Rishi Sunak has announced a wave of sweeping measures to kickstart the UK economy in his mini-Budget – here’s what they are.
Announcing his Summer Statement in the Commons today, Sunak pledged to pause stamp duty, boost hiring, slash VAT, and introduce “eating out” vouchers for every person in the UK.
“Despite the extraordinary support we’ve already provided we face profound challenges. Where problems arise, we will overcome them”, said the chancellor.
Here are the key announcements in Sunak’s summer statement:
Kickstart employment scheme
The chancellor announced a new Kickstart Scheme to help under 25s making their first steps on the career ladder during the pandemic. Sunak said the current jobs crisis is the most “urgent challenge we face,” and noted that recessions almost always affect young people worst.
An initial £2bn has been made available for the Kickstart Scheme, and there will be no cap on the number of places available.
“The Kickstart Scheme will directly pay employers to create new jobs for any 16 to 24-year-old at risk of long-term unemployment,” he said in his mini-Budget today.
Job retention bonus
Businesses across sectors have voiced concern of mass unemployment when the chancellor’s Coronavirus Job Retention Scheme winds down in October.
In a bid to encourage employers to return furloughed employees to work, Sunak unveiled a new “job retention bonus programme”, which will offer a one-off £1,000 payment to businesses for each employee they reinstate to the workplace.
“Furlough has been a lifeline for millions, supporting people and businesses to protect jobs, but it cannot and should not go on forever. Leaving the furlough scheme open gives people false hope that they can return to the jobs they had before,” he said.
Sunak said there would be “no cap” on the bonuses, and that the Treasury is prepared to dish out £9bn if the UK brings back all 9m furloughed employees to the workplace.
Stamp duty holiday
The chancellor announced an emergency stamp duty holiday to help revive the UK’s beleaguered property market, which has seen a slump in new purchases during lockdown.
Sunak raised the threshold for paying stamp duty from £125,000 to £500,000, and said the scheme will be effective immediately and will run until 31 March next year.
“Property transactions fell by 50 per cent in May, house prices have fallen for the first time in eight years and uncertainty abounds in the market,” Sunak said.
“A market we need to be thriving, we need people to be feeling confident, confident to buy, sell renovate, move and improve. That will drive growth, that will create jobs.”
VAT cut for hospitality and tourism sectors
Sunak announced a slash in the VAT rate on food, accommodation and attractions from 20 per cent to 5 per cent for six months, as the government seeks to revive the UK economy after months of lockdown.
The VAT cut will run from next Wednesday until 12 January 2021. It will apply to food from restaurants, cafes and pubs and also accommodation in hotels, B&Bs, campsites, and caravan sites.
The VAT cut also includes attractions such as cinemas, theme parks and zoos.
“This is a £4bn catalyst for the hospitality and tourism sectors benefiting over 150,000 businesses and consumers everywhere,” said Sunak, adding that the new measure would help protect £2.4m jobs in the UK.
Date night discount
The government announced a 50 per cent discount for all Brits dining out in August to encourage consumers to support the hospitality sector.
Sunak today announced the new Eat Out to Help Out scheme, which will cover half the bill for sit down meals worth up to £10 per person in cafes, restaurants and pubs across the UK.
The deal will be available every Monday to Wednesday throughout August, and businesses will receive cash repayments within five working days.
“This has never been tried in the UK before,” Sunak said. “This moment is unique. We need to be creative.”
Green stimulus package
The chancellor announced plans to seize the coronavirus crisis as an opportunity to green the economy. He announced a £3bn package of green investment to help create thousands of jobs and to make public sector buildings greener.
Homeowners will receive vouchers of up to £5,000 — and £10,000 for poorer households — to pay for “green” property upgrades. The Treasury said the measure is expected to support more than 100,000 green jobs.
Sunak also pledged up to £40m for a new Green Jobs Challenge Fund to create 5,000 jobs within environmental charities and public authorities.
More than £100m of new funding has been set aside for carbon dioxide-reducing technology, with an extra £10m set aside for new electric car development projects.