Business groups call for greater job protection as PM announces Covid-19 ‘new deal’

1 Jul 2020 By Francis Churchill

More flexibility in the apprenticeship levy also needed if plans to guarantee every young person an in-work placement are to succeed, experts warn

Business groups have called for more to be done to protect jobs and boost skills as the prime minister yesterday (30 June) announced a ‘new deal’ to revitalise the economy in the wake of the coronavirus crisis.

Speaking at an event in Dudley, Boris Johnson outlined what he described as an “ambitious” plan to use the coronavirus outbreak as an opportunity to fix some of the longstanding problems the UK has faced around skills, productivity, housing and the NHS.

As well as announcing a £5bn investment plan that includes money for hospital improvements, road maintenance and new schools, Johnson also reannounced plans to guarantee every young person the opportunity to start an apprenticeship.

“This government is committed not just to defeating coronavirus but to using this crisis to tackle this country’s great unresolved challenges of the last three decades,” Johnson said. “To build the homes, to fix the NHS, to tackle the skills crisis [and] to mend the gap in opportunity and productivity and connectivity between the regions of the UK.”

However, Carolyn Fairbairn, director general of the CBI, called for a “jobs-first recovery” and warned more needed to be done to prevent unemployment. “The prime minister’s commitment to upgrade and decarbonise our transport infrastructure, in all UK regions and nations, lays strong foundations… [but] more is needed to prevent the uneven scarring unemployment leaves on communities,” she said.

“Guaranteeing apprenticeships and in-work placements are a start. Other ideas business would like to see include further wage support to protect jobs, a new jobs programme to create opportunities and more funding for future skills in high-potential areas such as digital, low carbon and health.”

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Following Johnson’s speech, chancellor Rishi Sunak announced plans to deliver an economic update on 8 July that would "[set] out the next stage in our plan to secure the recovery".

The pledge of guaranteed apprenticeship placements was welcomed by Torsten Bell, chief executive of the Resolution Foundation. He said this would help younger adults, who had been hit hardest by the coronavirus outbreak. “History tells us that this will require close collaboration with local authorities to create sufficient meaningful roles for young people to do,” he said.

But Johnson’s commitments were “a long way from being an answer to the biggest jobs crisis our country has faced in a generation”, he added: “All eyes are now on the chancellor to deliver a much more significant plan to drive the recovery in the months and years ahead.”

Tania Bowers, head of public affairs at The Association of Professional Staffing Companies, also raised concerns about how Johnson’s guaranteed apprenticeship pledge would work within the limitations of the apprenticeship levy. “Despite millions of people on furlough or out of work and looking for new employment opportunities, businesses can’t use their apprenticeship levy pots to fund training for these individuals,” she said.

“The government needs to look urgently at proposals to broaden the use of the apprenticeship levy and to ring fence monies in levy pots for use in national training programmes.”

Bowers added that, while providing entry-level apprenticeships for young people was “laudable”, there was also a shortage of higher-level and professional skills needed to deliver the prime minister’s infrastructure goals. She said this was exacerbated by uncertainty over future immigration rules, with the UK’s transition period with Europe finishing at the end of this year.

“The government’s post-Brexit immigration bill has no visa route for independent professionals,” said Bowers. “This is a crucial point because with skills shortages across many high-skilled sectors such as engineering, technology and construction, we need an immigration system that recognises that the UK’s ability to deliver on its recovery pivots on access to skills and a flexible workforce.” 

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