Key measures in today’s Summer Economic Update at a glance
Compiled by Newgate Public Affairs
Employment and skills
The Chancellor announced that his plan is designed to support jobs by focussing on skills, create jobs with investment and protect jobs through tax cuts. The key initiatives on supporting jobs are as follows:
- End of furlough: Confirmation that the furlough scheme will end in October.
- Job Retention Bonus: A new policy of a Jobs Retention Bonus to encourage firms to keep on furloughed workers. Employers will receive a one-off bonus of £1,000 for each furloughed employee who is still employed as of 31 January 2021.
- Kickstart Scheme: A new Kickstart Scheme to provide subsidised jobs for young people (16-24 year olds) who are at risk from long-term unemployment. The government will fund job placements (for National Minimum Wage for 25 hours a week) for six months.
- Apprenticeships: Firms will be given £2,000 for each new apprentice they hire under the age of 25. This will be in addition to existing schemes.
- Traineeships: Additional funding to increase traineeships and work academy placements.
- Career advice: Additional funding for the National Careers Service to provide personalised advice on training and work.
- Long-term unemployed support: An extra £1bn funding for the Department for Work and Pensions (DWP) to help for long-term unemployed.
Property and Housing
- Stamp duty holiday: A stamp duty holiday for the first £500,000 of all England and Northern Ireland property sales. The measure comes into effect as of today (8th July) and will last until 31 March 2021. This, according to Sunak, should mean that the average stamp duty bill will fall by £4,500, and potentially 9 out of 10 people buying a home this year will pay no stamp duty.
- Brownfield Housing Fund: A £400m Brownfield Housing Fund to seven Mayoral Combined Authorities to bring forward land for development and “unlock” 24,000 homes in England. 90% of the fund will be allocated immediately on a per capita basis, with 10% to be allocated through a competitive process.
- Short-Term Home Building Fund extension: The government will support small-and medium-sized housebuilders that are unable to access private finance by boosting the Short-Term Home Building Fund, providing an additional £450 million in development finance to smaller firms. This is expected to support around 7,200 new homes in England.
- Planning reform (“Project Speed”): In what was announced in Derby by the Prime Minister last week, new regulations will make it easier to convert buildings for different uses, including housing, without the need for planning permission. Later this month, the government will launch a policy paper setting out its plan for comprehensive reforms of England’s planning system.
- Energy efficiency: £2bn will be provided to support homeowners and landlords in making their homes more energy-efficient in 2020-21. This could potentially support over 100,000 green jobs and provide up to £5,000 per household (and £10,000 per household for those on lowest incomes). There is also a £1bn scheme for making public sector buildings more energy efficient, including schools and hospitals.
- Construction Talent Retention Scheme: This will support the redeployment of workers at risk of redundancy and will help retain construction skills and match talented workers to opportunities across the UK.
Hospitality sector support
- VAT cut: As of next week, VAT is reduced from 20% to 5% on food and drink to get pubs, restaurants, cafes and B&Bs “bustling again”. VAT will also be reduced for the hospitality and tourism sectors, from the 15th July 2020 until 12th January 2021 (also from 20% to 5%).
- Eat Out to Help Out: This will entitle every diner to a 50% discount of up to £10 per head on their meal, at any participating restaurant, café, pub or other eligible food service establishment. The discount can be used unlimited times and will be valid Monday to Wednesday on any eat-in meal (including on non-alcoholic drinks) for the entire month of August 2020 across the UK. Participating establishments will be fully reimbursed for the 50% discount.