As part of the first stage of a three-phased economic recovery plan, the government has already provided a £160 billion support package to help protect people’s jobs, incomes and businesses.
Government support including the Job Retention Scheme, direct cash grants, government backed loans, tax deferrals, as well as other support has been vital to many businesses surviving over the past few months. As we start to reopen our economy and the first stage of support measures begin to curtail, people and businesses are now looking at the government’s response to the second stage of the recovery plan to provide them with certainty and confidence.
The Chancellor has now set out
his plan, under the second phase, which is designed to support, protect and create
jobs. The Chancellor said that following the second phase focusing on jobs, the
third phase will be focused on “rebuilding” the economy, which is due to be
announced in the autumn.
A summary of the new measures announced are detailed below:
Job Retention Bonus
A new Job Retention Bonus will be introduced for employers who bring back furloughed staff.
Employers will receive a one-off bonus of £1,000 for each furloughed employee who is still employed as of 31 January 2021.
To qualify employers must pay the employees more than £520 per month (National Insurance Lower Earnings Limit) on average between the end of the Coronavirus Job Retention Scheme and the end of January 2021, with the bonus becoming payable from February 2021.
Further detail about the scheme will be announced by the end of July.
A new £2 billion Kickstart Scheme will also be launched to create hundreds of thousands of high quality 6-month work placements, aimed at those aged 16-24 who are on Universal Credit and are deemed to be at risk of long-term unemployment.
Funding available for each job will cover 100% of the relevant National Minimum Wage for 25 hours a week, plus the associated employer National Insurance contributions and employer minimum automatic enrolment contributions. Employers will be able to top this wage up.
Employment Support Schemes, Training and Apprenticeships
A total of £1.6 billion will be invested in scaling up employment support schemes, training and apprenticeships to help people looking for a job.This includes:
Payments for employers who hire new apprentices
Employers in England will be given £2,000 for each new apprentice they hire under the age of 25 from 1 August 2020 to 31 January 2021. Employers will also receive £1,500 for each new apprentice hired over the age of 25. This is in addition to the existing £1,000 payment the government already provides for new 16-18-year-old apprentices and those aged under 25 with an Education, Health and Care Plan.
High quality traineeships for young people
An additional £111 million this year (2020/21) for trainee-ships in England, to fund high quality work placements and training for 16-24 year olds.
New funding for sector-based work academies
An additional £17 million this year (2020/21) to work academy placements in England.
New funding for National Careers Service
An additional £32 million funding over the next 2 years for the National Careers Service, so that 269,000 more people in England can receive personalised advice on training and work.
Enhanced work search support
The government will also provide £895 million to enhance work search support by doubling the number of work coaches in Jobcentre Plus before the end of the financial year across Great Britain.
The tourism and hospitality sectors are massive employers in the UK and have been severely impacted by the pandemic due to necessary closures to protect public health.
‘Eat Out to Help Out”
To encourage people to safely return to eating out at restaurants the government announced their new ‘Eat Out to Help Out’ discount scheme. The scheme will provide a 50% reduction up to a maximum of £10 per head for everyone (including children) for sit-down meals in cafes, restaurants and pubs across the UK from Monday to Wednesday every week throughout August 2020.
The discount can be used unlimited times on any eat-in meal (including on non-alcoholic drinks), with participating establishments fully reimbursed for the 50% discount.
Businesses will need to register, and can do so through a simple website that opens on Monday 13 July 2020.
Businesses can then claim the money back each week in August, with the funds in their bank account within 5 working days.
Temporary cut to VAT on food, accommodation and attractions
The rate of VAT applied on most tourism and hospitality-related activities will also be cut from 20% to 5%.
A temporary change to Stamp Duty Land Tax (SDLT)
The housing market has been severely affected by the pandemic, with activity and construction both slowing sharply.
The chancellor has therefore announced a temporary change to Stamp Duty Land Tax (SDLT), with immediate effect, increasing the threshold at which you do not pay SDLT from £125,000 to £500,000 in England and Northern Ireland until 31 March 2021. As the SDLT legislation is devolved, this does not apply to land transactions in Wales and Scotland.
This is aimed to improve confidence for people to move, to buy, to sell, to renovate, and to improve their homes and it is projected by the government that nearly nine out of ten people getting on or moving up the property ladder will pay no SDLT at all.
Green Homes Grant
Finally, the Chancellor unveiled that the government will introduce a £2 billion Green Homes Grant, to help make homes more energy efficient.
As part of this package homeowners and landlords in England will be able to apply for vouchers from a £2 billion Green Homes Grant scheme this year to pay for green improvements such as loft, wall and floor insulation that could save some households hundreds of pounds a year on their energy bills while creating thousands of jobs for tradespeople.
The grants will provide at least £2 for every £1 homeowners and landlords spend to make their homes more energy efficient, up to £5,000 per household.
For those on the lowest incomes, the scheme will fully fund energy efficiency measures of up to £10,000 per household.
In total this could support over 100,000 green jobs and help strengthen a supply chain that will be vital for meeting the government’s target of net zero greenhouse gas emissions by 2050.
Along with the £2 billion Green Homes Grant, the government is releasing a further £1 billion of funding to improve the energy efficiency of public buildings, including schools and hospitals.
In addition to green grants, £5.8 billion will be spent on “shovel-ready” construction projects to get Britain building.
In summary, the Chancellor has outlined another substantial support package for individuals and business to help get the economy bounce back following the coronavirus outbreak, however, whether it is enough will not be seen for at least a couple of months.