Chancellor Rishi Sunak will announce a £ 2 billion “start-up program” on Wednesday to create more jobs for young people.
The fund will subsidize six-month work placements for people with universal credit aged 16 to 24 who are at risk of long-term unemployment.
The government has said it will create “hundreds of thousands of new government-subsidized jobs.”
The Labor party welcomed the move, but said the government had failed to “reach the depth of the unemployment crisis.”
This promise will be part of Mr. Sunak’s speech, alongside a £ 3 billion “green” fund and stimulates learning.
Stamp duty changes are also expected and VAT may be changed.
The Treasury said the “start-up program” would be part of a “three-point job plan … to help Britain recover from the coronavirus”.
The CBI welcomed the first part of the plan as “an essential deposit for the future of young people”.
The Chancellor’s statement is expected at 12:30 p.m. BST (11:30 GMT), after Boris Johnson meets with Sir Keir Starmer at questions from the Prime Minister.
Sunak said he would present an economic update last week after the Prime Minister announced his “new deal” to be built after the coronavirus epidemic.
The Chancellor has already described a number of measures in the implementation, including:
- Vouchers of up to £ 5,000 for energy retrofits as part of a wider £ 3 billion plan to cut emissions
- A commitment to provide 30,000 new internships for young people in England, giving companies £ 1,000 for each new place of work experience they offer
- £ 1.6 billion in loans and grants for the arts and heritage sector
The doubling of front-line staff in employment centers, as well as an additional £ 32 million for the recruitment of additional guidance counselors and £ 17 million for labor academies in England.
For each kickstarter job, the government will cover the cost of the national minimum wage – £ 4.55 for those under 18, £ 6.45 for 18-20 and £ 8.20 for 21-24 – for 25 hours per week, and employers will be able to complete the figure.
The government has said it will give young people “the opportunity to develop their skills at the workplace and gain experience that will improve their chances of finding long-term sustainable employment”.
The program will be open to applicants in August, the first jobs should start in the fall and continue until December 2021 – with the possibility of being extended.
It will cover England, Scotland and Wales, and the government has said it will provide additional funding to Northern Ireland for such a program.
The government is well aware that young workers are more exposed to the devastating economic impact of the coronavirus, and long-term unemployment for them inflicts long-term scars on the economy.
In some of the hardest hit sectors – such as retail, hospitality and leisure – one third of the workforce is between 16 and 24 years of age.
And these areas are fertile ground for young people to start their own business.
But these are also the sectors least likely to rebound quickly, which is why the Chancellor will announce her intention to find new jobs to replace the old ones generally occupied by young people.
It is estimated that the “start-up program” could result in the support of over 300,000 new jobs.
This could help offset the 500,000 job losses expected by the UK hotel industry this year, unless there is additional support for the sector.
The government could listen to pressure from industrial groups demanding targeted VAT reductions to boost confidence and profit margins in paralyzed sectors like the hotel and leisure industries.
What seems certain, however, is that the government will move from a mode of “protecting and surviving” for jobs of the past to trying to create the jobs of the future.
Almost 500,000 people aged 24 and under signed up for universal credit in May, 250,000 more than before the foreclosure began in March.
The Chancellor has already acknowledged that young people could be the most affected by the employment crisis, and also be the most dependent age group on the government leave scheme – which is scheduled to end in October.
Speaking in the House of Commons on Wednesday, Sunak is expected to say, “Young people are most affected by most economic crises, but are at particular risk this time as they work in disproportionately affected sectors. by the pandemic.
“We also know that youth unemployment has a long-term impact on jobs and wages and we don’t want that to happen for this generation.
“So we have a bold plan to protect, support and create jobs – a plan for jobs. “
Ghost Chancellor of Labor Anneliese Dodds said the program “should help many young people get into work”.
But she called on the government to expand the leave and freelance regimes, and create “tailored support” for the elderly or those living in hard-hit areas.
IWC Executive Director Dame Carolyn Fairbairn said the announcement could see the government “reduce the potential scar impact of the pandemic for the next generation.”
But she called on business and government to “work to implement the start-up program quickly and easily,” adding, “Don’t waste time preparing young people for entry into one of the markets.” most difficult jobs we have seen in decades. ”
The National President of the Federation of Small Businesses, Mike Cherry, said a focus on jobs was “absolutely essential to lift the country out of the economic woes caused by the Covid crisis.”
But he called on the government to ensure that small businesses can benefit from this program, adding: “Small businesses should not queue up behind large businesses when they can get people to work now.”