Wednesday, 8 July 2020
Chamber reacts to Rishi Sunak's Summer Statement
Chancellor Rishi Sunak today announced a series of emergency measures to help retain and create jobs amid the Covid-19 pandemic in a Summer Statement.
The so-called “mini budget” included a job retention bonus that will reward every business that keeps on a furloughed employee (who is paid at least £520 on average per month) until January with a one-off £1,000 payment, as well as a “kickstart scheme” that directly pays firms to create jobs, apprenticeships and traineeships for 16 to 24-year-olds.
Other measures designed to boost consumer confidence involved cutting VAT on food, accommodation and attractions from 20% to 5% until 12 January, and an “eat out to help out” 50% discount of up to £10 per head to get people back to restaurants, cafés and pubs.
Scott Knowles, Chief Executive of East Midlands Chamber (Derbyshire, Nottinghamshire, Leicestershire), said: “Government is clearly moving from a survival mentality to one of economic stimulus.
“There’s a risk that the challenges imposed on businesses as a result of Covid-19 will fall more broadly on the shoulders of young people. A big chunk of today’s announcement focused on incentivising businesses to work with young people through traineeships and apprenticeships, as well as the additional provision for job centres and careers advice, so this is a welcome intervention.
“The £1,000 job retention bonus for companies that bring back furloughed staff will also be welcomed – for those small businesses currently considering their staffing options this could make a difference.
“Where possible, the apprenticeship route is preferable to work placements because it involves training and longer-term opportunities, although we need to ensure these become more flexible and evolve along with new ways of working.
“While these measures are important in providing businesses with the support they need, it doesn’t make the scale of the task any smaller and time will tell how many of the 700,000 workers in the East Midlands who were furloughed at the end of May will be kept on in the long term.
“Given that many of the jobs we have already lost won’t be returning in the same form, as a nation we need to be thinking about preparing the workforce for the jobs of the future.
“The Government’s wider strategy to invest in green jobs through a green homes grant provides a great opportunity for an area like the East Midlands, where construction and manufacturing are important industries. This transition to a greener economy, if implemented successfully, could signpost an exciting new era for our region.
“Meanwhile, policies to temporarily lower the VAT rate for businesses in food, accommodation and visitor attractions – as well as the innovative ‘eat out to help out’ scheme – should help bring back consumer confidence. However, we will have to wait and see just how comfortable people are to both return to these types of venues and put their hands in their pockets again.
“These are extraordinary times and they require extraordinary measures. There’s certainly some policies announced today that businesses, consumers and employees will welcome, but it doesn’t mean ‘job done’. We really can’t underestimate the scale of the challenge we’re facing.”