Rishi Sunak unveils ‘jobs retention bonus’ to reward employers with £1k per staff member brought back from furlough
Rishi Sunak unveiled a new 'jobs retention bonus' in the Commons (PA)
The Chancellor has unveiled a new "jobs retention bonus" to incentivise employers to bring back staff from furlough.
Rishi Sunak said companies will receive £1,000 for every staff member retained as the Government seeks to prevent an unemployment crisis after the coronavirus pandemic.
Delivering his summer mini-Budget in the Commons, he said the message to firms is “if you stand by your workers, we will stand by you”.
Mr Sunak said with more than nine million people currently still part of the furlough scheme the new policy could cost the Treasury £9 billion.
He also unveiled an immediate stamp duty cut to kickstart the faltering housing market, which saw property transactions fall by 50% in May.
"Right now, there is no stamp duty on transactions below £125,000,” the Cabinet minister said.
"Today, I am increasing the threshold to £500,000. This will be a temporary cut running until March 31 2021 - and, as is always the case, these changes to stamp duty will take effect immediately.
"The average stamp duty bill will fall by £4,500. And nearly nine out of 10 people buying a main home this year, will pay no stamp duty at all."
The Chancellor said his statement is the start of the second phase of the Government’s plan to recover the economy after the Covid-19 crisis, which began with the creation of the furlough scheme in March.
He confirmed despite some calls to continue the programme past the autumn to prevent job losses, it would end as planned in October.
"Leaving the furlough scheme open forever gives people false hope that it will always be possible to return to the jobs they had before,” Mr Sunak said.
"And the longer people are on furlough, the more likely it is their skills could fade, and they will find it harder to get new opportunities.
“It is in no-one's long term interests for the scheme to continue forever - least of all those trapped in a job that can only exist because of Government subsidy."
But in order to prevent employers from making staff redundant when the wage subsidy ends, he announced the "jobs retention bonus" to reward them for keeping people on until at least as of 31 January, 2021.
"If you're an employer and you bring back someone who was furloughed - and continuously employ them through to January - we'll pay you a £1,000 bonus per employee,” the Chancellor announced.
"Its vital people aren't just returning for the sake of it - they need to be doing decent work.
“So for businesses to get the bonus, the employee must be paid at least £520 on average, in each month from November to the end of January - the equivalent of the lower earnings limit in national insurance."
He added: "Our message to business is clear: if you stand by your workers, we will stand by you."
The announcement came alongside a new £2billion “Kickstart Scheme” to create hundreds of thousands of jobs for young people subsidised by the Government.
Those aged 16-24 and claiming Universal Credit will be eligible for a six-month job placement paying the National Minimum Wage for 25 hours a week, with employers will be able to top this wage up.
Other measures include offering businesses £2,000 for each new apprentice they hire under the age of 25, a £111million investment to triple the scale of traineeships in 2020-21, £17million of funding for sector-based work academy placements and nearly £900million to double the number of work coaches to 27,000.