Chancellor announces £1,000 bonus for firms to bring staff back from furlough

8 July 2020, 13:16

Firms to get £1000 per employee if they bring back furloughed staff

By Megan White

Chancellor Rishi Sunak has announced a "jobs retention bonus" of £1,000 per employee to encourage bosses to keep on staff despite the ongoing coronavirus pandemic.

He revealed that companies who bring back employees and keep them in "decent work" until January, they will receive the payout.

Mr Sunak warned that "hardship lies ahead", but insisted that no-one will be left "without hope" as he announced an emergency package of measures to cope with the economic impact of coronavirus.

For businesses to get the bonus, the employee must be paid at least £520 on average per month.

The Chancellor also said on Wednesday that the furlough scheme, which ends in October, "cannot and should not go on forever."

But he said the new scheme will reward and incentivise employers who bring furloughed staff back.

The Chancellor said if employers bring back all nine million people who have been on furlough then it would be a £9 billion policy.

He told the House of Commons: "Leaving the furlough scheme open forever gives people false hope that it will always be possible to return to the jobs they had before.

"And the longer people are on furlough, the more likely it is their skills could fade, and they will find it harder to get new opportunities.

“It is in no-one's long term interests for the scheme to continue forever - least of all those trapped in a job that can only exist because of Government subsidy."

Explaining the new bonus scheme, Rishi Sunak told the Commons: "If you're an employer and you bring back someone who was furloughed - and continuously employ them through to January - we'll pay you a £1,000 bonus per employee.

"Its vital people aren't just returning for the sake of it - they need to be doing decent work.

£2bn “kick-start” scheme announced to help prevent youth unemployment

“So for businesses to get the bonus, the employee must be paid at least £520 on average, in each month from November to the end of January - the equivalent of the lower earnings limit in national insurance."

He added: "Our message to business is clear: if you stand by your workers, we will stand by you."

Mr Sunak said he knows people are "worried still", and said: "People are anxious about losing their jobs, about unemployment rising. We're not just going to accept this.

"People need to know we will do all we can to give everyone the opportunity of good and secure work. People need to know that although hardship lies ahead, no one will be left without hope."

Mr Sunak said the plan is to "protect, support and create" jobs, adding: "Where problems emerge, we will confront them. Where support is justified, we will provide it. Where challenges arise, we will overcome them.

"We entered this crisis unencumbered by dogma and we continue in this spirit, driven always by the simple desire to do what is right."

Listen & subscribe: Global Player | Apple Podcasts | Google Podcasts | Spotify

The Chancellor also announced the "kickstart scheme" to help young people secure jobs.

He said: "The kickstart scheme will directly pay employers to create new jobs for any 16 to 24-year-old at risk of long-term unemployment.

“These will be new jobs - with the funding conditional on the firm proving these jobs are additional.

“These will be decent jobs - with a minimum of 25 hours per week paid at least the national minimum wage."

Mr Sunak said employers will need to provide training and support to find a permanent job, adding: "If employers meet those conditions, we will pay young people's wages for six months, plus an amount to cover overheads."

He said the hope is for the first people to be in their jobs by autumn, with an initial £2 billion made available and no cap on the number of places available.

Rishi Sunak said employers will be paid £2,000 to take on trainees and employers will be paid to create new apprenticeships for the next six months.

The Chancellor told MPs: "We'll pay businesses to hire young apprentices, with a new payment of £2,000 - and we'll introduce a brand new bonus for businesses to hire apprentices aged 25 and over, with a payment of £1,500."

Mr Sunak said an extra £1 billion would be given to the Department for Work and Pensions to support people back into work.

On green measures, the Chancellor announced a £2 billion "green homes grant" to help homeowners and landlords apply for vouchers to make their properties more energy efficient.