Summer Economic Statement: Measures to save jobs
Thursday, 06 August 2020
As the debt stacks up, it’s clear that the Government is prepared to spend to save the economy. Many of the measures announced in July by The Chancellor, Rishi Sunak, are intended to get us doing just that – spending, either on the smaller items such as eating out, or to kick-start the housing market.
The Chancellor also announced a package of measures to support jobs in every part of the country, to give businesses the confidence to retain and hire, and provide people with the tools they need to get better jobs.
The plan for jobs is the second part of a three-phase plan to secure the UK’s economic recovery from coronavirus. Throughout the pandemic, the UK Government has acted with speed to protect lives and safeguard jobs.
The first stage was a £160 billion support package, which included £49 billion of extra funding for the country’s vital public services including the NHS, paying the wages of nearly 12 million people and supporting over a million businesses through grants, loans and rates cuts.
As the UK enters the second phase in its recovery, the Chancellor’s plan focused on the following:
- Supporting jobs with a Kickstart scheme to help young people
- Creating jobs with investment in shovel-ready projects and greening our infrastructure
- Protecting jobs through a VAT cut for the hospitality sector and an Eat Out to Help Out discount scheme for diners
The Chancellor of the Exchequer, Rishi Sunak, said:
“Our plan has a clear goal: to protect, support and create jobs. It will give businesses the confidence to retain and hire. To create jobs in every part of our country. To give young people a better start. To give people everywhere the opportunity of a fresh start.”
The Chancellor said that following this second phase focusing on jobs, there will be a third phase focusing on rebuilding, with a Budget and Spending Review in the autumn.
A Job Retention Bonus has been introduced to help firms keep furloughed workers. Employers will receive a one-off bonus of £1,000 for each furloughed employee who is still employed as of 31 January 2021. Read our blog on the scheme here.
A new £2 billion Kickstart Scheme will also be launched to create hundreds of thousands of new, fully subsidised jobs for young people across the country. Those aged 16-24, claiming Universal Credit and at risk of long-term unemployment, will be eligible. Funding available for each six-month job placement will cover 100% of the National Minimum Wage for 25 hours a week – and employers will be able to top this wage up.
A total of £1.6 billion will be invested in scaling up employment support schemes, training and apprenticeships to help people looking for a job. Young people, who are amongst the worst hit by the crisis, will benefit from this.
The plan is intended to create tens of thousands of jobs through bringing forward work on £8.8 billion of new infrastructure, decarbonisation and maintenance projects.
As part of this package, homeowners and landlords in England will be able to apply for vouchers from a £2 billion Green Homes Grant scheme this year to pay for green improvements such as loft, wall and floor insulation, that could save some households hundreds of pounds a year on their energy bills while creating thousands of jobs for tradespeople.
In addition, a £1 billion programme will make public buildings, including schools and hospitals, greener, helping the country meet its ambitions of achieving Net Zero by 2050, whilst investing in our future prosperity.
A further £5.8 billion will be spent on shovel-ready construction projects to get Britain building. This includes hospital maintenance and upgrades, local roads network, over £1 billion to start to rebuild schools in the worst condition in England, plus £760 million this year for key maintenance work on schools and Further Education colleges.
The tourism and hospitality sectors are massive employers in the UK and have been severely impacted by the pandemic due to necessary closures to protect public health. Eighty percent of hospitality firms stopped trading in April and 1.4 million hospitality workers have been furloughed; the highest proportions of any sector.
To encourage people to safely return to eating out at restaurants, the Government’s new Eat Out to Help Out discount scheme will provide a 50% reduction for sit-down meals in cafes, restaurants and pubs across the UK from Monday to Wednesday every week throughout August 2020.
The rate of VAT applied on most tourism and hospitality-related activities has also been cut from 20% to 5%. This, together with the Eat Out to Help Out Scheme, will support over 2.4 million staff at over 150,000 businesses, helping them recover and reopen after the COVID-19 lockdown. It’s hoped this will give these businesses the confidence to maintain their staff, as more people get through the door and business activity starts again.
The Government also wants people to feel confident to move, buy, sell, renovate, and improve their homes. So, it’s introducing a temporary increase to the Nil Rate Band of Residential SDLT (Stamp Duty) from £125,000 to £500,000 until 31 March 2021.
The key points from the Summer Economic Statement can be downloaded from the MHA Larking Gowen COVID-19 hub.
If you have any queries or would like more information, please get in touch with your usual MHA Larking Gowen contact. You can find contact details on the Our People section of the MHA Larking Gowen website. Alternatively, call 0330 024 0888 or email email@example.com.