Latest update from the Summer statement
On Wednesday 8th July, the Chancellor Rishi Sunak announced his Summer statement to provide further support to the UK economy in the wake of the impact of Coronavirus.
With the deepest recession being recorded since records began and the UK economy contracting by 25% in just two months a lot needs to be done to ensure a bounce back and to protect jobs. The Summer statement was all about jobs, jobs, jobs as predicted.
The Coronavirus Job Retention Scheme (CJRS) cannot go on forever, so as previously confirmed it will wind down gradually and end in October 2020. However, the Chancellor announced a new Job Retention Bonus scheme for those returning to work from the CJRS. The Government will pay £1,000 to all businesses for each member of staff still employed until January 2021 who are earning a minimum average salary of £520 per month.
700,000 students will be leaving education this year and entering the job market in the toughest economy the UK has ever faced, the Chancellor has developed a ‘kickstart’ scheme for 16-24 year olds whereby the Government will pay their wages (minimum wage) for six months (from next month) to all businesses who employ a young person for at least 25 hours per week.
Traineeships will see employers paid £1,000 to take on new trainees, and any businesses which create new apprenticeships will receive £2,000 per apprentice for those under 25 and for those over 25 they will receive £1,500.
The Department of Work and Pensions will receive an extra boost of over £1billion with a variety of initiatives being planned to include the number of work coaches doubled and more.
Investment in infrastructure was key in the statement with a green recovery planned. £2billion will be made available for a green homes scheme where homeowners can apply for a voucher to cover 2/3 of the cost to make their home more energy efficient and low-income families receiving the full amount up to £10,000. There will also be improvements in public sector buildings to make them more energy efficient in a target to cut carbon.
Property transactions fell by 50% in May and with house prices beginning to fall the threshold for stamp duty will temporarily be increased to transactions under £500,000 (effective immediately) until 31 March 2021, this will reduce the average bill by £4,500.
The hospitality and tourism industry has been severely affected with 80% of hospitality businesses stopping trading, to get this sector bustling again the Chancellor will be reducing VAT from 20% to 5% for the next six months on food, accommodation and attractions. For the first time ever, the Government also introduced a ‘eat out to help out’ voucher that will give diners 50% off all restaurant bills throughout August (Monday to Wednesday) up to £10 per head.
Sean Daniel, Managing Director said “This statement was very much about creating and protecting jobs. We are glad to see a number of initiatives announced to help the job market and in particular the property and hospitality industries who have been severely impacted”.