Queen's Speech 2021 - Support for Living Standards and Plan for Jobs

“My Government’s priority is to deliver a national recovery from the pandemic that makes the United Kingdom stronger, healthier and more prosperous than before...Following the unprecedented support provided to businesses during the pandemic, proposals will be brought forward to create and supportjobs...”

• The Government is committed to supporting household living standards during this difficult time. That is why the Government announced an unprecedented package of support - including boosts to Universal Credit, the Coronavirus Job Retention Scheme, and the Self-Employment Income Support Scheme - helping to protect incomes, jobs, and to support those most in need.

• These interventions have supported the poorest working households the most (as a proportion of income).

  Work and Plan for Jobs

  • This Government champions the principle of work as the best route out of poverty and towards financial independence. This approach is based on clear evidence about the importance of employment, particularly where it is full-time, in substantially reducing the risks of poverty and in improving long-term outcomes for families and children.

  • We have protected jobs throughout COVID-19. The Coronavirus Job Retention Scheme - which runs until September 2021 - has helped to pay the wages of 11.5 million people across the country, with more than £61.3 billion paid out in grants across the UK. The Self-Employment Income Support Scheme has paid out almost £20 billion in grants to 2.7 million self-employed individuals whose businesses were adversely affected by COVID-19, one of the most generous self- employment COVID-19 income support schemes in the world.

  • As part of our flagship Plan for Jobs, the Government invested £30 billion in measures to create, support and protect jobs, including increasing the number of Work Coaches by 13,500 in our Jobcentre offices. This year, the Government is providing £3.6 billion additional funding to continue to support people who unfortunately lose their jobs, helping them search for work or to retrain.

  • We have targeted support for young people: the Kickstart Scheme will create hundreds of thousands of new, fully subsidised jobs for 16-24 year olds on Universal Credit at risk of long-term unemployment. With £2 billion of funding, Kickstart has the potential to support over 250,000 young people.

  • For those on Universal Credit, who have been searching for work for over a year, the Spending Review introduced the new £2.9 billion Restart programme. This new three-year programme will provide intensive and tailored support to over 1 million people and help them find work.

• Around two million of the UK’s lowest-paid workers will benefit from the increases in the National Living Wage and National Minimum Wages. On 1 April 2021, the National Living Wage increased by 2.2 per cent to £8.91 an hour, an increase in annual earnings of over £345 extra for someone working full-time.

Key facts

• As of 14 April 2021, there have been 11.5 million jobs supported by the Coronavirus Job Retention Scheme since its inception. A total of 1.3 million employers have made a claim through the scheme since it started in March 2020, totalling £61.3 billion in claims.

• The Self-Employment Income Support Scheme has supported 2.7 million people. The fourth and fifth SEISS grants are an estimated £13.5 billion of additional support, taking total support for the self-employed to over £33 billion since the start of the pandemic.

• So far, over 195,000 Kickstart jobs have been created.

• Restart will provide intensive, tailored support to over 1 million unemployed people

• The Government has successfully recruited 13,500 additional work coaches since March 2020.

• Distributional analysis published for the 2021 Budget showed that in 2021-22 (even when excluding spending in response to COVID-19) tax, welfare and spending decisions made since Spending Round 2019 have benefitted all households, with the poorest gaining the most as a percentage of net income.Our modelling also shows that:

o The poorest 60 per cent of households receive more in public spending than they contribute in tax.

o Households in the lowest income decile will receive more than £4 in public spending for every £1 they pay in tax on average.

• Between November 2020 and January 2021, the unemployment rate for 18-24 year olds was 13.2 per cent compared to 5 per cent for the overall population of people aged 16+.

• The Office for Budget Responsibility estimated that without the short-term fiscal easing announced in the Budget, and in particular the extension to the Coronavirus Jobs Retention Scheme, the forecasted unemployment figure of 2.2 million in the fourth quarter of 2021, would have been higher by 300,000.

• For the first time, 23 and 24 year olds are now eligible for the National Living Wage, meaning a 23 year old who was previously working on the National Minimum Wage saw a 8.7 per cent increase in their hourly pay.

Support for individuals

This Government is committed to supporting people on lower incomes; even before the pandemic, in 2020-21 estimated spend on welfare support for people of working age and children was over £105 billion, with an additional £7.4 billion of COVID-19 related welfare policy measures, this increased to over £112 billion.

In March 2020, the Government announced a temporary £20 per week uplift in Universal Credit which was extended by six months at the 2021 Budget. The Government also provided similar support for eligible Working Tax Credit claimants through a one-off £500 payment in April 2021.

In September 2020, the Government announced the Test and Trace Support Payment, a one-off £500 payment to help people on low-incomes to self-isolate when they either test positive for COVID-19 or are identified as having been in contact with someone who has tested positive. To date, the Government has provided £176 million to Local Authorities to administer the scheme and make payments - including £75 million for discretionary payments according to Local Authorities’ own criteria.

