By Grahame Anderson
In his Covid-19 mini-budget the Chancellor Rishi Sunak announced a series of measures worth £30billion in the House of Commons on Wednesday.
This crucial statement was delivered at a time he conceded the UK faces “profound economic challenges”, given the economy contracted by 25 per cent in two months.
Several Major Schemes
His plan to rescue the economy in the light of the coronavirus crisis includes several major schemes including a new £2bn plan to create thousands of job placements for young people. In delivering this pledge the Chancellor said the Government will pay 100 per cent of the minimum wage for 25 hours, for those aged between 16 and 24 who have been hired under the scheme.
To further reinforce this, the Chancellor made a pledge to provide 30,000 new traineeships for young people in England, giving firms £1,000 for each new work experience place they offer, including work in high-demand sectors such as engineering, construction and social care.
He offered a £1.6bn package of loans and grants for the arts and heritage sector. There will be a doubling of front line staff at job centres, as well as an extra £32m for recruiting extra careers advisers, plus £17m for work academies in England. And employers will not have to pay any tax on coronavirus swab tests provided for their staff.
Job Retention Bonus
Explaining the “jobs retention bonus”, created to save the jobs of furloughed workers, Mr Sunak said: “If you’re an employer and you bring back someone who was furloughed – and continuously employ them through to January – we’ll pay you a £1,000 bonus per employee.”
This could potentially cost the treasury £9billion.
The Chancellor said he wants to get pubs, restaurants, cafes and B&Bs “bustling again”.
As such, there is also a reduction in VAT from 20 to five per cent from July 15 until January 12. This is could protect 2.4 million jobs in a £4billion catalyst for the sector. This also covers hotels, B&Bs, caravan sites, and attractions such as cinemas, theme parks and zoos.
Next month, everyone will be given an “eat out to help out” discount offering 50 per cent off up to a maximum discount of £10 per head at participating restaurants, cafes and pubs from Monday to Wednesday. Businesses will be able to claim the money back, receiving it in five working days.
Stamp Duty Holiday
Mr Sunak also announced the stamp duty threshold will go up temporarily from £125 to £500K until the 31st of March next year. This means the average bill will fall by £4.5K, with nine out of 10 people buying a main home paying no duty at all. To go along with this he unveiled £3billion worth of measures including a voucher driven ‘green homes grant’, available to owners and landlords with the aim of making more than 650,000 homes more energy efficient and supporting 140,000 jobs. £1billion of this has been set aside to include public sector buildings.
The Government’s furlough scheme will wind down in October.
The Chancellor ended his speech by saying: “This has never just been a question of economics, but of values: I believe in the British people’s fortitude and endurance.
“And it is that value, endurance, more than any other, we need to embody now.
“We will not be defined by the crisis but our response to it.”
He cites the government’s plan is “a plan to turn our national recovery into millions of stories of personal renewal.”
In response to his statement Shadow Chancellor Anneliese Dodds said: “Our country has been through a great deal over these past few months. Hundreds of thousands have wrestled with this terrible disease. For many months, people have had to go without being able to embrace their loved ones – even to say goodbye. Tens of thousands have died. Our NHS, social care and other workers have made extraordinary sacrifices. We owe them so much.
“The Government has had to take big decisions too. We acknowledge that. But today, Mr Speaker, should have been the day, when our Government chose to build a bridge – between what has been done so far and what needs to be done to get our economy moving again.
“It should have been the day when the millions of British people worried about their jobs and their future prospects had a load taken off their shoulders. It should have been the day when we got the UK economy firing again.
“Today, Britain should have had a back-to-work Budget; but instead, we got this summer statement with many of the big decisions put off until later as the benches opposite know full well.”