UK chancellor touts $37.6B stimulus
Jul 09, 2020 - 12:17 PM
LONDON (AA) – The head of Britain’s Treasury on Tuesday unveiled his plan for jobs, a big economic package to shore up the UK economy in the wake of the coronavirus pandemic’s blow to the economy.
There were two eye-grabbing policy announcements.
Rishi Sunak, chancellor of the exchequer, announced the Eat Out to Help Out scheme to support restaurants and those who work in them. For the month of August, the government will give each and every Brit a 50% reduction, up to £10 ($12.55) per head, on sit-down meals and non-alcoholic drinks Monday to Wednesday.
The government also announced a six-month VAT cut from 20% to 5% on goods and services in the tourism and hospitality sectors. He said the £4 billion boost would benefit over 150,000 businesses and consumers everywhere, helping protect 2.4 million jobs.
“We will not be defined by this crisis, but by our response to it,” Sunak said.
Work for the young
Sunak said that for every worker employers bring back from furlough, and who is continuously employed until next January, employers will be paid a job retention bonus of £1,000.
He also launched a Kickstarter scheme to help hundreds of thousands of young people into work. He made available an initial £2 billion, with no cap on the number of eligible places.
Under the scheme, the government will directly pay employers to create new jobs for any 16-24 year old at risk of long-term unemployment, and will pay young people’s wages for six months, plus an amount to cover overhead. This means that for a 24-year-old, the grant will be around £6,500.
Continuing his focus on young people, Sunak announced that for the first time ever, the UK government will pay employers £1,000 to take on trainees, and will triple the number of traineeship slots.
The £111 million traineeship scheme will consist of work experience placements, training, and work preparation for 16-24 year olds. The traineeships will last between six weeks and six months and can lead to apprenticeships, further education, and other employment.
Sunak said that for the next six months, the government will pay businesses to hire young apprentices, with a £2,000 payment. They will also introduce new bonuses to hire apprentices 25 and over, with a £1,500 payment.
Sunak also announced an additional £32 million to recruit career advisers to provide guidance for over a quarter of a million more people. They will also double the number of work coaches to help people find jobs, in a policy that will cost nearly £900 million this year.
The chancellor added that the government will fund £2 billion of Green Home Grants to create local jobs for plumbers, builders, and tradespeople. Homeowners will receive vouchers to pay for green home improvements, such as loft, wall, and floor insulation, supporting potentially 100,000 jobs and making over 650,000 homes more energy efficient. The scheme could also save households up to £300 a year on their bills.
Sunak also cut stamp duty, a tax paid on buying a new home in England or Northern Ireland costing more than £125,000.
He said that now everyone buying a main home for less £500,000 will pay no stamp duty at all, with the policy in place until March 31, 2021. Nine out of 10 people will pay no stamp duty at all as a result of the policy, he said.
Taken together, the play is worth up to £30 billion ($37.6 billion).
Labour Shadow Chancellor Anneliese Dodds said: “It should have been the day when the millions of British people worried about their jobs and future prospects had a load taken off of their shoulders. It should have been the day when we got the UK economy firing again.
“Today, Britain should have had a back to work budget, but instead we got this summer statement with many of the big decisions put off until later as the benches opposite know full well.”
The main opposition Labour Party later tweeted: “Thanks for the meal deal, but we were promised a new deal.” (Karim El-Bar)