Jobs support and selective VAT cuts in Sunak package

Incentives to employers to keep on furloughed workers, and incentives to the public to eat out, are among the measures announced by the Chancellor, Rishi Sunak, today in his package to stimulate the economy in the wake of the COVID-19 lockdown.

Key points include:

• a jobs retention bonus, for employers who bring back furloughed workers – if they are continuously employed through to January, and are paid at least £520 on average in each month from November to January (the equivalent of the national insurance lower earnings limit), the Government will pay a £1,000 bonus per employee;
• a Kickstart Scheme, for employers to create new jobs (which must be additional jobs) for 16 to 24-year-olds at risk of long-term unemployment: provided they involve at least 25 hours per week and at least the national minimum wage, and provide training and support to find a permanent job, the Government will pay the wages for six months, plus an amount to cover overheads;
• employers will be paid £1,000 a head to take on new trainees, and £2,000 a head for new apprentices;
• an increase in the stamp duty threshold to £500,000 until 31 March 2021, to encourage the housing market – though the Scottish Government has not yet confirmed whether it will make equivalent LBTT changes;
• to help the hospitality and tourism sectors restart, a cut in VAT from 20% to 5%, from 15 July until 12 January 2021, on food, accommodation and attractions, including eat-in or hot takeaway food; accommodation in hotels, B&Bs, campsites and caravan sites; and attractions such as cinemas, theme parks and zoos;
• a measure "never tried in the UK before": for the month of August, an Eat Out to Help Out discount: food and non-alcoholic drinks eaten at any participating business (i.e. registered to do so), Mondays to Wednesdays, will be 50% off, up to a maximum discount of £10 per head for everyone, including children.

He also announced a new Green Homes Grant of up to £5,000 per household, to cover "at least two thirds of the cost" of making homes more energy efficient, and the full cost for low income households.

Mr Sunak described his plans as "an unambiguous choice to make this moment meaningful for our country in a way that transcends the frustration and loss of recent months", and "a plan to turn our national recovery into millions of stories of personal renewal".

For Labour, Shadow Chancellor Annaliese Dodds questioned whether people would yet have the confidence to go out, and said the furlough scheme needed to become more flexible so it could support businesses forced to close again because of additional localised lockdowns. The Government had a responsibility "to finally sort out test, track and isolate, to prevent additional unnecessary unemployment and to build the green jobs of the future".