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Sunak announces £500 million expansion to support furloughed workers amid tax rises

Written by Latifa Yedroudj on Thursday, 07 October 2021. Posted in Politics, Analysis

The new measures will provide tailored packages to help workers who have been hit by the pandemic

Sunak announces £500 million expansion to support furloughed workers amid tax rises

The new measures will provide tailored packages to help workers who have been hit by the pandemic 

As the furlough scheme comes to an end, thousands of workers will struggle to find jobs after the pandemic. Chancellor Rishi Sunak has announced a £500 million ‘plan for jobs’ extension, as the government tries to avoid a surge in unemployment as furlough ends. However, Mr Sunak has defended tax rises and also stressed the need to “fix” the nation’s finances after the pandemic. 

The new £500 million funding package will be used to help workers leaving the furlough scheme and unemployed over-50s back into work, while the “kickstart” scheme for young people will also be extended until March next year. The Kickstart Scheme, which was announced earlier this year, delivers funding for employers offering new job roles for 16-24 years olds who are currently in receipt of Universal Credit. Individuals who have come off furlough and are on Universal Credit will also be prioritised for help to find jobs with one-to-one support under the “job finding support” scheme, which will last until the end of the year.  

The £3,000 incentive for employers to take on apprentices will be extended until 31 January, the Chancellor said. Mr Sunak is extending a Job Entry Targeted Support (JETS) scheme, for those who have been unemployed for more than three months, by another year. In addition, the Chancellor is also extending a Youth Offer of guaranteed support for all young people on Universal Credit until the end of 2025. The Treasury said more than £500million of the new funding will be used for the package, coming from the education plus the work and pensions departments. 

Mr Sunak also plans to place the UK as a “global leader” in artificial intelligence in the new £34 million national AI fund, providing 2000 new scholarships for disadvantaged students. The Chancellor claimed the investment in AI could be worth £200bn a year to the economy in the long term. Speaking at the Conservative Party conference he said that the scholarships in AI would "ensure that the most exciting industries and opportunities are open to all parts of our society". 

The Chancellor has also defended tax rises after the government already announced a rise in National Insurance to fund NHS and social care. Speaking at the Conservative Party conference in Manchester, the chancellor said the party remains committed to “fix” public finances despite government borrowing during the coronavirus crisis. "There can be no prosperous future unless it is built on the foundation of strong public finances. And I have to be blunt with you. Our recovery comes with a cost," Mr Sunak said in his speech. "Our national debt is almost 100% of GDP, so, we need to fix our public finances because strong public finances don't happen by accident." Mr Sunak said he wanted to cut taxes but said "our public finances must be put back on a sustainable footing" first. 

Business leaders have welcomed the Chancellor’s measures to help get workers back onto their feet and provide them with extra support during these difficult times.“We welcome the announcement that the government will be funding additional measures to help smooth the end of furlough and help workers get back on their feet, especially in hard-hit sectors that have not yet recovered, JC Townend, Chief Executive Officer for LHH UK & Ireland said. “However, what we’re seeing now is a big mis-match between the skills of workers being made redundant and a hot job market in other areas. Redundant workers will need more than just a cv and interview skills. They need professional support in identifying whole new careers, and setting a new path in reskilling and support to get there. The most compelling companies are investing in helping their redundant workers find new careers elsewhere, or even reskilling and redeploying within their own firms.” 

However, some business leaders have urged the government to recognise the value of older, who make up a large portion of the workforce, and provide them with more support when it comes to upgrading their skills to make them more employable post-pandemic. “We still need to see more action from both Government and employers to recognise the value and potential of older workers, Kirstie Donnelly MBE, CEO - City & Guilds Group said. “At a time where critical skills gaps plague the UK economy, it’s never been more important to support the full workforce, from those just starting out on their career through to those aged 50 and over. We need to see better use of the apprenticeship system to support older workers, as well as solutions such as ‘skills bridges’ to help people update their skills and move into sectors with high demand.”

About the Author

Latifa Yedroudj

Latifa Yedroudj

Latifa Yedroudj has joined the Elite team to fully immerse herself in the business side of journalism, a strong passion of hers cultivated from young having co-run her mother's start up business since she was 18. Her interests lie in a wide range of subjects, including start ups, business, travel, and anything entrepreneurial she can get her hands on. She has worked for some of the biggest names in journalism including The Guardian and The Mirror. Follow her on @latifayed on Twitter for her latest journo rants.

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