Chancellor’s Summer Statement Summary

Chancellor’s Summer Statement Summary

Highlights of yesterday’s Chancellor’s Summer Statement are:

Job Retention Bonus: To help firms keep on furloughed workers, UK Employers will receive a one-off bonus of £1,000 for each furloughed employee who is still employed as of 31 January 2021.

Kickstart Scheme: A new £2 billion scheme will also be launched to create hundreds of thousands of new, fully subsidised jobs for young people across the country. Those aged 16-24, claiming Universal Credit and at risk of long-term unemployment, will be eligible. Funding available for each six-month job placement will cover 100% of the National Minimum Wage for 25 hours a week – and employers will be able to top this wage up.

Employment and support schemes: 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.

Creating jobs: The plan will also create tens of thousands of jobs through bringing forward work on £8.8 billion of new infrastructure, decarbonisation and maintenance projects. In addition, £5.8 billion will be spent on shovel-ready construction projects to get Britain building.

Eat Out to Help Out:To encourage people to safely return to eating out at restaurants the Government’s new discount scheme will provide a 50% reduction for sit-down meals in cafes, restaurants and pubs across the UK from Monday to Wednesday every week throughout August 2020.

VAT: The rate of VAT applied on most tourism and hospitality-related activities will be cut from 20% to 5%.

Stamp Duty: A temporary increase to the Nil Rate Band of Residential SDLT (Stamp Duty) from £125,000 to £500,000 has been introduced until 31 March 2021.

Read more about these measures below.

 

Supporting Jobs
The Chancellor announced that there will not be a further extension to the furlough scheme beyond October.

However, as part of the plan to support jobs, a Job Retention Bonus will be introduced to help firms keep furloughed workers. UK Employers will receive a one-off bonus of £1,000 for each furloughed employee who is still employed as of 31 January 2021. In Greater Lincolnshire there are an estimated 117,800 people who have been furloughed, one quarter of the total workforce.

A new £2 billion Kickstart Scheme will also be launched to create hundreds of thousands of new, fully subsidised jobs for young people across the country.

Those aged 16-24, claiming Universal Credit and at risk of long-term unemployment, will be eligible. Funding available for each six-month job placement will cover 100% of the National Minimum Wage for 25 hours a week – and employers will be able to top this wage up. Around 8,100 16-24 year olds are currently claiming job seekers elements of Universal Credit in Greater Lincolnshire and make up 20% of all claimants.

Plan for Jobs
Read the Chancellor’s Plan for Jobs outlining how the government will boost job creation in the UK.

Employment support, 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:

– Businesses will be given £2,000 for each new apprentice they hire under 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.

– A £111 million investment to triple the scale of traineeships in 2020-21 ensuring more young people have access to high quality training.

– £17 million of funding to triple the number of sector-based work academy placements in 2020-21

– Nearly £900 million to double the number of work coaches to 27,000;

– Over a quarter of a million more young people to benefit from an extra £32 million investment in the National Careers Service.

Boosting demand in the hospitality sector
The rate of VAT applied on most tourism and hospitality-related activities will be cut from 20% to 5%. We have not yet seen any detail on this. In addition the Chancellor announced the Eat Out to Help Out discount scheme, offering a 50% reduction for meals in cafes restaurants and pubs across the country

Monday-Wednesday throughout August. It is hoped this will boost demand in the sector however is likely to receive a lukewarm response from public health bodies.

Greater Lincolnshire employs nearly 30,000 people in the visitor economy and associated sectors, which is indirectly worth almost £2.4bn to the local economy. Full details of the announcement can be found here and read the Greater Lincolnshire LEP Chair’s response here.

Stamp Duty Cut
The Chancellor announced an increase to the Nil Rate Band of Residential SDLT (Stamp Duty) from £125,000 to £500,000 until 31 March 2021.

This cut in stamp duty had been trailed and developers/estate agents were already reporting that this has stalled existing transactions as people deferred closing deals to wait to see what the chancellor was going to do. So there will have been an adverse impact putting sales on hold which should/may now proceed.

Infrastructure, decarbonisation and maintenance projects
The Chancellor announced that the Government will look to stimulate jobs growth by bringing forward work on £8.8 billion of new infrastructure, decarbonisation and maintenance projects.

This includes a £3 billion green investment package that could help support around 140,000 green jobs and upgrade buildings and reduce emissions.

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. We await a list of eligible interventions; it will be interesting to see if new gas boilers are included given recent proposals from government to stop allowing gas boilers in new builds.

The Chancellor also announced a £1 billion programme to make public buildings, including schools and hospitals, greener, helping the country meet its ambitions of achieving Net Zero by 2050.

In addition, £5.8 billion will be spent on shovel-ready construction projects to get Britain building. This includes:

– £1.5 billion for hospital maintenance and upgrades
– £100 million for our local roads network
– over £1 billion to start to rebuild schools in the worst condition in England, plus £760 million this year for key maintenance work on schools and FE colleges
– £1 billion for local projects to boost local economic recovery in the places that need it most
– £142 million for court maintenance to repair around 100 courts across England.

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