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Summer Economic Update from the Chancellor of the Exchequer

During his Summer Economic Update, the Chancellor outlined his plan to ‘protect, support and create’ jobs.

This page was updated on 7 August 2020.

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During his Summer Economic Update, on 8 July, the Chancellor Rishi Sunak announced a package of measures to protect, support and create jobs.

With the Coronavirus Job Retention Scheme winding down flexibly and gradually through to October, the government is aiming to get as many people as possible from furlough back into jobs. A new policy announced by the Chancellor during his speech on 8 July, will reward and incentivise employers who successfully bring staff back from furlough with a new Job Retention Bonus. If an employer brings back a furloughed employee and continuously employs them through to January 2021 the government will pay the business £1,000 bonus per employee. Payments will be made from February 2021. Further detail about the scheme is expected to be announced by the end of July.

Below we cover the multiple support measures to protect and create jobs.

 

The Government’s ‘3-point plan for jobs’

The full Plan for Jobs can be accessed here.

 

1 – Measures to support people to find jobs

  • Introduction of the Kickstarter Scheme, a new programme to support young people across the country to find a job. The scheme will directly pay employers to create new jobs for any 16 to 24-year-old at risk of long-term unemployment. The funding will be conditional and for firms to secure this, they will have to create new quality jobs with employers providing training, support to find permanent work, and offer a minimum of 25 hours per week paid at least the national minimum wage. Under the scheme, the government will pay for the wages for six months as well as offer an amount to cover overheads. For 24-year olds, the grant will be around £6,500. Employers will be able to apply for the scheme from August with applicants being able to start their new roles this Autumn.
    The scheme has received an initial £2bn funding and will be open to all employers regardless of size. The government confirmed that there will be no cap on the number of places available.
  • The government also announced further economic support to boost traineeships committing to pay employers £1,000 to take on new trainees with triple the number of places to support 18 to 19-year olds leaving school or college to find work in high demand sectors such as engineering, construction and social care. The chancellor also announced that the government will provide £100m to create additional places on Level 2 and Level 3 courses whilst also funding new career advisors.
  • For the next 6 months, the government will also pay employers to create new apprenticeships and hire young people with a new payment of £2,000 per apprentice. A new bonus will also be introduced for businesses hiring apprentices aged 25 and over with a payment of £1,500.
  • The Chancellor announced that the government will also be investing an additional £1m in the Department for Work and Pensions (DWP) to help people get back into work. The funding will be used to double the number of work coaches in job centres, increase the flexible support fund, extend the rapid response service, expand the work and health programme and develop a new scheme to support the long term unemployed.

 

2 – Measures to create jobs

  • A £2bn Green Homes Grant was announced to create new jobs and support the UK’s green recovery from coronavirus. From September, homeowners and landlords will be able to apply for vouchers to make their homes more energy efficient whilst creating local jobs. The grants will cover at least 2/3 of the cost up to £5,000 per household. For low income households, the grants will cover the full cost up to £10,000.
  • £1bn funding released to improve the energy efficiency of public sector buildings alongside a £50m find to pilot the right approach to decarbonise social housing.
  • Effective immediately the government has decided to cut stamp duty for transactions up to £500,000 up until the 31st March 2021 to boost the housing and constructions sectors.

 

3 – Measures to protect jobs

  • Two new measures were also announced to support the tourism and hospitality sectors which have been significantly impacted by COVID-19. These include:

    • A 6-month VAT reduction from 20% to 5% on food, accommodation and attractions such as cinemas theme parks and zoos starting from Wednesday 15 July and valid until January 12.
    • The introduction of an “Eat Out to Help Out” Scheme to support restaurants, cafes and pubs and incentivise consumers to return to these establishments. The discount scheme will be valid for the month of August and will provide a 50% reduction (maximum discount of £10 per person) for sit-down meals in cafes, restaurants and pubs across the UK from Monday to Wednesday.

      Businesses are able to register online through a simple website which opened on Monday 13 July and claim the money back afterwards with funds expected to be received within 5 working days. For more information on eligibility and to register your business, visit the government's dedicated page. Businesses can also register for the government's upcoming live webinar providing an overview of the scheme.                      

      Once registered, you will receive a registration reference number which you will need when you claim the reimbursement. The name, address and website URL of your establishment will be added to a list of participating establishments. Individuals can use the restaurant finder tool to search for participating businesses within a 5 mile radius of the postcode they enter.

      Note
      : Businesses cannot offer discounts before 3 August and alcohol and service charges are excluded from the offer (soft drinks and/or packaged snacks are included in the offer provided they are immediately consumed on the premises). Participating businesses can download and display the promotional material published by HMRC.

 

To review the full Plan for Jobs, see here.

 

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More information is available on the UK Government’s Coronavirus Business Support website. For more personalised advice call us on: 0161 237 4128 or email us at: BGH@growthco.uk

 

The information provided is meant as a general guide only rather than advice or assurance. GC Business Growth Hub does not guarantee the accuracy or completeness of this information and professional guidance should be sought on all aspects of business planning and responses to the coronavirus. Use of this guide and toolkit are entirely at the risk of the user. Any hyperlinks from this document are to external resources not connected to the GC Business Growth Hub and The Growth Company is not responsible for the content within any hyperlinked site.

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