The British chancellor of the exchequer is set to announce more than £500 million ($677m) in new funding to help people back into work, as he seeks to stem the continuing fallout of the coronavirus pandemic.
Rishi Sunak is said to be shifting the focus to getting people into new or better jobs, as the UK government comes under sustained pressure over a major squeeze on living standards.
He will use his speech at the Conservative Party conference in Manchester, northern England, on Monday to set out his vision of shaping the economy around “the forces of science, technology and imagination”.
Mr Sunak will pledge to “make the United Kingdom the most exciting place on the planet” through enhanced infrastructure, improved skills and scientific investment.
He will announce the new funding will be used to help workers leaving the government's furlough scheme, which supported jobs during the pandemic, and unemployed over-50s back into work, while the Kickstart scheme for young people will also be extended.
But he has resisted extending all extra support provided during the pandemic, with the furlough scheme ending and the £20-a-week uplift to Universal Credit benefits falling away.
The opposition Labour Party said the schemes “will do nothing to compensate” for the tax rises and the cost of living crisis, but businesses welcomed the “pivoting from furlough to economic recovery”.
New warnings of hardship have also been issued over the rise of the energy price cap and price rises in shops.
Household budgets will sustain a further blow next April when national insurance contributions rise by 1.25 per cent to help fund the National Health Service and social care.
Ahead of his first in-person speech at the conference as chancellor, Mr Sunak said he was “ready to double-down” on his promise to “do whatever it takes” to recover from Covid-19.
He said the furlough scheme protected 11 million jobs and the UK was “experiencing one of the strongest and fastest recoveries of any major economy" in the world.
“But the job is not done yet and I want to make sure our economy is fit for the future, and that means providing the support and skills people need to get into work and get on in life.”
The Kickstart scheme, which helps young people on Universal Credit, will be extended to March next year under the measures.
A £3,000 incentive for new apprentices will be extended until the end of January.
People who have come off furlough and are on Universal Credit will also be prioritised for help to find jobs under the “job finding support” scheme, lasting until the end of the year.
The Treasury said more than £500 million of new funding would be used, coming from the education and work and pensions departments. Further details will be set out in the next spending review.
Mr Sunak said the government wanted to pave the way for an economy with higher wages and more people in high skills jobs.
The chancellor of the exchequer said he wanted people to know that “we are throwing literally the kitchen sink at helping them get a new job, new skills, new opportunities”.
Asked about the 1.25p rise in National Insurance for employees, employers and the self-employed, he told Sky News that ministers decided to take the “difficult but, I believe, responsible decision” to plug the black hole in social care funding.
He declined to rule out further tax rises, including council tax, before the end of the year.
Jonathan Reynolds, Labour's work and pensions spokesman, said the government’s struggling plan for jobs had failed to hit its original targets.
"It is not creating the number of jobs needed and has failed to address the supply-chain crisis Britain is experiencing."
Hitting out at the chancellor of the exchequer, he said, “giving himself an extended deadline will do nothing to compensate for the Chancellor’s tax rises, a cost-of-living crisis and cuts to Universal Credit which are set to hammer millions of working families”.
Matthew Fell, chief policy director at the Confederation of British Industry, said businesses would welcome the chancellor’s plan for jobs pivoting from furlough to economic recovery.
“With record vacancies and widespread labour shortages, this package’s success will be measured by its ability to get people back into work," he said.
“Businesses are committed to playing their full part in training and re-skilling the workforce of tomorrow as we move towards a new economy."