Updated: 08/07/20 16:00
The fight for hospitality
When announcing the third stage of his plan to bolster job retention and sure up the struggling hospitality industry, which saw the largest net decline in payroll since the pandemic struck and widespread redundancies across high-street brands such as Pret A Manger, Café Rouge and SSP Group, which owns and operates Upper Crust and Ritazza, Chancellor Rishi Sunak stated: “I want every person in this house and across the country to know I will never accept unemployment as a simple fact of life”.
Sunak confirmed that 80% of firms in the hospitality sector had temporarily stopped trading, with 80% of workers furloughed in this time. Emploring the public to continue spending in the hospitality sector, Sunak said: “I know people are cautious about going out but we wouldn’t have lifted restrictions if we didn’t think we could do so safely”.
To fuel spending and footfall across the sector, Sunak announced that whilst VAT on hospitality and tourism currently stands at 20%, his new measures will bring this number down to just five per cent for the next six months – which he stated will aide in protecting over 4million jobs.
His final measure for the hospitality industry was aimed at customers. “To get customers back into restaurants cafes and pubs, and to protect the 8million workers in this sector, we’re announcing the ‘Eat Out To Help Out scheme,” he said.
The scheme will allow customers at participating food and drink retailers to offer 50% off to all customers, including children, with a maximum discount of £10 per head.
“We need to give these businesses the confidence to know that if they open up, invest in making their businesses safe and protect the jobs of their workers, customers will come,” he concluded.
Updated: 08/07/20 15:45
Furlough was ‘delaying the inevitable’
Chancellor Rishi Sunak’s recently-announced range of measures to rejuvenate hiring and career prospects for younger workers has divided opinions from both industry specialists and the general public.
Yet, Lee Biggins, Founder and CEO of CV-Library, revealed that he believes the measures ‘offer some hope’ for both young professionals and those who are currently enrolled in the CJRS furlough scheme.
He said: "Sunak's summer statement offers some hope to young people and those who are on the furlough scheme.
“The ongoing extensions to the [CJRS] have been a lifesaver for businesses that are struggling, but it is also, sadly, delaying the inevitable; redundancies and mass unemployment.
“With the introduction of trainee programmes for young people, and more funding for apprenticeships, businesses will be encouraged to create employment opportunities for 16 to 24-year-olds; but whether they make them remains to be seen.
“It's great to see the Chancellor focus his budget on jobs, but we must remember that, providing a second wave is kept at bay, it's going to take at least another 12 to 18 months for the job market to recover from COVID-19," he concluded.
Updated: 08/07/20 15:20
‘Employers need urgent guidance given the age-specific focus of the scheme’
In response to the Chancellor’s unveiling of the ‘kickstart scheme’ a legal expert has warned that employers need urgent guidance given the age-specific focus of the scheme.
Sunak previously announced that the Government is making an initial £2billion available which will be paid directly to employers to create jobs for 16 to 24-year-olds who would otherwise be at risk of long-term unemployment.
1/ We’re launching a new programme to give hundreds of thousands of young people the best possible chance of getting on and getting a job.— Rishi Sunak (@RishiSunak) July 8, 2020
I’m making available an initial £2 billion and there will be no cap on the number of places available. #PlanForJobs pic.twitter.com/YuEBAiysrH
Stephen Ratcliffe, Partner in the Employment Practice at Baker McKenzie said that employers need urgent advice on how they can make use of it “without committing unlawful age discrimination in their recruitment process”.
With regards to the job retention bonus of £1,000 for each employee brought back to work from furlough, Ratcliffe said that it is a ‘welcome and surprising development.
“Again, however, urgent guidance is needed to assist employers to understand the key requirements of the scheme, particularly as regards the minimum pay requirements. Those facing cash flow issues will also need comfort that the bonus will be paid promptly, without unnecessary administration.
“Both those making use of this scheme, and those who have used and continue to use the furlough scheme, also need reassurance that that the Government will not later seek to recoup those funds due to minor or inadvertent errors in applying the rules, particularly given the contradictory and uncertain guidance we have seen in respect of the furlough scheme,” Ratcliffe added.
