Rishi Sunak announces Covid-19 mini-budget 2020

Rishi Sunak announces Covid-19 mini-budget 2020

Chancellor of the Exchequer Rishi Sunak has unveiled a series of measures aimed at helping the economy bounce back post Covid-19.

Speaking in Parliament today (8 July 2020), the Chancellor announced the Government’s plan is designed to protect existing jobs, create thousands of new jobs in every part of the country and give businesses the confidence to retain and hire employees.

Job Retention Bonus Scheme

With the furlough scheme winding down, ready to come to an end in October, many are concerned that affected businesses will be forced to make tens of thousands of employees redundant. Therefore, in order to encourage businesses to bring furloughed employees back, the Job Retention Bonus Scheme has been announced. Under the scheme, employers will be able to claim a £1,000 bonus for every employee they bring back from furlough, who is still employed as of 31 January 2020.

Kickstart Scheme & training and apprenticeship help

The Chancellor also announced the ‘Kickstart Scheme’ which aims to create hundreds of thousands of jobs for young people across the country. Those aged 16-24, claiming universal credit and at risk of long-term unemployment are eligible for the scheme. For each ‘kickstarter’ job, the Government will cover the cost of 25 hours’ work a week at the National Minimum Wage, employers will be able to top up this wage if they wish.

In addition, there will be a total of £1.6 billion invested into increasing employment support schemes, training, and apprenticeships to help unemployed young people, who are amongst the worst hit by the crisis. The announcement included:

  • £2,000 given to businesses for each apprentice they hire under the age of 25.
  • £111 million invested to triple the number of traineeships in 2020-21
  • £17 million of funding to triple the number of sector-based work academy placements in 2020-21
  • £900 million invested to double the number of work coaches.
  • £32 million investment into National Careers Service.

Green Homes Grant

This £3 billion green investment package aims to create around 140,000 new jobs. Under this scheme homeowners and landlords will be able to apply for vouchers to make green improvements to their property. £1 billion will also be invested in making public buildings, such as schools and hospitals greener in order to achieve Net Zero by 2050.

Infrastructure investment

In addition, £5.8 billion will be spent on shovel ready construction projects, this includes:

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

Eat Out to Help Out Scheme

Ensuring there is enough demand for restaurants opening is key to helping these businesses recover from the effect of Covid-19. The Government has, therefore, announced the ‘Eat Out to Help Out’ scheme, to encourage people to return to eating out at restaurants. The scheme will provide a 50% discount for sit-down meals in cafes, restaurants and pubs up to a maximum of £10 discount per person. This scheme will be implemented across the UK from Monday to Wednesday every week throughout August 2020.

VAT reduction

In order to further help the tourism and hospitality sectors, a 15% cut to VAT has been announced, bringing VAT on food and non-alcoholic drink, accommodation and attractions from 20% to 5%. This is estimated to save households around £160 a year. The VAT cut will come into effect next Wednesday (15 July 2020).

Stamp Duty holiday

In addition to the above measures aimed at creating and preserving jobs, the Chancellor also announced a temporary holiday on stamp duty tax on the first £500,000 of all property sales in England and Northern Ireland. This means that any property purchase below the new level (£500,000) will not need to pay stamp duty.

These new measures will come into force immediately from today (8 July 2020) and will last until 31 March 2021.

The above measures are phase two out of three of the Government’s plan to secure the UK’s economic recovery from coronavirus. If you would like further information on what these measures could mean for you, please contact Hiren Gandhi on 07917 811014 or at hjg@blasermills.co.uk