A range of measures to boost the UK economy in the wake of the Covid-19 pandemic has been announced by Chancellor Rishi Sunak. They include VAT cuts for the hospitality sector, a Job Retention Bonus for companies, a Stamp Duty Land Tax cut and an ‘Eat Out to Help Out’ discount.
In a statement to the House of Commons, the Chancellor outlined plans to give businesses a £1,000 bonus for every employee it brings back from the furlough scheme and employs them from November to January on a salary of at least £520 a month.
The Chancellor said that if all nine million people are brought back to work, it would result in £9bn being paid out by the government.
A new programme, the Kickstart Scheme, will give hundreds of thousands of young people, in every region and nation of Britain, the best possible chance of getting on and getting a job, said the Chancellor. It will directly pay employers to create new jobs for any 16 to 24-year-old at risk of long-term unemployment. These will be new jobs – with the funding conditional on the firm proving these jobs are additional.
These will a minimum of 25 hours per week paid at least the National Minimum Wage – with employers providing Kickstarters with training and support to find a permanent job. If employers meet these conditions, the Government will pay young people’s wages for six months, plus an amount to cover overheads. That means, for a 24-year-old, the grant will be around £6,500.
Employers can apply to be part of the scheme from next month, with the first Kickstarters in their new jobs this autumn. Various other incentives to take on apprentices were also announced.
From Wednesday next week (15 July) until 12 January 2021, VAT for the hospitality sector will be cut from 20 per cent to 5 per cent on food, accommodation and attractions. It will apply to the likes of restaurants, pubs, hotels, caravan and leisure parks, cinemas and zoos.
The Nil Rate Band of Residential SDLT (Stamp Duty) will be temporarily increased from £125,000 to £500,000 until 31 March 2021, with immediate effect.
Sunak also announced that every person in the UK would get an ‘Eat Out to Help Out’ discount of 50 per cent off, up to £10 per head, in August if they go for a meal between a Monday and a Wednesday.
The Chancellor said his plan was designed to support jobs by focusing on skills and young people.
“Throughout this crisis I have never been the prisoner of ideology,” Sunak said. “For me, this has never just been a question of economics, but of values.
“We believe in the nobility of work. We believe in the inspiring power of opportunity. We believe in the British people’s fortitude and endurance.
“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.”
There will be a full Budget in the autumn in which the Chancellor will give a far more detailed analysis of the economy with no doubt some significant tax changes.