Chancellor puts jobs centre stage in economic recovery

Chancellor of the Exchequer Rishi Sunak made his long-awaited “summer economic statement” earlier today, and employment was the overriding theme. Sunak said that the government would do “all we can” to help prevent job losses due to the coronavirus pandemic, adding that “no one will be left without hope”. Sunak praised the national response to the crisis, saying that the United Kingdom was “truly united” and highlighted areas in which government intervention had already protected British people’s incomes. He then went on to detail what comes next – all part of Prime Minister Boris Johnson’s promise of a “new deal” to rebuild the economy as the prospect of more unemployment looms.

The Chancellor announced the winding down of the government’s furlough scheme (ending in October) and the creation of a new £9 billion policy to protect jobs. Businesses will be paid a bonus of £1,000 for each worker they bring back from furlough and employ through to 31^st January 2021. Sunak also announced the creation of a new £2 billion “Kickstart scheme” – previewed earlier this morning – which will “directly pay employers to create new jobs for any 16 to 24-year old at risk of long-term unemployment […] with a minimum of 25 hours per week paid at least the National Minimum Wage.” Further employment-related stimulus measures include a £2,000 payment to companies to encourage the hiring of apprentices (on top of the £1,000 currently paid to qualifying employers), £1 billion earmarked for the Department of Work and Pensions to help jobseekers, and a £3 billion “green jobs plan”. This latter measure will see “homeowners and landlords […] be able to apply for vouchers to make their homes more energy efficient and create local jobs.” Speaking about this plan and the government’s wider goal, he said “this is going to be a green recovery.”

In an effort to help hospitality and tourism, which were hit especially hard by the coronavirus pandemic, the Chancellor announced a six-month VAT cut from 20% to 5%, applicable only to these sectors, until 12^th January 2021. He also announced a widely-expected temporary holiday on stamp duty on the first £500,000 of all property sales in England and Northern Ireland, which will expire at the end of March 2021. In addition, Sunak offered all Brits half-price meals between Monday and Wednesday at participating restaurants, saying the government would offer “Eat out to help out” vouchers up-to a maximum value of £10. He added that he hopes these measures lead to pubs, restaurants, cafes and B&B’s becoming “bustling again”.

In his closing comments, Mr. Sunak told listeners: “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.” He added that the measures laid out by the government amount to “a plan to turn our national recovery into millions of stories of personal renewal,” promising “We will not be defined by the crisis but our response to it.”

Businesses that want to thrive as the UK emerges from lockdown should aim to make the most of these measures. If you need help interpreting the Chancellor’s statement, or want an expert view on how it could apply to you and your business, please contact us on 0121 456 0190.