Chancellor outlines new Job Retention bonus

Chancellor Rishi Sunak has outlined the next stage in the coronavirus economic recovery plan.

The Prime Minister recently said that the way out of the coronavirus crisis was to “Build, build, build”: now Chancellor Rishi Sunak has made it clear that the Treasury sees the way ahead as being defined by keeping as many people as possible in work. Tackling unemployment, particularly among young people, is at the heart of the plan set out in his Summer Update to Parliament. The Budget and Spending Review will follow in the Autumn.

Job retention bonus

As the furlough scheme is to be wound down towards the end of October, many organisations have been concerned over the implications of mass redundancies without the scheme’s support. Last week, it was confirmed that if an employer brings someone back from furlough and keeps them in employment (earning at least £520 a month) until the end of January 2021, they will receive a £1000 bonus. However, people must be brought back to “proper work”.

The HMRC has confirmed that organisations will receive this bonus in February 2021 once accurate RTI data has been received. Further guidance on the bonus is expected in the Autumn. 

Kickstart scheme

Aimed at helping young people (16-24 year-olds), this will pay their wages for six months if employers take them on in new jobs. There will be no cap on numbers and the Chancellor urged every employer, big or small, to hire as many kickstarters as possible.

‘These will be decent jobs,’ he said, ‘with a minimum of 25 hours per week paid at least the National Minimum Wage (NMW)’. Employers will be able to top up that payment if they wish.

The scheme will open for applications in August and run until December 2021.


The Government will pay employers £1000 to take on trainees and will provide £100 million to create places on Level 2 and 3 courses. Companies will be given £2,000 each to encourage them to hire apprentices and there will be a new bonus of £1,500 for employers taking on an apprentice aged over 25.

Employment support

The Chancellor said that £250,000 will be invested in careers advisers while the number of work coaches in job centres will be doubled.

Green jobs

Vouchers will be available for homeowners and landlords to improve homes by making them more energy efficient. These will cover at least two-thirds of the cost of work, up to £5,000 per household. Worth £2 billion, this scheme will, the Chancellor said, create thousands of ‘green jobs’.

He will also make available £1 billion to improve the energy efficiency of public sector buildings.


There will be a temporary holiday on stamp duty on the first £500,000 of all property sales in England and Northern Ireland, to run until 31 March 2021. This means nine out of 10 people will pay no stamp duty, the Chancellor predicted.

Keeping people in work in hard-hit sectors

Hospitality and tourism have been hardest hit by the pandemic so the Chancellor has announced two new measures aimed at protecting jobs in these sectors.

Firstly, VAT will be cut on food, accommodation and attractions from 20 per cent to 5 per cent from 15 July 2020 to 12 January 2021.

Secondly, during August, everyone will get an ‘Eat out to help out’ voucher allowing a 50 per cent discount when they have a meal in a participating pub or restaurant (up to £10 per head for adults and children and applying Monday to Wednesday). Venues will be able to redeem the vouchers quickly, with money in their accounts after five working days, Mr Sunak said.

General commentary

The British Chambers of Commerce (BCC) welcomed the decision to prioritise work experience and job opportunities for those entering the world of work and agreed that the Kickstart Scheme will help firms create and support thousands of opportunities for young people.

Dame Carolyn Fairbairn, CBI Director-General, said that the Chancellor’s jobs plan will be a much-needed ‘down payment in young people’s futures’ and she called on business and Government to work to deliver the Kickstart Scheme simply and at speed.

Independent think tank the Resolution Foundation also praised the Kickstart Scheme, given that young people have been hit hardest by Britain’s growing jobs crisis. ‘It is very welcome that the Government has opted for a bold and ambitious scheme, with £2 billion potentially meaning jobs for around 350,000 young people,’ it said.

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