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Chancellor’s Recovery Measures Announced

8th Jul 2020
Business, Coronavirus

Chancellor’s Summer Statement

Chancellor Rishi Sunak has presented his “summer economic statement” and announced that it will be supporting the UK’s economic recovery, the measures include:

  • 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 hard-hit 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.

He pledged that in his measures that, “No one will be left without hope.” He then went onto remind everyone of “the Government’s ‘extraordinary’ economic support measures have been among the largest in the world” but acknowledged that there were still “profound” challenges to be faced by the country which would include “significant” job losses.

He added that he will “not accept unemployment as an inevitable outcome to a 25% decline in national income in two months”.

So here is a little more of the detail:

Supporting Jobs

Job Retention Bonus Scheme

The Government has introduced a one-off payment of £1,000 to UK employers for every furloughed employee who remains continuously employed through to the end of January 2021. Employees must earn above the Lower Earnings Limit (£520 per month) on average between the end of the Coronavirus Job Retention Scheme and the end of January 2021. Payments will be made from February 2021. Further detail about the scheme will be announced by the end of July.

Supporting Jobs

As unemployment can have long-term impacts on individuals and families, with young people particularly vulnerable due to their lack of experience in work. To address these challenges the Government has a large-scale, ambitious plan to:

  • support people in finding jobs
  • enable them to gain the skills they need to get jobs
  • provide targeted help for young people to get into work.

Kickstart Scheme

This has been established to support the direct creation of high-quality jobs for young people at the highest risk of long-term unemployment. It will give young people the chance to build their confidence and skills in the workplace, and to gain experience that will improve their chances of going on to find long-term, sustainable work. This will sit alongside a guaranteed foundation of support through an expanded Youth Offer delivered through DWP, providing a range of targeted support to help young people find lasting work.

A £2 billion fund to create hundreds of thousands of high quality 6-month work placements aimed at those aged 16-24 who are on Universal Credit and are deemed to be at risk of long-term unemployment. Funding available for each job will cover 100% of the relevant National Minimum Wage for 25 hours a week, plus the associated employer National Insurance contributions and employer minimum automatic enrolment contributions.

New funding for National Careers Service

The Government will provide an additional £32 million funding over the next 2 years for the National Careers Service so that 269,000 more people in England can receive personalised advice on training and work.

High quality traineeships for young people

The Government will provide an additional £111 million this year for traineeships in England, to fund high quality work placements and training for 16-24 year olds. This funding is enough to triple participation in traineeships. For the first time ever, the Government will fund employers who provide trainees with work experience, at a rate of £1,000 per trainee. The Government will improve provision and expand eligibility for traineeships to those with Level 3 qualifications and below, to ensure that more young people have access to high quality training.

Payments for employers who hire new apprentices

The Government will introduce a new payment of £2,000 to employers in England for each new apprentice they hire aged under 25, and a £1,500 payment for each new apprentice they hire aged 25 and over, from 1st August 2020 to 31st January 2021.

These payments will be in addition to the existing £1,000 payment the Government already provides for new 16-18 year-old apprentices, and those aged under 25 with an Education, Health and Care Plan – where that applies.

High value courses for school and college leavers

The Government will provide £101 million for the 2020-21 academic year to give all 18-19 year olds in England the opportunity to study targeted high value Level 2 and 3 courses when there are not employment opportunities available to them.

Expanded Youth Offer

The Government will expand and increase the intensive support offered by DWP in Great Britain to young jobseekers, to include all those aged 18-24 in the Intensive Work Search group in Universal Credit.

Enhanced work search support

The Government will provide £895 million to enhance work search support by doubling the number of work coaches in Jobcentre Plus before the end of the financial year across Great Britain.

Expansion of the Work and Health Programme

The Government will provide up to £95 million this year to expand the scope of the Work and Health Programme in Great Britain to introduce additional voluntary support in the autumn for those on benefits that have been unemployed for more than 3 months. This expansion will have no impact on the existing provision for those with illnesses or disabilities in England and Wales.

Job finding support service

The Government will provide £40 million to fund private sector capacity to introduce a job finding support service in Great Britain in the autumn. This online, one-to-one service will help those who have been unemployed for less than three months increase their chances of finding employment.

Flexible Support Fund

The Government will increase the funding for the Flexible Support Fund by £150 million in Great Britain, including to increase the capacity of the Job Centre’s Rapid Response Service. It will also provide local support to claimants by removing barriers to work such as travel expenses for attending interviews.

New funding for sector-based work academies

The Government will provide an additional £17 million this year to triple the number of sector-based work academy placements in England in order to provide vocational training and guaranteed interviews for more people, helping them gain the skills needed for the jobs available in their local area.

Protecting Jobs

The hospitality sector plays a vital role in UK life. These sectors are amongst the highest employing sectors across the UK, with over 2.4 million workers in hospitality, accommodation, and attractions, equivalent to 8% of the entire UK workforce. They have also been among the hardest hit by the pandemic and necessary restrictions.

Hospitality and tourism also play a vital role in local economies across the UK, in particular for Scotland, Wales and several regions of England. From Cornwall and Devon to Snowdonia and the Causeway Coast, from Cumbria and the Norfolk Broads to the Highlands and Islands, local communities and economies depend on visitors and these industries to support hardworking business owners and staff.

