Chancellor Rishi Sunak will commit more than £500m in fresh funding to help people back into work as he seeks to stem the continuing turbulence of the coronavirus pandemic.
Sunak is shifting the focus onto getting people into new or better jobs as the Government comes under sustained pressure over a major squeeze on living standards.
He will use his speech at the Tory conference in Manchester on Monday to set out his vision of shaping the economy around “the forces of science, technology and imagination”.
The chancellor 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 furlough scheme and unemployed over-50s back into work, while the “kickstart” scheme for young people will also be extended.
But he has resisted expanding all of the support announced during the pandemic, with the furlough scheme ending and the £20-a-week uplift to Universal Credit falling away.
Labour said extending 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”.
Fresh warnings of hardship have also been issued over the rise of the energy price cap and price hikes in shops.
Household budgets will sustain a further blow next April when national insurance contributions rise by 1.25% to help fund the NHS and social care.
Ahead of his first in-person speech at the conference as chancellor, Sunak said he is “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 is “experiencing one of the strongest and fastest recoveries of any major economy in the world”.
He added: “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 helping young people on Universal Credit will be extended to March next year under the measures.
The £3000 incentive for new apprentices will be extended until the end of January.
Individuals 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 £500m of new funding will be used, coming from the education and the work and pensions departments. Further details will be set out in the upcoming spending review.
Shadow work and pensions secretary Jonathan Reynolds said: “The Government’s struggling plan for jobs has 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.
“Giving himself an extended deadline will do nothing to compensate for the chancellor’s tax rises, cost of living crisis and cuts to Universal Credit which are set to hammer millions of working families.”
Matthew Fell, the chief policy director at the Confederation of British Industry, said: “Businesses will 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.
“Businesses are committed to playing their full part in training and re-skilling the workforce of tomorrow as we move towards a new economy.”
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