The Government set up the £170 million COVID Winter Grant Scheme, which has enabled Local Authorities in England to provide targeted support with food and bills to families and the most vulnerable. The Government has recently extended this scheme beyond Winter until 20 June 2021, and renamed it the COVID Local Support Grant. This brings the scheme in line with the Prime Minister’s roadmap out of lockdown.

The Government has also established a £220 million Holiday Activities and Food Programme to provide enriching activities and a healthy meal for disadvantaged children in the Easter, Summer and Christmas holidays.

The Government has spent around £3.6 billion in early educational entitlements to support families with their childcare costs in 2020-21. Since 2010, all three and four year olds have been able to access 15 hours of early education a week. In 2013, we also introduced 15 hours of free early education a week for disadvantaged two year olds. In 2017, we doubled the free childcare available for eligible working parents of three and four year olds to 30 hours a week.

The Government will bring forward a Health and Disability Green Paper on continuously improving the support offered to disabled people whilst laying the foundation for sustainable reform. The National Strategy for Disabled People will set out practical changes for disabled people that remove barriers and increase opportunity.

In March 2020 we raised the Local Housing Allowance rates to the 30th percentile of local rents, and have maintained these rates at the same cash level this financial year. This is an extra investment of almost £1 billion in 2020-21 and 2021-22 into the welfare system providing more support for renters.

Key facts

• In the first two months of the COVID Winter Support Grant, covering December 2020 and January 2021, Local Authorities spent over £86 million, with 94 per cent awarded to support families with children and 96 per cent used on the provision of food and to support utility bills. In the same period, nearly 2.4 million awards were made to vulnerable households through the scheme.

• This year's expanded Holiday Activities and Food programme will be available to children in every Local Authority in England, building on previous programmes since 2018 - including last year’s summer programme, which supported around 50,000 children across 17 Local Authorities.

• In 2019-20, there were over a million fewer people in absolute poverty, after housing costs compared with 2010; and around 700,000 fewer people in poverty, before housing costs than in 2010.

• The changes in Local Housing Allowance have benefitted over 1.5 million households who have gained just over £600 per year on average in additional support, while for people renting in the highest demand areas the gain will be even higher, for example, around 500,000 people had an increase of more than £100 per month.

• In April 2021, a payment to employers in England for each new apprentice hired was increased to £3,000 regardless of the apprentice’s age. The payment can be claimed until 30 September 2021.

  Cost of Living

• This year, we have increased the National Living Wage to £8.91 - an annual pay rise of almost £350 for someone working full time on the National Living Wage. For the first time since it came into effect in 2016 more younger people will be eligible as the age threshold will be lowered from 25 to 23 years old.

• We know transport is a major cost for families and businesses - so for the eleventh year running we have kept fuel duty frozen for 2021-22, saving the average car user a cumulative total of £1,600 compared to the pre-2010- escalator.

• We know transport is a major cost for families and businesses - so for the eleventh year running we have kept fuel duty frozen for 2021-22, saving the average car user a cumulative total of £1,600 compared to the pre-2010- escalator.

• We have introduced tax-free childcare worth up to £2,000 per child per year.

• The Government is taking a range of measures to help people get onto the housing ladder and to help families move home:

o The Stamp Duty Land Tax Holiday increased the threshold for Stamp Duty from £125,000 to £500,000 until 30 June 2021 in England and Northern Ireland. After that, the threshold will drop to £250,000 from 1 July before returning to the standard rate of £125,000 from 1 October 2021.

o The Affordable Homes Programme, announced at Budget last year, will deliver the largest cash investment in affordable housing for a decade, providing up to 180,000 new homes across the country, and delivering more social housing than the Programme’s predecessor.

o At Spending Review 2020 the Government announced a National Home Building Fund, with initial funding of £7.1 billion over the next four years to unlock up to 860,000 homes.

• Alcohol Duties will be frozen across the board for the second year running, saving drinkers £1.7 billion.

Key facts

• We have increased the National Minimum Wage and Living Wage every year since they were introduced, supporting the lowest paid. Successive rises mean someone working full time on the National Living Wage from April 2021 will be earning £5,400 more annually than they were in 2010.

• Across the UK, the 2021-22 fuel duty freeze saves the average car driver a cumulative total of £1,600 compared to the pre-2010 escalator. We are proud the Government has legislated to reach net zero emissions by 2050, and future fuel duty rates will be considered in that context.

We are investing £11.5 billion in the new Affordable Homes Programme, bringing total funding for affordable homes to £12.2 billion from 2021-22. This is the largest cash investment in affordable housing for a decade.