Updated: 08/07/20 15:05
‘Kickstart scheme may face difficulties’ says CIPD
Peter Cheese, Chief Executive of the CIPD, has raised concerns over the uptake of the ‘Kickstart’ scheme announced today, and called upon the Government to form local partnerships to build confidence in younger workers.
“The £2bn kickstart fund is a bold measure to help get young people into work but employer engagement will prove critical. Similar schemes in the past have floundered as employer pick up was low or largely limited to low-paid opportunities in the public or charitable sectors,” he said.
“This scheme may face similar difficulties if it fails to engage with the private sector - especially at a local level. The Government will need to draw on local partnerships and networks to make it work for young people and small employers in particular,” Cheese concluded.
Updated: 08/07/20 14.50
Many organisations have expressed elation over the recent announcement from the Chancellor, with Neil Carberry, CEO of the Recruitment and Employment Confederation, stating that moving on from the furlough scheme as the crisis develops is ‘essential’.
However, he pointed out that while many initiatives are in place to help Britain get back to work, no details were shared on how the Government plans to boost the economy.
Carberry added: “One disappointment in the speech, however, is the lack of any indication about the economic boost that will be delivered by re-opening workplaces. Many firms want to know when Government will feel able to boost employee confidence by switching from working from home if you can, to going to work if it is safe.”
Updated: 08/07/20 14.35
Trying to survive
While the Chancellor’s pledge to encourage employers to return their furloughed employees back to work following the pandemic is welcomed, Joanne Frew, National Head of Employment at DWF, has raised concerns that some employers do not have the luxury of time, and need to act much faster in order to survive.
“With the Coronavirus Jobs Retention Scheme closing on October 31, 2020, many employers have been concerned about what support will be available from the Government. With a primary focus on protecting jobs, the Chancellor set out his plans to help re-open the economy with further measures such as the discount vouchers to eat out in August, reducing VAT in the hospitality and tourism sectors from 20% to five per cent until January 12, 2020, and reducing stamp duty on transactions below £500,000 until March 31, 2021,” Frew explained.
“At a time when employers are making significant decisions about the future of their workforce, the jobs retention bonus might help steer some employers to avoid wide-scale redundancies while they wait to see what impact the stimulus plans have on the economy. Although a clear step in the right direction, some employers do not have the luxury of time and are having to make difficult decisions to survive.”
Updated: 08/07/20 14:16
Do Gov measures alienate disabled staff?
Diane Lightfoot, CEO, Business Disability Forum, shared her thoughts on Sunak’s announcement, stating that whilst the latest measures are positive for many workers, no consideration has been given for those with disabilities.
“Even before the pandemic, disabled people were far less likely to be in paid employment than their non-disabled peers and evidence shows that disabled people are disproportionately affected during times of economic recession.
“We call on the Chancellor to ensure that plans to increase the number of job centre staff will include greater numbers of Disability Employment Advisers, with expertise in supporting disabled people into employment.
“The Chancellor mentioned the extension of several job support programmes. We would urge him to increase funding and eligibility for Access to Work - a scheme which is a lifeline for many disabled people in securing and maintaining employment,” she concluded.
Updated: 08/07/20 14:05
Future talent will 'play a crucial role in our economic recovery'
Whilst TUC's Frances O'Grady has denounced the announcement, Dr Joe Marshall, Chief Executive of the National Centre for Universities and Business (NCUB), welcomed the update, stating that ‘the government has rightly acknowledged that COVID-19 has hit young people the hardest’.
“The ‘Kickstart Scheme’ is, therefore, a welcome step to keep youth unemployment down. It is vital to avoid lasting damage to careers that are just beginning; after all, they are the future talent the nation needs and will play a crucial role in our economic recovery,” he said.
“Skilled graduates, in particular, are the pipeline of future talent that businesses need, and they will undoubtedly play a crucial part in our economic recovery post-COVID. A skills-led recovery is the only way to ensure that every community and all parts of the country begins to recover economically. What’s more, in the long run, successful innovation that leads to economic growth is reliant on the flow of graduates into businesses of all kinds and sizes,” Marshall added.
