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More measures to aid UK economic recovery

Chancellor of the Exchequer Rishi Sunak has unveiled a number of measures – including paying £1,000 to employers for each employee they bring back from furlough – to aid the UK’s economic recovery from the COVID-19 crisis.

Mr Sunak told the House of Commons he was “not just going to accept” rising unemployment and that although hardship lies ahead, “no one will be left without hope”.

The measures announced by the Chancellor include:

  • A jobs retention bonus of £1,000, per employee, for businesses bringing back employees from furlough and continuously employing them from November until January
  • VAT cut from 20% to 5% for the hospitality and tourism sectors from 15 July to 12 January
  • People can get 50% off vouchers in August as part of the ‘Eating Out to Help Out’ scheme, aimed at getting people back in pubs, cafes and restaurants
  • The kickstart scheme – grant funding for employers to create new jobs for any 16 to 24-year-old at risk of long-term unemployment, with government paying their wages, plus overheads, for the first six months. The first kickstarters will be in their new jobs this autumn, and there will be no cap on the number of places available
  • For the next six months, businesses will be paid up to £2,000 per new apprentice they take on
  • Investing an additional £1 billion in the Department of Work and Pensions to support people back into work
  • From September, a £2 billion green homes grant for homeowners and landlords to carry out works to make homes more energy efficient
  • £1 billion to improve the energy efficiency of public sector buildings
  • £50 million fund to pilot the decarbonisation of social housing
  • Stamp duty threshold increasing to £500,000

Mr Sunak’s announcements are the second phase of the UK’s economic response to the coronavirus crisis. The first phase, which included the Coronavirus Job Retention Scheme, supported more than 11 million people and supported more than a million businesses through grants and government-backed loans.

He added: “Despite the extraordinary support we’ve already provided, we face profound economic challenges. World economic activity has slowed with the IMF expecting the deepest global recession since records began, household consumption – the biggest component of our economy – has fallen steeply, businesses have stopped trading and stopped hiring.

“Taken together, in just two months, our economy contracted by 25%, the same amount it grew in the previous 18 years.

The Chancellor said it was “vital” those going back to work were not returning “just for the sake of it” and that each employee must be paid at least £520 on average in each month from November to January.

He added: “Our message to businesses is clear. If you stand by your workers, we will stand by you.”

On the kickstart scheme, the Chancellor urged businesses to hire as many kickstarters as possible, and said the green initiatives announced today would support around 140,000 green jobs.

The ‘Eating Out to Help Out’ scheme, will run from Monday-Wednesday each week in August, combined with the VAT cut, will protect the hospitality and tourism sectors, which have been hit hardest by the coronavirus crisis.

“Our economy relies on consumption, especially social consumption, the pubs, cafes, restaurants, hotels and B&Bs that bring life to our villages, towns and cities,”

“These sectors employ over 2 million people disproportionately younger women and people from black, Asian and minority ethnic communities, and many rural and coastal communities rely on these industries.

“80% of hospitality firms temporarily stopped trading, and 1.4 million workers have been furloughed, the highest proportions of any sector.”

The Chancellor said he knew people were cautious about going out, but businesses had been working hard to make their premises safe and they needed confidence from the public that demand would be there.

Concluding, he said: “For me, this has never just been a question of economics, but of values.

“We will not be defined by this crisis, but by our response to it.”