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Rishi Sunak will expose the government’s fears about the lasting impact of an impending winter surge in unemployment tomorrow when he unveils a new £ 4.3 billion aid package to help the unemployed find work.
On the eve of the release of the Treasury’s spending allocations for next year, the chancellor announced plans for a £ 2.9 billion restart plan designed to help one million workers find employment.
Sunak’s concern that the Covid-induced economic collapse will leave deep scars on the UK workforce was underscored by his decision to make funds available to the scheme for three years from 2021-2.
In addition to Restart, the Chancellor will provide an additional 1.4 billion pounds to increase the capacity of Jobcentre Plus, the government’s support service for the unemployed.
Sunak will tell MPs that tens of billions of government spending on infrastructure projects will create and protect hundreds of thousands of jobs across the country.
But new forecasts from the independent Office for Budgetary Responsibility will show that the current four-week lockdown in England, coupled with tighter fall restrictions elsewhere in the UK, have left the economy on track for its biggest contraction in three. centuries and unprecedented public indebtedness in peacetime.
As a result of the more pessimistic job prospects, Sunak has decided to expand its Kickstart job placement scheme for those under 25, providing an additional 1.6 billion pounds on top of the original investment of 2 billion pounds. The Treasury said the money would provide up to 250,000 government-subsidized jobs in 2021-2.
Other measures to boost employment will include the extension of the apprenticeship incentive, which offers employers up to £ 2,000 for each new apprentice they hire, and a £ 375 million package to support skills.
The chancellor is also expected to announce that the Ministry of Housing, Communities and Local Government will move out of London.
Sunak said: “My number one priority is protecting jobs and livelihoods across the UK.
“This spending review will ensure that hundreds of thousands of jobs are supported and protected in the acute phase of this crisis and beyond with a multi-million dollar investment package to ensure that no one is left without hope or opportunity.”
Matthew Fell, UK CBI policy director, said: “The devastating effects of long-term unemployment are all too real, so the sooner they can get back to work the better.”
Plans for a three-year budget and spending plan were abandoned when it became clear that a second wave of the pandemic would end the summer’s economic recovery. The one-year spending round will be the last in a series of mini-budgets since the summer, designed to protect individuals and businesses from decisions that have seen large parts of the economy shut down or restricted to promote social distancing.
Sunak will tell the Commons that the government has spent unprecedented sums since March, including paying the wages of 9.6 million workers who were suspended and the 2.5 million freelancers who were eligible for state support.
He will also insist that the extra money for the NHS and other Whitehall departments, along with increased capital spending, shows that there is no intention of returning to austerity.
But, with the OBR poised to forecast a budget deficit this year of more than £ 350bn, the chancellor will use a public sector payments freeze to signal the need to eventually control spending and cut borrowing.
Anneliese Dodds, the shadow chancellor, said: “The Chancellor’s irresponsible decisions this year have wasted billions, left us with the worst economic downturn in the G7 and pushed hundreds of thousands into unemployment.
“Now we need a relentless focus on jobs and growth, and responsible decisions to get the economy back on its feet.”