Updated: 08/07/20 13:47
Far more needed to protect UK against mass unemployment, says TUC
Responding to today's announcement by Chancellor Rishi Sunak on the Government's plans to stave off job losses and fuel the economy, TUC General Secretary Frances O'Grady confirmed that the measures had fallen short of his expectations.
“Mass unemployment is now the biggest threat facing the UK, as shown by the thousands of job losses at British Airways, Airbus and elsewhere. The Government must do far more to stem the rising tide of redundancies. We can’t afford to lose any more good skilled jobs," said O'Grady.
“The chancellor should have announced targeted support for the hardest-hit sectors like manufacturing and aviation. Struggling businesses will need more than a one-off job retention bonus to survive and save jobs in the long-term," he added.
Updated: 08/07/20 13:35
'No apology for ending furlough'
Chancellor Rishi Sunak touted the Government's success in the implementation of the Coronavirus Job Retention Scheme, which he said was the 'largest and most comprehensive economic response in the world'.
Sunak told the House of Commons today that he makes 'no apology' for announcing the end of the CJRS Government-backed furlough scheme, under which 11million workers have remained inactive over the course of the pandemic.
"If I said the scheme will end on October, critics say November. If I say November, critics say December," he told the House.
"Furlough has been a lifeline for millions, but it can not, and should not, go on forever. I know that when furlough ends it will be a difficult moment. Today we’re introducing a new policy to reward and incentivise employers to bring people back.”
Updated: 08/07/20 13:15
Chancellor makes statement
HR leaders up and down the country will be interested to hear the outcome of Chancellor Rishi Sunak’s ‘mini-Budget’ announcement today.
In the House of Commons, Sunak opened by stating that he is aware that people are still anxious about unemployment rising.
He said: “We will do all we can to give everyone the opportunity of good and secure work.”
Sunak went on to say that the economic response is moving through three phases. The second phase now is about protecting jobs, while the third phase is focussed on rebuilding.
Sunak went on to reveal more granular details regarding the UK Government’s plan to secure and protect more jobs.
Bonus for employers returning furloughed staff
The Chancellor announced a bonus scheme for employers that re-employ furloughed workers which is worth up to £9billion.
He said: “If you stand by your workers, we will stand by you.”
Sunak explained that any organisations bringing back furloughed staff and keeping them in employment until January, will receive a bonus of £1,000. In order to be eligible, employers must pay at least £520 per month.
We want to reward employers who successfully bring staff back from furlough.— Rishi Sunak (@RishiSunak) July 8, 2020
If you bring back someone who was furloughed - and continuously employ them through to January we'll pay you a Job Retention Bonus of £1,000 per person. #PlanForJobs pic.twitter.com/j4UnLpz1xs
Sunak went on to reveal the launch of a new programme called the ‘Kickstart Scheme’ which is intended to help thousands of young people get into employment.
£2billion is being made available and Sunak said that there will be no limit on the number of places available.
Employers will be paid directly via the scheme to create jobs for 16 to 24-year-olds who would otherwise be at risk of long-term unemployment.
The wages of young people will be paid for six months.
1/ Traineeships are a proven scheme to get young people ready for work. We know they work, so for the first time ever we’ll pay employers £1,000 to take on trainees, with triple the number of places. #PlanForJobs pic.twitter.com/lX8hV0al2n— Rishi Sunak (@RishiSunak) July 8, 2020
To help with employment, Sunak announced a scheme to incentivise employers to take on trainees.
Within this, employers will be paid £1,000 to take on trainees with triple the number of places.
Training including Maths, English and work preparation will be offered to 16 to 24-year-olds. They last from six weeks to six months.
In addition, for the next six months Sunak shared the Government is going to pay employers to create new apprenticeships.
