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by Alain Tolhurst
08 July 2020
UK Government to pay young people’s wages for six months


UK Government to pay young people’s wages for six months

The state will subsidise the creation of tens of thousands of jobs for young people hit by the coronavirus crisis under a three-point “Plan for Jobs” to be unveiled by Rishi Sunak on Wednesday.

The Chancellor will deliver a mini-Budget in the House of Commons and use it to focus on the young whose employment prospects have been hit hardest by the pandemic.

Statistics show young people are more likely to have been furloughed than older employees, and a quarter of a million more people aged under 25 have claimed unemployment benefits since March.

The measures will include a new £2bn 'Kickstart Scheme' to create hundreds of thousands of new jobs as the UK enters the next phase of recovery from the COVID-19 outbreak.

Sunak said: “Young people bear the brunt of most economic crises, but they are at particular risk this time because they work in the sectors disproportionately hit by the pandemic.

“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.

“So we’ve got a bold plan to protect, support and create jobs – a Plan for Jobs.”

The new scheme will see employers able to offer six-month work placements, paid for by the UK Government, for people aged between 16-24 who are claiming Universal Credit and at risk of long-term unemployment.

The Treasury will cover 100 per cent of the National Minimum Wage for 25 hours a week, with employers able to top up this wage.

Its aim is to give young people the opportunity to build their skills in the workplace ahead of finding a long-term role.

The Chancellor is also expected to announce a £111m investment to triple the number of traineeships, which are courses that include an in-work placement, in 2020-21.

And he is pledging an extra £32m for the existing National Careers Service to provide tailored jobs advice to a quarter of a million more young people.

There will also be £17m of funding to almost triple the number of work academy placements - used by employers to directly train people ready to work and on benefits - in 2020-21.

The Treasury said Wednesday's statement would mark the start of the second stage in the UK Government’s three-phase strategy to recover from coronavirus, after the first began in March with the furlough scheme and other support for businesses.

The third is expected to begin in the autumn when Sunak delivers a full Budget and comprehensive departmental spending review.

Responding to the announcement, Frances O'Grady, general secretary of the Trades Union Congress, said: “Unions have been pushing hard for a jobs guarantee for young workers who lose their jobs during this crisis.

“The Chancellor has made a good first step. But we'll be checking the small print to ensure every job provides proper training and a bridge to steady employment."

Kathleen Henehan of the Resolution Foundation think tank meanwhile said: "It is very welcome that the government has opted for a bold and ambitious scheme, with £2 billion potentially meaning jobs for around 350,000 young people.

"This is exactly the kind of approach needed, learning the lessons of what worked in the financial crisis.

“History also shows that it is crucial that these jobs are created quickly, with local authorities crucial in making that happen at anything like the scale the government intends.

“350,000 new jobs would be three times as many as were created under the Future Jobs Fund following the financial crisis, so delivery on this scale will be a huge challenge."

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