Chancellor Rishi Sunak introduced The Budget today with an additional £65 billion that looks to provide support for jobs and businesses as the UK emerges from the pandemic and is left reeling in the economic fallout. The Chancellor set out a three point plan;
- To support people, their families and businesses through the pandemic
- To outline a investment-led recovery as UK emerges from lockdown
- To look to the future of public finances and what taxes will look like
You can find the full budget using this link.
What Are The Main Announcement?
- The Coronavirus Job Retention Scheme (CJRS) has been extended until the end of September; Government will cover 80% of employees’ wages. Employers to be asked to contribute 10% in July and 20% in August and September.
- The Self-Employment Income Support Scheme (SEISS) has also been extended until September and the fourth grant is available from April. A fifth grant will cover May/June/July. Those who became self-employed in the 2019/20 tax year are now eligible for both new grants.
- The £20 weekly uplift in Universal Credit (worth £1,040 a year) has been extended for another six months until September. While those receiving Working Tax Credit will get £500 one-off payment.
- The National Minimum Wage (now called the National Living Wage) will increase to £8.91 an hour from April 2021.
- A Skills Package:
- The incentive to hire an apprentice will be doubled to £3000, applying to all ages. The additional £1000 for young people and those on a EHCP plan will remain in place.
- £126 million for Traineeships, looking to hire an additional 40,000 16-24 year olds.
- £19 million for Domestic Violence Programmes.
- There is additional funding for arts, culture, media and sports as the country reopens. A series of tax breaks for businesses and support for struggling sectors in the form of tax breaks and cuts was also announced.
Our Commentary
This last year has been incredibly difficult for everyone, whether that be from a health, economic or social perspective. It has been an unprecedented year that has seen young people hit the hardest in terms of the huge impacts on their education, their diminishing employment levels and future employment prospects, and missed time socialising with their peers. Young people account for three fifths of the loss of employment since the beginning of the pandemic, they are also most likely to be working in shut-down sectors and as such to be on furlough (CJRS).
We welcome the extension of the CJRS as a means of avoiding a cliff edge and providing support for people and businesses beyond the ‘reopening’ of the UK; this has been a lifeline for many people and has been crucial in reducing the impact on the labour market. However, we know that many young people are furloughed and we could see a rise in youth unemployment once that comes to an end.
The initiatives such as the Plan for Jobs and the CRJS scheme showed that the government understood the challenges facing young people and were prepared to invest and initiate new policies to support them. But there was still opportunity and need to go further, particularly to ensure that no young person was left behind and the budget today feels as though it has fallen short.
We would have liked to see Kickstart extended further due to various Covid-related social distancing measures and lockdowns hindering the programme’s uptake. In addition to an extension, the eligibility criteria needs to be widened to capture those who have spent 6 months or more not in employment, education or training (NEET).
This is a missed opportunity for the Government to safeguard the immediate future of our young people. The Government has much more to do to ensure that the youth unemployment rate does not continue to rise steadily, which could leave us with a cohort of young people long-term unemployed. In particular, we are concerned about the most disadvantaged, those with protected characteristics, those from ethnic minorities backgrounds and those with disabilities being left furthest behind in this recovery plan.