For the next six months we’ll pay businesses to hire young apprentices, with a payment of £2,000.— Rishi Sunak (@RishiSunak) July 8, 2020
We’re also introducing a brand-new bonus to hire apprentices aged 25 and over, with a payment of £1,500. #PlanForJobs pic.twitter.com/rbD9CNnthf
The number of work coaches will also be doubled in job centers, as well as expanding the rapid response service and developing a new scheme to support the long-term unemployed – injecting an extra billion pounds into DWP to support millions of people back to work.
We are doubling the number of work coaches at a cost of nearly £900m this year.— Rishi Sunak (@RishiSunak) July 8, 2020
Work coaches are the first point of contact for someone who loses their jobs and comes for help. They provide invaluable personalised support to help people work. #PlanForJobs pic.twitter.com/PNTguyF2Lf
Updated: 08/07/20 12:00
What do employers want to see?
Ahead of Rishi Sunak’s ‘mini-Budget’ announcement, an HR practitioner has shared her thoughts on what she thinks should be detailed in the upcoming announcement to support employers.
Vicki Field, an independent HR practitioner, told HR Grapevine that from her experience working with a wide variety of clients, the one underpinning factor is that they all employ people and that everyone has been impacted by the COVID-19 pandemic.
She said that Sunak’s Coronavirus Job Retention Scheme (CJRS) has been “incredible in allowing companies to avoid redundancies, and in many cases, to remain trading”.
Under the job retention scheme, the Government currently contributes 80% of salaries of workers whose jobs have been put on hold following lockdown and the subsequent closure of businesses.
Though from August, employers will be expected to contribute to the scheme and new adaptations are set to come into play later in the year.
Field said that some industries will take longer than others to bounce back including in the hospitality sector where “there is only a faint light on the horizon”.
This is supported by research from UKHospitality which found that sales across the sector are expected to be 56% lower than last year, which would reduce revenues by £73.4billion – FoodBev.com reported.
“Social distancing and ‘track and trace’ puts pressure on profitability. As a result, I would welcome some additional assistance for those industries who will struggle to get back to full trading before we eradicate COVID-19,” she added.
Updated: 08/07/20 11:30
‘It is essential to carve out career opportunities for younger workforces’
Ahead of Sunak’s statement, Mandy Watson, Managing Director of Ambitions Personnel, told HR Grapevine: "It's wise to pre-empt and take action now regarding the indefinite economic struggles the country as a whole will face for the rest of this year.
“There is strong evidence that the younger workforce suffers more at a time like this, and I do believe it is essential that businesses make an effort to provide fulfilling and gainful career opportunities to our younger workforce who will be struggling to navigate the job market and get their foot through a door right now.
“However, we must not overlook the struggles and discrimination the older generation face during an economic downturn and finding new employment. We'll eventually recover financially, but we need to get everyone back into work, and this will not be achieved by totally disregarding people over the age of 30-years. Their skills are just as valuable to employers and should not be taken for granted."
Updated: 08/07/20 10:55
Economists predict that unemployment could rise
Economists have predicted that unemployment figures could triple to more than five million over the course of this year if a second wave of COVID-19 hits.
The Independent cited a report from the Organisation for Economic Co-Operation and Development (OECD), which predicted that more than one in seven workers (14.8%) may be out of a job, meaning that the UK is bracing for a tough jobs market.
Ahead of the Chancellor’s statement today, Josh Graff, who heads up LinkedIn in the UK, said that Sunak’s commitments will likely be 'welcome news' for jobseekers and younger generations.
“While the UK labour market is starting to show signs of improvement, our data shows there are three times as many people applying to every role compared to this time last year, and people in the hardest hit industries are already turning to other sectors to find jobs.
“COVID-19 is accelerating the pace of technological change and giving rise to new kinds of jobs. There needs to be a major reskilling commitment, particularly around digital skills, if we are going to help people find work,” Josh Graff, UK Country Manager at LinkedIn added.
Among other things, Sunak’s announcement is said to include investment in traineeships, as well as greater support for jobseekers looking for work.
Updated: 08/07/20 08:45
Following a BBC news report that Sunak is primed to announce 30,000 new traineeships to get young people in England into work amid fears of mounting unemployment, a CEO has warned that the younger generation will “bear the brunt of COVID-19”.
