The Chancellor today delivered his Summer Statement, which detailed a number of measures to help the UK economy rebuild. Below we summarise some of the key announcements.
Job Retention Bonus
A one-off payment of £1,000 to UK employers for every furloughed employee who they bring back to work and who remains continuously employed through to the end of January 2021.
The bonus payments will be paid from February 2021, with further details of the scheme being released by the end of the month.
Reduced VAT rate for hospitality accommodation and attractions
From the 15 July 2020 to 12 January 2021 VAT will be reduced to 5% for supplies of food, non-alcoholic drinks, accommodation and admission to attractions.
Eat Out to Help Out
A 50% discount, up to £10 per head, on meals at participating restaurants and other eligible food service establishments. The discount can be used unlimited times, Monday to Wednesday on eat-in meals for the entire month of August. Alcoholic drinks will be excluded from the scheme.
Businesses which participate in the scheme will be fully reimbursed for the 50% discount. We are waiting for further details to be released on how businesses can apply.
A problem facing the hospitality industry is that consumers taking a trip to the pub or restaurant caould be asked to isolate for 2 weeks. With many restaurants unable to secure the necessary footfall to overcome razor think margins.
SDLT Temporary Cut
The Nil Rate Band Residential SDLT will be increased in England and Northern Ireland from £125,000 to £500,000. This will apply from 8 July 2020 to 31 March 2021. This will mean nearly nine out of ten people buying a home will pay no SDLT during this time.
The 3% charge remains for addittional homes however, so no incentive here for landlords.
The scheme attempts to encourage employers to offer a high-quality 6-month work placement for people aged 16-24 who are on Universal Credit and deemed to be at risk of long-term unemployment. The scheme will cover 100% of the relevant National Minimum Wage and associated employer costs for the individual during the placement.
Green Homes Grant
A £2 billion fund that will provide grants of up to £5,000 for homeowners and landlords to make their homes more energy-efficient. The poorest households will have a larger grant of £10,000.
Well, an underwhelming summer statement from the Chancellor. His plan is to keep people in employment and push spending. The Chancellor continues to ignore the millions of self-employed, freelancers, company directors and others which are ineligible for support. Which is hugely frustrating.
They have bolted on this job retention bonus to the furlough scheme to keep workers in employment. I’ve been in Manchester this morning and the city centre could have been considered a ghost town. The retail and aviation sector continues to be overlooked by the government. A more targeted approach to the sectors which have been hit the hardest would in our view be more fruitful.
My thoughts are we were too slow into lockdown and too slow coming out. Number 10 needs to unlock the economy and build consumer confidence now, and help those who have fallen through the cracks. This statement was the opportunity to announce a grand plan and build consumer confidence, an opportunity missed.