£2bn to pay the wages of youngsters taken off dole
TODAY’S mini-Budget will see the Chancellor put jobs at the heart of his £2billion scheme to prevent a surge in youth unemployment.
Rishi Sunak will unveil a radical plan designed to keep up to 300,000 young people off the dole as the Covid-19 recession bites.
The Kickstart initiative will see the Treasury pay the wages of thousands of youngsters if firms agree to hire them for six months.
Businesses will have to agree to provide an element of training and ministers hope that some of the youngsters will be kept on at the end of their stint. In return, firms will receive what Treasury sources acknowledged amounts to ‘free labour’.
The scheme is the centrepiece in a financial statement that will focus on jobs.
But No10 moved to allay tax rise fears by saying the Government would stick to its manifesto commitment for a ‘triple lock’, meaning no increases in the headline rates of income tax, national insurance and VAT before the election.
Ministers fear the lockdown will spark redundancies and last night the Chancellor 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.
‘So we’ve got a bold plan to protect, support and create jobs.’
Today’s mini-Budget is designed to steady the economy as it emerges from lockdown.
There will be no attempt to balance the books, which have been plunged deep into the red by the pandemic. Mr Sunak is not even expected to publish a forecast for the public finances, which economists fear could show a budget deficit of more than £300billion – twice the level seen at the height of the 2008 financial crisis.
Instead, the Chancellor will focus on a package of spending measures and tax cuts designed to prop up jobs and spark an economic recovery.
But yesterday there were signs that Mr
Sunak’s big-spending instincts are alarming some Tories. Sir Edward Leigh, a former chairman of the Common public accounts committee, told Mr Sunak he wanted to hear ‘less about high-spending lefties like President Roosevelt and more about good Conservatives like Margaret Thatcher’.
In a separate report, six former No 10 advisers called for ‘sweeping reform’ of the tax system and warned excessive government debt could halt recovery.
The Kickstart scheme, which will run until at least the end of 2021, is to be open to people aged 16 to 24 who are claiming Universal Credit. They will receive the minimum wage, paid by the state, to work 25 hours a week. Their employers’ national insurance and pension contributions will also be paid.
And firms will receive an ‘administration fee’ of around £1,000 per employee for arranging the placement.
It will start getting under way next month, with the first placements expected to begin in the autumn. A number of large employers, including BT and Sainsbury’s, have already signed up.
A Treasury source said business had a ‘moral responsibility’ to do what it could to help youngsters avoid unemployment.
The scheme is likely to revive memories of the Youth Opportunities Programme and its successor Youth Training Scheme in the 1980s, which critics said were used as dumping grounds to keep unemployment down.
But Treasury sources last night insisted that businesses would be expected to offer ‘good quality’ training to those they decide to take on. Mr Sunak is also expected to expand the apprenticeships programme, where more dedicated training is expected.
The British Chambers of Commerce last night welcomed the Kickstart scheme, saying firms were ‘ready to work with government’ in order to help youngsters entering the world of work at this ‘challenging time’.
‘Bold plan to protect and create jobs’