Although many hospitality, accommodation and attractions businesses have received significant Government support through the job retention scheme, business rates holidays and lending guarantees, the nature of their businesses means that the lockdown has taken a heavy toll and many firms still face great challenges.

As restrictions begin to be eased to make it possible for more businesses up and down the country to re-open, business owners have worked hard to implement the guidelines, taking appropriate precautions to protect their staff and customers. If businesses and customers follow the guidelines, this will allow people to start to return to normality in a safe way.

Eat Out to Help Out

To support around 130,000 businesses and help protect the jobs of their 1.8 million employees, the Government will introduce the Eat Out to Help Out scheme to encourage people to return to eating out. This will entitle every diner to a 50% discount of up to £10 per head on their meal, at any participating restaurant, café, pub or other eligible food service establishment. The discount can be used unlimited times and will be valid Monday to Wednesday on any eat-in meal (including on non-alcoholic drinks) for the entire month of August 2020 across the UK. Participating establishments will be fully reimbursed for the 50% discount.

Temporary VAT cut for food and non-alcoholic drinks

From 15 July 2020 to 12 January 2021, to support businesses and jobs in the hospitality sector, the reduced (5%) rate of VAT will apply to supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafés and similar premises across the UK. Further guidance on the scope of this relief will be published by HMRC in the coming days.

Temporary VAT cut for accommodation and attractions

From 15 July 2020 to 12 January 2021, to support businesses and jobs, the reduced (5%) rate of VAT will apply to supplies of accommodation and admission to attractions across the UK. Further guidance on the scope of this relief will be published by HMRC in the coming days.

Creating Jobs

The housing market has been severely affected by the pandemic, with activity and construction both slowing sharply. Estimates suggest that UK residential transactions in May 2020 were nearly 50% lower than in May 2019.  According to Nationwide, UK house prices fell in the year to June 2020 for the first time in almost 8 years.The outlook for the housing market is closely linked to consumer confidence and therefore central to the economic recovery. Since the market reopened and construction restarted in May, activity has begun to increase.

Temporary Cut to Stamp Duty Land Tax

It is crucial to ensure medium-term confidence in the property market and maintain the growing momentum since the easing of lockdown. To do this, the Government will temporarily cut Stamp Duty Land Tax for home buyers across England and Northern Ireland from £125,000 to £500,000. This will apply from 8 July 2020 until 31 March 2021. Nearly nine out of ten people getting on or moving up the property ladder will pay no SDLT at all.

In England and Wales, an estimated 240,000 people are directly employed by housebuilders and their contractors, and between 500,000 and 700,000 employees are indirectly supported in the supply chain. Moving to a new home also boosts the economy, with estimates suggesting that doing so drives additional spending worth about 5% of the house value.

The government will take further action to improve the energy efficiency of existing homes in order to meet the UK’s climate change ambitions. Heating buildings accounts for around a fifth of greenhouse gas emissions in the UK. Due to the age and design of many buildings, the UK’s housing stock is among the least energy efficient in Europe.

Green Homes Grant

The government will introduce a £2 billion Green Homes Grant, providing at least £2 for every £1 homeowners and landlords spend to make their homes more energy efficient, up to £5,000 per household. For those on the lowest incomes, the scheme will fully fund energy efficiency measures of up to £10,000 per household. In total this could support over 100,000 green jobs and help strengthen a supply chain that will be vital for meeting our target of net zero greenhouse gas emissions by 2050. The scheme aims to upgrade over 600,000 homes across England, saving households hundreds of pounds per year on their energy bills.

The UK construction sector is vital for the recovery of the UK economy. The sector accounts for 7.6% of GDP and employs over 2.3 million workers spread across every UK region, including over 900,000 self-employed workers.

As part of the government’s plans to boost productivity through infrastructure, the government will now focus on how we can build better, greener and faster. A new taskforce to oversee this work has been created (‘Project Speed’).

Construction Talent Retention Scheme

The government is funding a Construction Talent Retention Scheme to support the redeployment of workers at risk of redundancy. This will help retain construction skills and match talented workers to opportunities across the UK.

Office for Talent

The government will create a new Office for Talent based in No.10, with delivery teams across government departments. The Office will focus on attracting, retaining and developing top research and science talent across the UK and internationally.

Direct Air Capture

The government will provide £100 million of new funding for researching and developing Direct Air Capture, a new clean technology which captures CO2 from the air.

Automotive Transformation Fund

Building on the announcement last year of up to £1 billion of additional funding to develop and embed the next generation of cutting-edge automotive technologies, as part of the Chancellor’s recovery measures, the government is making £10 million of funding available immediately for the first wave of innovative R&D projects to scale up manufacturing of the latest technology in batteries, motors, electronics and fuel cells. The government is also calling upon industry to put forward investment proposals for the UK’s first ‘gigafactory’ and supporting supply chains to mass manufacture cutting-edge batteries for the next generation of electric vehicles, as well as for other strategic electric vehicle technologies.

Courts sustainability

The Government will invest £40 million to improve the environmental sustainability of the courts and tribunals estate in England and Wales, investing in initiatives to reduce energy and water usage.

If you have any concerns or want to discuss how the Chancellor’s recovery measures may impact your business from an HR perspective please get in contact with our team of HR experts. We would be delighted to assist you. If you want access to additional resources and information please go to our Coronavirus HR Support Hub

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