Firms applaud UK pandemic recovery plan

A multi-billion pound, rescue-and-recovery plan for the UK economy in the wake of the Covid-19 pandemic was laid out in parliament on Wednesday by Chancellor of the Exchequer Rishi Sunak.

David Sapsted

8 July 2020

His announcements, which included financial incentives to companies who take on young trainees, were generally welcomed by business groups, though there were warnings that firms also needed help to upskill existing workforces to meet future technological challenges.M Sunak told MPs: "We will not be defined by the (coronavirus) crisis but our response to it. Where problems emerge, we will confront them. Where support is justified, we will provide it. Where challenges arise, we will overcome them."He said that despite the "extraordinary" economic support measures the government had already taken, the UK still faced "profound" challenges and significant job losses.Among the measures he outlined were:

a £1,000 bonus per employee to companies who continued to employ furloughed workers until January.

a Kickstart Scheme to directly pay employers £1,000 for every job it creates for any 16- to 24-year-old at risk of long-term unemployment, plus £2,000 for every apprentice hired, in addition to a £100 million fund to create places on skills training courses.

a £2 billion Green Homes Grant under which "homeowners and landlords will be able to apply for vouchers to make their homes more energy efficient and create local jobs", with another billion pounds to improve the energy efficiency of public sector buildings.

a tax holiday until March 31 next year on stamp duty on the first £500,000 of all property sales in England and Northern Ireland.

a VAT cut, from 20 per cent to five per cent (until January 12 next year), for the hospitality sector.

Reacting to the announcements, Steve Collinson, head of HR at insurance firm Zurich: "With a recession looming, these measures will provide crucial support for young people and their careers."However, the world of work is changing fast. With many jobs evolving as a result of AI and automation, it’s more important than ever to ensure workers can reskill for new careers."Under current rules, firms can only access apprenticeship funding to upskill employees in existing roles, not retrain them for new ones. Unless the government builds greater flexibility into the apprenticeship rules, many firms will struggle to transform their workforce for the future."Dame Carolyn Fairbairn, director-general of the Confederation of British Industry (CBI), described the chancellor's jobs plan as "a much-needed down payment in young people’s futures".She added: “By investing in skills, the government can lessen the potential scarring impact of the pandemic for the next generation.“Business and government must now work to deliver the Kickstart Scheme simply and at speed. There can be no time lost in preparing young people who are entering one of the toughest jobs markets we’ve seen in decades.”Stephen Phipson, chief executive of the manufacturers' organisation Make UK, said industry would applaud Mr Sunak's "bold intent" to boost business confidence and help heal the economy."Manufacturers were already at the forefront of a new digital era and the crisis has shot them forward into a future economy where there will be new jobs which will require new skills," he said. "As such, the emphasis on protecting jobs which already exist, whilst safeguarding and preparing young people with the skills for future jobs which may not yet have been invented is a strategy that companies will fully support. In particular the funding for apprenticeships is especially welcome and will help boost employers’ investment in their future workforce."However, Mr Phipson added that this was "not the beginning of the end of this crisis, but perhaps the end of the beginning" as far as the economy was concerned and that the government would need to take further action in the future.The government’s plan for a £3 billion package of green investment to decarbonise homes and public buildings was welcomed by Claire Walker, co-executive director, at the British Chambers of Commerce.“This scheme is a first step toward supporting livelihoods and achieving important carbon emissions targets," she said.“Our business communities across the UK have called for an economic recovery that prioritises jobs and supports our net-zero ambitions, as part of a coherent strategy to restart, rebuild and renew."On the relief on stamp duty for property purchasers, Martin Bikhit, managing director of estate agents Berkshire Hathaway HomeServices Kay & Co, commented: "We expect mortgage lenders to have a surge in inquiries over the coming weeks however with a few high loan to value offerings being paused due to post lockdown demand there may not be the tidal wave the government hoped for."Coupled with near record low interest rates, the news provides a much welcomed boost, particularly for first time buyers in London who will see the greatest impact of the holiday, although the reduced mortgage offerings by lenders means that we may not see the impact from the outset."