Chancellor Kickstarts UK Economy

View of Houses of Parliament across bridge and river thames

Chancellor Rishi Sunak has today detailed further plans to kickstart the UK economy, saying that avoiding further job losses is the “most urgent” challenge that the country now faces, and that the priority is to “get as many people as possible from furlough back to their jobs”.

The Chancellor’s ‘Plan for Jobs’

There are a number of measures which have been announced today including:

  • Stamp Duty – a temporary change to stamp duty has been announced with immediate effective increasing the threshold to £500,000.
  • Green Homes Grant – a £2bn green homes grant to help make homes more energy efficient
  • VAT Cut – for eat-in or hot takeaway food and non-alcoholic drinks
  • Job Creation – a £2b scheme to create thousands of job placements for young people
  • Job Retention – giving £1,000 to businesses who bring back employees from furlough

Stamp Duty

Being referred to as the ‘Stamp Duty Holiday’, a rise in the threshold from £125,000 to £500,000 applicable from midnight last night means that anyone completing on a house purchase today will still benefit. The difference could be worth nearly £15,000 for a property priced at just under the top limit. Those purchasing something pricier will still get the benefit of the cut. Stamp duty is payable on house prices above £500,000 at a rate of 5% raising to 10% and 12% for the most expensive homes.

Green Homes Grant

Meanwhile, the funding of £2bn for Green Home Grants will help to unlock work for thousands of plumbers, builders and tradespeople. Sunak has said that homeowners may apply for vouchers through the scheme to make their homes more energy efficient. The grants will cover at least two-thirds of the cost of the work, up to a limit of £5000 per home to pay for at least two-thirds of green improvements such as loft, wall and floor insulation. Whilst low-income households will be eligible for vouchers covering the full cost of the work up to £10,000.

VAT Cut

To support the hospitality sector which has been hit particularly hard since March, VAT for the hospitality in food, accommodation and attractions will be cut from 20% to 5% until 12 January 2020. This means the VAT on eat-in or hot take-away food and non-alcoholic drinks.

“The best job programme we can do is to restart these sectors and get restaurants, pubs, hotels and B&Bs bustling again. We are doubling down on our ambition to level up, with better roads, better schools, better hospitals, better high streets.”

Sunak also announced details of the ‘Eat Out to Help Out’ scheme to begin in august. This will provide everyone with a 50% discount to use in participating restaurants from Monday to Wednesday, with a value of up to £10 per person.. Businesses serving food will need to register before the start of August and customers will have the discount applied to their bill automatically – a family of four could save up to £40. The other half of the bill will be covered by the government

Job Creation

The £2bn jobs creation scheme for the under 25s is intended to help vulnerable young workers who have been hit harder than any other age group during the pandemic. Companies will be able to start making applications for the six-month work placement scheme – for people aged between 16 and 24 who are claiming universal credit – over the next month, with the first young people starting work in the autumn. The state will fund each placement, covering 100% of the national minimum wage for 25 hours a week.

“We know that youth unemployment has a long-term impact on jobs and wages and we don’t want to see that happen to this generation. So we’ve got a bold plan to protect, support and create jobs – a Plan for Jobs.”

Job Retention

The government has announced a new policy to reward and incentivise employers who bring furloughed staff back to work from today. Employers doing so and continuously employing those individuals through to January 2021 will be paid a £1000 bonus per employee. The member of staff must be paid, on average, at least £520 in each month from November to January. There is no limit to the number of employees brought back into work from furlough, so long as the minimum criteria is met.

To find out what the Chancellor’s announcements mean for you, visit the BBC website at: https://www.bbc.co.uk/news/business-53334083.

 

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