Please see below a brief summary of today’s statement by the Chancellor of the Exchequer, Rishi Sunak, which has been helpfully summarised by my colleague Jon Selby.
The economic impact from Coronavirus has led to a 25% fall in GDP for the UK since March and significant job losses. Government’s action as a result of crisis will be in 3 stages – “Response”, “Jobs” and “Rebuild”.
In the first “response” phase the Government has provided £160bn in support to workers through CJRS (Furlough scheme) and SEISS and also to businesses through grants, loans and tax deferments. These are measures which were announced both at the budget in March and subsequently.
In the second “jobs” phase launched today phase the Government announced that it will support jobs with a particular focus on 16-24 year olds – (700,000 will be leaving education this year and younger workers are 2.5 times more likely to be on furloughed than the average)
CJRS (Furlough scheme)
- This will continue until October as previously announced and will be gradually phased out by then. To encourage people back into work from the furlough scheme, however there is a new Jobs Retention Bonus to Employers :
Jobs retention bonus to Employers
- If staff taken back from furlough are employed until January 2021 there will be a £1,000 per employee bonus to the employer, provided that the jobs also pay the employee a minimum of £550 per month.
£2bn Kickstart scheme (6 month placements 16-24 for those on Universal Credit)
- New jobs incentivisation for businesses to take-on 16-24 year olds on Universal Credit who may be at risk of long term unemployment. People taken on will need to be employed 25hr minimum per week; detail is to follow, however, there will need to a training element to the jobs and help to make the employee permanent. Under the scheme people’s wages will be paid for 6 months, plus with some overheads covered up to a cap of £6,500 per employee, but with no cap on number of places. Applications for the scheme are to start this summer with the first jobs beginning in October.
- The launch of a trainee Scheme for 30,000 people, with businesses to be offered £1,000 for every training place and work experience place up to 10 per employer.
- Government to pay employers to take-on apprentices, with £2,000 per apprentice up to the age of 24 and with £1,500 available per apprentice 25 year plus.
£1bn extra to DWP to support people back into work
- Doubling of front line staff at job centres,
- £32m extra for recruiting career advisors to help 250,000 extra people
- £17m for work academies in England
- Increasing the flexible support scheme for the unemployed.
The third phase of the Governments response to the Covid-19 crisis is “rebuild”:
Green jobs – supporting 140,000 jobs
- £2bn in green homes grant – this includes vouchers for energy efficiency. Up to £5k will be available per household pays, for up to 2/3rd of cost of things like insulation and double glazing. Low income households can get up to £10k and cover the total cost.
- £1bn is to be made available for energy efficiency in public sector buildings, including schemes to decarbonise social housing and a £40m green jobs challenge fund which will support 5,000 jobs creating green spaces, planting trees and cleaning rivers.
This partly aligns with Devon’s green recovery asks within the Team Devon economic recovery prospectus.
- Stamp duty – the threshold has increased from £125k to £500k until 31/03/21 as of today, therefore there will be no stalling to transactions due to implementation. This will apply to around 9/10 home purchases in the UK. This should act as a temporary incentive to jump start the housing market.
Hospitality and tourism
More younger people, women and BAME groups tend to be employed in these sectors. Many rural and coastal economies are particularly dependent upon these sectors and these sectors are heavily represented in much of Devon. Measures to help these sectors include:
- VAT on eating out, accommodation and attractions is to be cut from next Weds until Jan 12th from 20% to 5%
- Eat out to help out Scheme. For August – an eat out discount of 50% (Mon to Weds) of up to £10 per customer will be available. Businesses must register to be able to claim this back. The Government has said businesses registered should be able to get any money claimed back within 5 days.
Economy Team Manager (Economic evidence, policy and strategy)
Devon County Council
Telephone: 01392 382165
Twitter : @DCCeconomy