Setting out his spending plans for the next year, the Chancellor is to unveil a package of measures to help those made redundant during the pandemic find new career opportunities as quickly as possible. He will also promise tens of billions of pounds in long-term investment projects to help kick start economic growth.
Ahead of tomorrow’s Spending Review statement to MPs, the Chancellor said: “My number one priority is to protect jobs and livelihoods across the UK.
“This Spending Review will ensure hundreds of thousands of jobs are supported and protected in the acute phase of this crisis and beyond with a multi-billion package of investment to ensure that no one is left without hope or opportunity.”
Mr Sunak’s plans will include a £2.9billion “Restart” scheme to help a million unemployed people with their job searches over the next three years.
Under the scheme, people out of work for more than a year will be offered regular, intensive job-hunting support tailored to their individual needs.
He will also promise £1.4billion to expand the capacity of Job Centre Plus offices around the country to be ready for a new surge in jobseekers as a result of the downturn triggered by the pandemic lockdowns.
The sums are part of a new multi-billion budget agreed for the Department of Work and Pensions in the Whitehall spending review.
Rishi Sunak will announce his spending review tomorrow
Mr Sunak will also give the go ahead to £1.6billion for his Kickstart scheme in 2021/22, designed to create six-month work experience placements for around 250,000 young people.
And an apprenticeship hiring incentive launched in August will also be extended to 31 March 2021, offering employers up to £2,000 for every new apprentice they hire.
Other measures to help employment to be announced today will include £375million for helping train workers in new skills.
Out of that cash, £138million will help fund the Government’s Lifetime Skills Guarantee training initiative and a further £127milliion will go towards skills training under the Chancellor’s Plan for Jobs announced earlier this year.
Mr Sunak’s plans for capital investment to be announced today include building homes, roads, railways and cycle lanes which will help create hundreds of thousands of new job opportunities around the country.
Coronavirus has seen Britain hit by a job crisis
His announcements tomorrow come on top of more than £200billion in Treasury initiatives this year to support employment through the health crisis including funding the wages of nearly 10million “furloughed” employees and grants for around 2.6milion self-employed workers.
Matthew Fell, policy director at the Confederation of British Industry said the Chancellor was right to focus on job creation as the economy looked to recover in 2021.
“Covid-19 has swept away many job opportunities, for young people in particular,” he said.
“The scarring effects of long-term unemployment are all too real, so the sooner more people can get back into work the better.”
Claire Walker, of the British Chambers of Commerce, said: “The impact of coronavirus on firms’ ability to create and retain jobs has been significant.
“To help business communities rebuild, it is vital that the Government supports them to re-train and re-skill the UK workforce.”
A Tesco spokesman said: “At this challenging time for businesses we welcome this package for jobs and boost for training from the Chancellor.
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“We welcomed 1,000 Kickstarters to our business earlier this month and are also pleased to see initiatives such as the Lifetime Skills Guarantee, which will help us to ensure that our colleagues, new and old, are able to upskill and continue their career development.”
In budget settlements for other Whitehall departments, the Chancellor will also promise a £275 million funding boost to increase capacity in courts to tackle the impact of the pandemic and support the Government’s crackdown on crime.
He is also to confirm tens of millions for a new Counter Terrorism Operations Centre to fight emerging threats to the UK.
Mr Sunak is expected to signal a series of budget cuts to some departments as he begins setting a course to reduce the huge Treasury borrowing caused by the pandemic.
MPs anticipate a significant reduction in the Government’s multi-billion overseas aid budget.
Officials are understood to be preparing legislation to allow a cut to the overseas development budget despite a law committing the Government to spending 0.7% of annual GDP on aid.
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Cutting overseas aid is likely to anger opposition MPs and some Tories.
Preet Kaur, Labour’s shadow international development secretary, said: “During this pandemic the government have handed over millions of pounds of UK taxpayers’ money to its friends yet are now turning their backs on the world’s poorest.
“This move will damage the UK’s reputation around the World and will only show our allies and detractors that Britain under Boris Johnson is no longer interested in fulfilling our responsibilities or leading on the global stage.
“Labour are committed to spending 0.7% of Gross National Income on aid to tackle global poverty and injustice and will oppose any attempt from this government to damage this country’s reputation by breaking that commitment.”
Mr Sunak is also expected to announce curbs on pay rises for millions of public sector workers.
And some Whitehall sources have indicated that he could scale back plans for a rise in the National Living Wage next April from 5% to 2%.