Dean Sadler, CEO and Founder of the recruitment software provider, TribePad, told HR Grapevine: “Kept out of the classroom for four months, their exam grades will now be based on averages instead of how they actually perform in exams.
“Their futures will largely depend on this and they will continue to miss out on vital life skills and learnings while out of the classroom.
“With universities only offering online classes, many school leavers are putting off going to university for a year, so that when they do, they can get maximum value. And unfortunately, we will see fewer graduate schemes on the job market – businesses cannot afford to hire people to train up, so they will look to employ candidates who already have the skills they need.”
“This creates the perfect storm for young people – competition will be high and they may get stuck in low-skilled, low-paying jobs,” Sadler added.
In addition, TribePad’s Founder alluded that the Government and private enterprise should prioritise the future of the workforce.
“Not providing support to young people in the coming months will do more harm than good in the long-run for the economy,” he added.
Updated: 08/07/20 08:30
Chancellor of the Exchequer, Rishi Sunak, is expected to deliver a ‘mini-Budget’ announcement today (July 8, 2020) where he is said to detail the next stage of the UK’s economic recovery amid the coronavirus pandemic.
The announcement – which will act as a follow-up to Sunak’s earlier Budget in May but is not the Autumn statement – will take place at the House of Commons at circa 12:30pm.
Numerous sources have reported that details within his announcement could include cash bonuses for firms that hire trainees.
ITV News reported that more than £100million is set to be invested in traineeships for young people. Part of the initiative, which lasts from six weeks to six months, will see young people receive maths, English and CV writing training and guidance preparing them for entering the workplace.
A Treasury Spokesperson told ITV: "The Government are making available three times more funding to providers this year to pay for tripling the number of trainees and increasing the funding providers receive for training.”
Sunak told the Daily Telegraph that young people are most at risk of unemployment “so we’re backing them and the companies that they can learn from”.
“We know traineeships work so we're investing in their skills and our collective future,” he added.
Other details set to be announced include greater support for jobseekers and job centres to help boost employment figures.
A Treasury Spokesperson told ITV News: "The longer someone is out of work, the harder it is to return.
"Doubling the number of work coaches will ensure those in need are given immediate support to get back on their feet and into a job."
In addition, a £3billion package was announced on Monday evening to upgrade buildings and create jobs in a move to boost low-carbon industries.
Updated: 07/07/20 15:45
Prior to the Chancellor’s announcement, new figures were released indicating the scale of the UK Government’s existing bailouts.
According to the Daily Mail, the bill to assist with incomes is now more than £35billion and is still increasing.
Elsewhere, over £45billion has been given to businesses in loans across the UK, including a million ‘bounce back’ capital injections.
In addition, economists have also warned that while interest rates are low currently, if they were to rise to 2.25%, then the cost of servicing the debt could reach £100billion by 2025.
This would be an estimated equivalent to spending on education and defence combined.
Updated: 07/07/20 13:30
Ahead of the Chancellor’s announcement, some people have taken to social media predicting what they think will be included in Sunak’s announcement.
Some hinted towards cash incentives for taking on trainees, while others alluded to an increase in infrastructure spending.
Rumours of a Stamp Duty Holiday, cash incentives for taking on a trainee- what else might be announced in the mini Budget on Wednesday?
My guess might be a VAT holiday and a lot of infrastructure spending #minibudget
Rumours of a Stamp Duty Holiday, cash incentives for taking on a trainee- what else might be announced in the mini Budget on Wednesday?— Dinesh Bharwani (NHS Pension Specialist) (@db14081976) July 6, 2020
My guess might be a VAT holiday and a lot of infrastructure spending #minibudget
@RishiSunak Do NOT give all house holds £500/£1000 - instead invest in sml - med size CO’s to take on trainees - apprenticeships? #MiniBudget invest in business not spending spree !! That will come!— Y Maxwell-Darkes (@McCartneyMaxwel) July 6, 2020
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