Summer Economic Update 2020
“Jobs, jobs, jobs” is the theme of Chancellor, Rishi Sunak’s second Budget in four months as he seeks to insulate people and businesses from the ravages of an economic winter, unveiling new job creation schemes to help counteract rising unemployment.
More than two million jobs could be lost when the furlough scheme ends in October, and the country could be facing the worst recession since the Great Frost of 1709, according to the Chancellor. In two months this year, GDP dropped 25%.
Building on last week’s “Build, build, build” speech from the Prime Minister, there are new work placements with the government covering the minimum wage for young workers, and employers will be offered incentives to create more apprenticeships.
Key tax announcements include an immediate temporary increase in the stamp duty threshold to £500,000 and a VAT cut to 5% for the hospitality sector.
For the month of August there will be a 50% reduction, up to £10 per head, on sit-down meals and non-alcoholic drinks Monday-Wednesday.
The Chancellor also unveiled a £3 billion green jobs package, including vouchers for people to insulate their homes.
We have pulled out the key announcements from the Budget below, and we will follow this up with commentary on relevant issues.
Summer Economic Update 2020 key measures announced:
- There will be a Budget and Spending Review in the autumn
- Flexible Furlough Scheme will end in October
- New Job Retention bonus for employers bringing back employees from furlough
- Kickstart Jobs creation package for 16 to 24 year olds – Employers can apply for a grant to cover six months wages + overheads. No cap on places, but employee must work at least 25 hours per week
- New £1,000 apprenticeship incentives for employers
- New careers advisers and work coaches
- £2bn green homes grant to make homes more energy efficient
- Temporary cut in stamp duty – raising the threshold from £125,000 to £500,000
- VAT rate cut for the hospitality sector to 5% for six months
- August discount for Monday to Wednesday eating out – £10 per head