an extension to the furlough scheme beyond October, as well as an extension to initiatives for the self-employed.

She has also called for the government to ditch a “one size fits all approach” and introduce tailored support for people and businesses who are still feeling the effects of the pandemic and are not ready to resume normality from October.

The SNP has echoed Dodds’ calls for the furlough scheme to be extended, while acting Lib Dem leader Sir Ed Davey has labelled the support in place “just not good enough”.

Trades Union Congress general secretary Frances O’Grady was supportive of the scheme but stressed that unions would “check the small print” to ensure every role paves a way to long-term employment.

Director-general of the CBI, Dame Carolyn Fairbairn, welcomed the positive impact of the scheme on young people, but warned that it must be delivered “simply and at speed”.

Dame Carolyn said: “There can be no time lost in preparing young people who are entering one of the toughest jobs markets we've seen in decades."

Meanwhile, Mike Cherry, national chair of the Federation of Small Businesses, wants the government to ensure the initiative will benefit SMEs.

Cherry said: “Small businesses must not be left waiting in line behind big corporates when they could get people to work now."

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Authored by

Alexander Bridge-Wilkinson
Junior Editor
July 08 2020

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