On Wednesday the Chancellor Rishi Sunak (the minister in government who makes decisions on spending) set out his blueprint for economic recovery. The main focus of the plan was ‘jobs, jobs, jobs’ and the effect it has will be crucial for young people like yourself.
From an economics point of view, this crisis has disproportionately affected young people with 35% of people, aged between 18-24 excluding full-time students, either being furloughed or losing their jobs. So has Rishi done enough to stop mass youth unemployment?
To save you reading the 33-page policy paper, Naked Politics has broken down what exactly these new measures could mean for young people, keeping it simple and straight to the point.
The government is going to cover the cost of 6-month work placements aimed at those aged 16-24 who are on Universal Credit and are deemed to be at risk of long-term unemployment.
This scheme is essentially a rebrand of the future jobs fund, a Labour initiative, which was scrapped under the coalition. David Cameron described the future jobs fund as ‘one of the most ineffective jobs funds there had been’ which begs the question as to why Sunak would go back to the policy.
The evidence doesn’t, however, support this Cameron’s claim as research from the Department of Work and pensions showed that two years after the programme participants were 11% more likely to be in employment. In all, it looks as though this scheme will be £2 billion well spent by the Chancellor.
This scheme will give an employer £1000 per employee that they return to work from furlough as long as they abide by the T’s and C’s. The aim is that this will stop large scale unemployment in October when the furlough runs out.
Critics argue this scheme is unlikely to be enough to persuade employers to take back workers in the current economic situation. The proposal has also been criticised for ‘deadweight’ spending, meaning that the companies that will receive the money would have taken employees back anyway.
So essentially it is viewed as a waste of taxpayers money and it is expected to be largely ineffective however Sunak believes strongly in this policy overruling HMRC advice and we won’t know the true impact until February.
Measures for hospitality
The Chancellor has proposed a cut in VAT (value-added tax) from 20% to 5% in the hospitality sector. Another proposal by Rishi is the ‘eat out to help out scheme’ meaning that in August between Monday and Wednesday your half chicken and Piri Piri chips at Nandos will be 50% off. Both schemes aim to revitalise and increase spending in a sector that was forced to stop trading and is a large employer. The hospitality sector disproportionately employs young people, women and people from BAME backgrounds so it is vital the scheme proposed is enough to keep people in their jobs.
Vocational education funds
The government is introducing a new payment of £2,000 to employers in England for each new apprentice they hire aged under 25. As well as a new fund to increase traineeships to triple participation and a £101 for 18-19 year-olds to access high-quality level 2 and 3 courses. Apprenticeships are a proven success with 65% of apprentices staying with the company long term so an attempt at improving the scale is welcome as they provide young people with good quality employment and a career path.
Overall the Chancellor has pledged to spend around £30 billion in measures to support, protect and create jobs all of which are geared to helping young people. We’ll have to see whether the measures are successful however the scale and largely targeted nature of the proposals is promising.
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