Chancellor Rishi Sunak unveiled plans for a job retention bonus, a “kickstart” job creation scheme for young people and to increase the stamp duty threshold as part of his mini-budget announcement at the House of Commons on Wednesday.
In his opening speech Sunak said that people were anxious about losing their jobs and rising unemployment, as the UK economy has shrunk by 25 percent in just two months.
He assured MPs saying, “We’re not going to accept this. People need to know we will do all we can to give everyone the opportunity of good and secure work.”
As part of the UK’s recovery plan, the Chancellor announced a £30 billion package as the country enters into the second phase of the government’s economic response to Covid 19.
This includes a job retention bonus in which businesses will receive £1000 for every worker that companies bring back from furlough and employ through to January next year.
Sunak said that this would cost the Treasury more than £9 billion if every job furloughed is protected.
Other plans include a “kickstart scheme” to directly pay firms to create jobs for 16 to 24 year olds. The government will provide an initial £2 billion to fund hundreds of thousands of jobs for young people and Sunak said there will be no cap on the number of places available.
The Chancellor also introduced an eight month temporary cut in stamp duty in an attempt to reinvigorate the housing market. He has also increased the stamp duty threshold from £125,000 to £500,000. This will come into effect immediately.
Jobcentre work coach numbers will be doubled and firms will receive a bonus of £2000 for taking on apprentices and trainees. Companies taking on apprentices over 25 will receive £1,500.
VAT rates will be reduced from 20 percent to 5 percent for the next six months on food, accommodation and attractions in an effort to support the hospitality sector. The cuts will last from Wednesday 8 July until 12 January 2021.
An “Eat Out to Help Out” scheme has also been introduced to encourage people to return to restaurants, cafes and pubs. From Mondays to Wednesdays, meals eaten at participating businesses will be half price, with a maximum discount of £10 per head.
Sunak also announced plans for green investment in which the government will provide £3 billion for decarbonising housing and public buildings.
Labour’s Shadow Chancellor Annaliese Dodds responded to Sunak’s plans saying that the furlough scheme should be kept going in certain areas.
She told MPs: "We need a strategy for the scheme to become more flexible so it can support those businesses forced to close again because of additional localised lockdowns.
"There is still time to avoid additional floods of redundancy notices. It is the government's duty to help Britain through this."
Labour’s Shadow Justice Secretary David Lammy tweeted about the government’s failure to mention law firms in their plans.
A Law Society survey of small firms in April found that 71% of small firms fear cashflow issues could force their closure within 6 months.— David Lammy (@DavidLammy) July 8, 2020
But not a single word in the government's Plan for Jobs to protect them #SummerStatement
The DUP’s Treasury spokesperson Sammy Wilson suggested that clothes shops will welcome the “Eat Out to Help Out” scheme saying that "once we've eaten our way through a month's worth of half price meals we may be in need of new clothes."
Wilson however expressed his concerns over the lack of mention of the aerospace and aviation sectors, which are important to Northern Ireland.
Andy Burnham, the mayor of Greater Manchester, has welcomed the measures outlined in Rishi Sunak’s statement but said they belonged to “normal economic times” and that much more needed to be done to “build resilience in our poorest communities”.
Rishi Sunak’s statement is a textbook plan for restoring business-as-usual: prop up the housing market, ignore renters, create low-paid jobs, get people consuming again, ignore the climate crisis.— Laurie Macfarlane (@L__Macfarlane) July 8, 2020
Totally oblivious to the scale of the challenges we face.