Chancellor Rishi Sunak has announced a series of measures designed to stimulate an economy recovery following a prolonged lockdown forced upon the country by the Covid-19 outbreak.
In just 30-minutes, the Chancellor announced funding to the tune of an estimated £30-billion, with a series of measures focused on safeguarding jobs, stimulating youth employment and a wide range of measures targeted at the hardest hit sectors during the Coronavirus outbreak.
These measures are summarised below and further information will be made available on this website when the application process for businesses is announced in the coming days and weeks.
The headline measure was an unprecedented job retention scheme bonus in which employers who continue to employ (as opposed to making redundant) furloughed staff members will receive a £1,000 bonus per head.
Conditions do apply to this extraordinary offer, in that the member of staff must have been furloughed at any point and must earn over £520 per month to the end of January 2021, when the bonus can be claimed.
A kick-start scheme of some £2-billion was announced to fund a six-month work placement for 16 to 24-year-olds on universal credit at the present time.
This represents an opportunity for employers to ‘give a chance’ to young people most at risk of long-term unemployment.
The funding available to employers will cover the national minimum wage for 25 hour per week in addition to any employer’s national insurance and pension contributions.
There will also be a £1,000 grant per trainee for employers who employ new trainees aged 16 to 24 and a £2,000 grant for employers per apprentice under 25 hired.
Any apprentices hired over 25 will receive £1,500. The scheme will commence in August 2020 and the apprentices must be employed for a minimum period of six months.
Sector Specific Measures
Targeted assistance was also announced for the hospitality sector – one of the hardest hit by the lockdown – with a six month VAT cut from 20% to 5% for restaurants, pubs, cafes, hotels, attractions, et hoc genus omne, effective from 13 July to 12 January 2021.
However, the Chancellor has not extended this VAT cut to alcoholic drinks consumed in such establishments – but non-alcoholic drinks, hot food and such like will be covered.
Another unprecedented measure designed to assist this sector was the announcement of the ‘eat out to help out’ vouchers, giving diners a 50% reduction on their meals out during the mid week from Monday to Wednesday in August (capped at £10 per head).
The domestic housing market is another sector significantly affected by the crisis. The Chancellor has taken steps to remedy this situation by immediately removing stamp duty on properties up to £500,000 (the threshold was previously only £125,000).
This will be effective from today (08 July) until 31 March 2021. This is likely to remove stamp duty from around 90% of house sales.
There was also targeted measures for the green sector, with a green home grant made available up to a maximum of £5,000 per household (extended to £10,000 for low income households on a fully funded basis).
This will be set aside for energy efficiency measures on a partial match funding basis, in which the grant will provide £1 for every £2 spent by the household up to the maxima.
Our expert Clare Thompson, senior partner, provided her assessment immediately after the Chancellor concluded his speech:
The Chancellor’s intentions were abundantly clear – to kick-start the floundering economy after three months of relative inactivity.
This was not about looking backwards and relying on previous interventions – no extensions to the furlough scheme, bounce back loans or business grants.
Instead, it looked forward with a range of focused measures designed to stimulate economy activity and safeguard jobs.
There’s targeted support for sectors hardest hit by the crisis and particular measures for the most precarious employment groups.
It is now up to us, as business leaders, entrepreneurs and employers, to heed the Chancellor’s encouragement and pump prime the economy.
If you have any questions regarding the measures announced and how these may benefit your business, please contact our expert team for assistance.