Chancellor of the Exchequer, Rishi Sunak, is to announce a £2 billion “Kickstarter scheme” which will create “hundreds of thousands” of jobs for young people later today (08/07/20) in his summer statement.
There is a fear that over a million young people (18-24) will be unemployed by the end of the year, due to the COVID-19 pandemic, according to the think tank, Institute for Public Policy Research (IPPR).
The aim of this fund is to subsidise six-month work placements for 16-24-year-olds on Universal Credit. This move is to be part of a three-point plan for UK jobs, which will be very young persons focused.
The Treasury said:
The “Kickstart scheme” would be part of a “three-point plan for jobs… to help Britain bounce back from coronavirus”.
The Confederation of British Industry (CBI) and unions believes the scheme is a step in the right direction, assisting young people.
Dame Carolyn Fairbairn, director-general of the CBI, said:
This move lessens the potential scarring impact of the pandemic for the next generation.
The Government needs to work to deliver the Kickstarter scheme simply and at speed.
The Chancellor has already announced that the Government will give employers £1,000 for each young person they offer a traineeship. Mr Sunak will pledge 30,000 new traineeships which will provide young people with maths, English and CV writing skills as well as 90 hours of unpaid work experience.
However, employers are also hoping to hear further clarification relating to the furlough scheme.
Stephen Ratcliffe, partner at Baker Mckenzie a multinational law firm said:
I think I speak for many employers in hoping for further clarification of the furlough scheme, particularly confirmation that the grants can be used during periods of notice, as well as possibly an extension to the scheme itself. The early suggestions that there will be a £1,000 grant to those taking on trainees is also welcome, provided it can be achieved by a simple and speedy claims mechanism.
If I were to be granted a further wish, it would be for an increase in funding for the courts, and for employment tribunals in particular. If the predicted wave of redundancies should occur, it runs the risk of swamping an employment tribunal system which is already struggling with lengthy delays.
While the chancellor will announce a number of great initiatives for young people, I would like to see him go one step further and provide assistance for anyone wanting to start their own business.
Small businesses are the engine room of the economy. They employ 60% of the UK population. It’s easy to start a business, but much harder to run it well enough to keep it growing. Therefore, I would like to see free online courses that guide entrepreneurs through the process of starting and running a company over a 12 month period.
It should cover the basics; cash flow, marketing and pricing. On successful completion of this course, the budding entrepreneur should then be paid a monthly fee (say £1k per month) for the first 12 months. This will mean they have less financial pressure in the early part of the business – which is the most challenging. That £12k investment in the business could be reaped many times over by HMRC, and there will be considerably more people with an incentive to ensure the economy grows year on year.