THE Government will subsidise the wages of young people hired by firms under a major new scheme aimed at finding work for 350,000 jobless Brits.
Under the £2billion Kickstart Scheme, the Government will pay towards six months of wage costs of each 16 to 24-year-old hired by employers.
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It will cover 100 per cent of the minimum wage for a maximum of 25 hours a week — with firms able to top up wages.
Chancellor Rishi Sunak will announce the scheme in his mini-budget today as part of efforts to help Britain bounce back from the coronavirus crisis. He will hail it as one of the biggest jobs support packages in decades.
PM Boris Johnson has put tackling youth unemployment at the top of the Government’s recovery plan. It follows dire forecasts from experts predicting more than a million youngsters will be out of work this year.
The Kickstart Scheme will cost the state an average of £6,500 for each job. But Mr Sunak hopes it will trigger a mass hiring spree by firms when it opens next month.
An initial £2billion has been put aside for the scheme but the Treasury said it will increase the budget if there is high take-up.
Employers will be able to offer a six-month work placement for people aged between 16 and 24 who are claiming Universal Credit and at risk of long-term unemployment.
The Resolution Foundation last night forecast the scheme will help find jobs for around 350,000 youngsters in that age group.
Research shows 18 to 24-year-olds are twice as likely to have been furloughed while 250,000 more under-25s are claiming jobless benefits since March.
Economic growth plunged by 20 per cent in April alone, but the Bank of England now believes a quick “V-shaped” recovery is likely.
Unemployment is expected to soar to the highest level since the 1980s and by May the number claiming jobless benefits had already hit almost three million.
The Treasury said the jobs created by the scheme will give young people the opportunity to develop skills and experience that will improve their chances of going on to find long-term sustainable work. The scheme was widely welcomed last night.
Mike Cherry, boss of the Federation of Small Businesses, said: “A focus on jobs is absolutely essential to lift the country out of the economic hardship caused by the Covid crisis.” He said the scheme could “prevent a generation lost to long-term unemployment”.
Kathleen Henehan from the Resolution Foundation called it a “bold and ambitious scheme”.
Frances O’Grady, general secretary of the TUC, called it a “good first step” to prevent mass youth unemployment.
But Lib Dem leadership candidate Layla Moran said the package “will sadly be too little too late for many of the corona class of 2020”.
Meanwhile the Organisation for Economic Co-operation and Development has warned that the unemployment rate could reach 15 per cent if a second virus wave hits.
It said that the number of people without work could soar to five million if the country is forced to go into lockdown again.
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