Chancellor outlines plans to boost economy. Read Liverpool’s response
A range of new measures to boost the UK economy, in the wake of the Covid-19 pandemic have been announced by Chancellor Rishi Sunak. They include VAT cuts for the hospitality sector, a Job Retention Bonus for companies, a Stamp Duty cut and an ‘Eat Out to Help Out’ discount.
In a statement to the House of Commons, Sunak outlined plans to give businesses an £1,000 bonus for every employee it brings back from the furlough scheme from November to January.
The Chancellor said that if all nine million people are brought back to work, it would result in £9bn being paid out by the government.
Sunak also announced that every person in the UK would get an ‘Eat Out to Help Out’ discount of 50 per cent off, up to £10 per head, in August if they go for a meal between a Monday and a Wednesday.
He revealed a cut in VAT for the hospitality sector from 20 per cent to 5 per cent on food, accommodation and attractions. It would apply to the likes of restaurants, pubs, hotels, cinemas and zoos.
The Nil Rate Band of Residential SDLT (Stamp Duty) will be temporarily increased from £125,000 to £500,000 until 31 March 2021.
The Chancellor said his plan was designed to support jobs by focusing on skills and young people.
Among the initiatives targeted at younger people, a new £2bn Kickstart Scheme is being brought in for Great Britain. This fund will create six-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.
A payment of £2,000 will also be introduced 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.
“Throughout this crisis I have never been the prisoner of ideology,” Sunak said. “For me, this has never just been a question of economics, but of values.
“We believe in the nobility of work. We believe in the inspiring power of opportunity. We believe in the British people’s fortitude and endurance.
“Our plan has a clear goal: to protect, support and create jobs. It will give businesses the confidence to retain and hire. To create jobs in every part of our country. To give young people a better start. To give people everywhere the opportunity of a fresh start.”
Chris Brown, Director of Marketing Liverpool, said:
“I’m glad the chancellor sees that tourism and hospitality are huge drivers of our economy and need urgent help. The reduction of VAT to 5% is the sort of big change needed and will provide a noticeable boost to businesses. We also welcome the voucher scheme as a way to get people eating out in quieter times and look forward to seeing more details on how this will actually work. The challenge remains, however in addressing the implications to the sector, once these short term initiatives expire.”
“Our retail and hospitality sectors have been among some of the hardest hit in the economic shock caused by coronavirus so we welcome any support coming their way.
“The businesses we work with have been reopening slowly, with a commitment to public health. The Eat Out to Help Out scheme is an added incentive for those who want to dine out safely on quieter evenings and help reactivate the sector.
“The cut to VAT to 5% will help people enjoy the city’s visitor economy for less and alleviate pressure on our visitor economy.
“Preserving jobs is going to be the cornerstone of any economic recovery in Liverpool, particularly those currently furloughed. The newly announced measures to help businesses retain employees and to invest in younger workers will contribute to protect communities across the UK.
“The road to recovery isn’t going to have any shortcuts so we’ll need to continue to work together to encourage confidence, support businesses and rebuild our city in a way that’s safe and welcoming.