In March 2020 the United Kingdom government introduced the Coronavirus Job Retention Scheme (“CJRS”). On 8 July 2020 the UK Treasury announced the steps which will be introduced to ‘Protect, Support and Create’ jobs as the CJRS is wound down and ends in October 2020.
1. Protecting Jobs
A new ‘Job Retention Bonus’ will be introduced to ‘reward and incentivise’ employers who keep on furloughed employees. Employers will receive a ‘one off’ payment of £1,000 for each furloughed employee who is retained in employment from the end of the CJRS (October 2020) until the end of January 2021. Employees must earn at least £520 per month on average between the end of the CJRS and 31 January 2021. Further details of the new Job Retention Bonus will be announced by the end of July; we anticipate that this will include further requirements and conditions for employers registering for and claiming the Job Retention Bonus.
2. Supporting Jobs
‘Kickstart Scheme’. Under the new Kickstart Scheme, which will apply in the United Kingdom, 6-month paid work placements will be available for people aged between 16 and 24 deemed at risk of long-term unemployment. Employers who take on individuals who qualify for ‘Kickstart’ will be refunded in an amount equal to 100% of the relevant National Minimum Wage for 25 hours per week plus associated employer national insurance (social security) cost and minimum automatic pension enrolment contributions.
Apprentices. To incentivize employers who engage apprentices (individuals engaged on a work-based training programme leading to nationally recognized qualifications) the UK government announced that employers who hire apprentices between 1 August 2020 and 31 January 2021 will receive a cash payment of £2,000, if the apprentice is under 25, and £1,500 if the apprentice is age 25 or more.
Work Placements. The UK government will provide additional funding to triple work placements and training to enable young people between ages 16 and 24 to get the skills and experience required to obtain a job and/or apprenticeship. Employers who engage trainees must provide work and training but are not obliged to pay them. Funding will now be available for employers who take on trainees and provide work experience at a rate of £1,000 per trainee.
Hospitality and Tourism. These sectors employ up to 8% of the UK workforce; have a high proportion of young people, women and BAME (black and ethnic minority) workers; and are among those sectors hardest hit by the restrictions imposed to control the spread of Coronavirus. To encourage spending in these sectors and thus preserve employment opportunities:
a) VAT (goods and services tax) on food and non-alcoholic drinks; accommodation; and admission to attractions such as theme parks will be reduced from 20% to 5% from 15 July 2020 to 12 January 2021; and
b) During August ‘Eat Out to Help Out’ will operate. Under this scheme meals and non-alcoholic drinks consumed between Monday and Wednesday will be discounted by 50% (subject to a £10 cap) per head with the UK government reimbursing the discounted sum.
3. Creating Jobs
The UK government had already announced its commitment to investment in infrastructure. It views this ‘historic investment in infrastructure’ as crucial to creating new long-term jobs and job opportunities.
In addition to existing capital spending and public investment, some of which will be accelerated, the UK government announced that:
• It will invest up to £40 million in a ‘Green Jobs Challenge Fund’ for environmental charities and public authorities to ‘create and protect’ 5,000 jobs improving the natural environment in England.
• A ‘Public Sector Decarbonisation Scheme’ will be introduced, with the UK government investing over £1billion, offering grants to public sector bodies to fund energy efficiency and low carbon heat upgrades.
• Over £100 million of new funding is to be made available for researching and developing ‘Direct Air Capture’ clean technology to capture CO2.
The UK government also intends to make £10 million of funding available immediately for ‘a first wave of innovative R&D projects’ to scale up manufacturing of the latest technology in batteries, motors, electronics and fuel cells. This is in addition to the announcement last year of up to £1 billion of additional funding under the ‘Automotive Transformation Fund’ for ‘cutting-edge’ automotive technologies.
ABOUT BAKER BOTTS L.L.P.
Baker Botts is an international law firm of approximately 725 lawyers practicing throughout a network of 13 offices around the globe. Based on our experience and knowledge of our clients' industries, we are recognized as a leading firm in the energy and technology sectors. Since 1840, we have provided creative and effective legal solutions for our clients while demonstrating an unrelenting commitment to excellence. For more information, please visit bakerbotts.com.