Summer statement: Employers will be paid £1,000 bonus to keep on furloughed employees

Commenting, Neil Leitch, chief executive of the Early Years Alliance, said it was 'unfathomable that the Government has once again failed to commit to any additional financial support for the early years sector.'

Chancellor Rishi Sunk said the country ‘faces ‘profound economic challenge’ and that the economy contracted by 25 per cent in two months.

The chancellor said furlough had been ‘a lifeline for millions but cannot and should not go on forever’ giving people ‘false hope’ and was in no-one’s long-term interest.

He said, ‘furlough will wind down flexibly and support people and businesses until October’.

To get as many people back to their jobs as possible, employers will be paid a new jobs retention bonus of £1,000 per employee if they keep workers in their jobs until January 2021.

Employees must be paid on average £520 a month between November and January.

The bonus would be paid to all employers, ‘If you stand by your workers we will stand by you,’ he said.

Jobs and traineeships for young people

Over 700,000 people are leaving education this year and under-25s are two-and-a half times more likely to work in a sector that has closed, Mr Sunak said.

The chancellor announced the £2bn ‘kickstart scheme’, which has been likened by commentators to Labour’s Future Jobs Fund which was introduced by Labour Government and then cancelled by the Conservatives.

The scheme will directly pay employers for taking on 16-to 24 -year-olds on universal credit in new jobs of at least 25 hours a week on the national minimum wage.

‘The Kickstart Scheme will directly pay employers to create new jobs for any 16 to 24-year-old at risk of long-term unemployment,’ Mr Sunak said.

‘These will be decent jobs – with a minimum of 25 hours per week paid at least the National Minimum Wage.

‘I urge every employer big or small to hire as many kickstarters as possible.’

Employers will need to prove that these are new jobs.

The fund will subsidise six-month work placements for people on Universal Credit aged between 16 and 24, who are at risk of long-term unemployment.

The Government will also will pay employers £1,000 to take on trainees and provide £100m to create places on Level 2 and 3 courses. 

On apprenticeships, the Government will give companies £2,000 each to encourage them to hire apprentices and a bonus for companies hiring apprentices aged 25 and over.

Responding shadow chancellor Anneliese Dodds said ‘Britain should have had a back to work budget’ but that instead the Chancellor was ‘putting off decisions’.

Earlier, the chancellor said the Government would produce a Budget and Spending Review in the autumn.

Analysis published today will show that the ‘poorest had been helped the most’ by the Government, the chancellor also said.

More reaction soon...