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Mattioli Woods : Government's Summer Statement 2020

07/09/2020 | 09:48am
Government's Summer Statement 2020
The Chancellor of the Exchequer Rishi Sunak presented his 'Plan for Jobs' to Parliament on Wednesday 8 July 2020 to outline how the government will boost job creation in the UK. This builds on the action taken in the March 2020 Budget in the face of the immediate threat posed by COVID-19.

Chancellor Sunak outlined that the Government is now in Phase 2 of its response with a targeted Plan for Jobs, with Phase 3 being about rebuilding.

  • The Plan For Jobs will support the UK's economic recovery while continuing to prioritise people's health by:
  • Introducing a new Job Retention Bonus to encourage firms to keep on furloughed workers
  • Supporting jobs with direct help to find work and to gain the skills people need to get a job
  • Protecting jobs in the hospitality and accommodation sectors and at attractions by supporting demand for these businesses, giving them confidence to reopen
  • Creating jobs with action to get the property market moving, to increase and bring forward infrastructure investment, and to make homes greener, warmer and cheaper to heat.

Supporting jobs

  • Job Retention Bonus
- UK Employers will receive a one-off bonus of £1,000 for each furloughed employee who is still employed as of 31 January 2021 (certain conditions apply).

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

- 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, in particular the young that have been hard hit.

  • 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.

- £5.8 billion will be spent on shovel-ready construction projects to get Britain building.

  • Protecting jobs
- The plan will also protect jobs, in particular the tourism and hospitality sectors that have been severely impacted. 80% of hospitality firms stopped trading in April and 1.4 million hospitality workers have been furloughed - the highest proportions of any sector.

- To encourage people to safely return to eating out at restaurants the Government's new Eat Out to Help Out discount scheme will provide a 50% reduction (up to £10) for sit-down meals in cafes, restaurants and pubs until the end of August 2020.

- VAT on most tourism and hospitality-related activities will also be cut from 20% to 5%.

  • Helping the property market
- The Government want people to feel confident to move, to buy, to sell, to renovate, and to improve their homes.

- There will be a temporary increase in the the Nil Rate Band of Residential Stamp Duty Land Tax, in England and Northern Irelandfrom £125,000 to £500,000 until 31 March 2021.

- In England and Northern Ireland nearly 9 out of 10 people getting on or moving up the property ladder will pay no Stamp Duty at all. This will drive growth and support jobs across the housebuilding and property sectors.

'The £30bn worth of stimulus measures announced yesterday demonstrates the fine line that Rishi Sunak, Chancellor of the Exchequer, has to walk. He has to balance the near-term need to safeguard the post-lockdown economic recovery, with the risk of testing the limits of the bond market's appetite for U.K gilts. The gilt market, and sterling, barely moved in response. Borrowing costs are record lows. But it's a long road ahead.'

Tom Elliott, Senior Investment Strategist

Further information is available here: https://www.gov.uk/government/topical-events/a-plan-for-jobs-2020

Disclaimer

Mattioli Woods plc published this content on 09 July 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 July 2020 13:47:03 UTC

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