Delivering his Summer Economic Update in Parliament, the Chancellor announced a package of measures to “support jobs in every part of the country, give businesses the confidence to retain and hire, and provide people with the tools they need to get better jobs”.
The plan for jobs is the second part of a three-phase plan to secure the UK’s economic recovery from coronavirus. The first stage was “a £160 billion support package, which included £49 billion of extra funding for the country’s vital public services including the NHS, paying the wages of nearly 12 million people and supporting over a million businesses through grants, loans and rates cuts”.
The Chancellor said that following this second phase focusing on jobs, there will be a third phase focusing on rebuilding, with a Budget and Spending Review in the autumn.
- Job Retention Bonus: the Government will introduce 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. The Job Retention Scheme will finish at the end of October as planned, with a phased transition from August.
- Kickstart Scheme: The Government will introduce a new Kickstart Scheme in Great Britain, 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.
- 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. 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.
- 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.
- Eat Out to Help Out: In order to support around 130,000 businesses and to 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. Admission to many charity attractions and properties is exempt from VAT anyway, but details on the scope of the relief will be worth watching closely.
- Temporary Stamp Duty Land Tax (SDLT) cut: The government will temporarily increase the Nil Rate Band of Residential SDLT, in England and Northern Ireland, from £125,000 to £500,000. This will apply from 8 July 2020 until 31 March 2021. Charities are granted relief from SDLT subject to rhe land being held for qualifying charitable purposes and the transaction not being entered into for the avoidance of tax by the charity or any other person.
- 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.
- Green Jobs Challenge Fund: The government will invest up to £40 million in a Green Jobs Challenge Fund for environmental charities and public authorities to create and protect 5,000 jobs in England. The jobs will involve improving the natural environment, including planting trees, restoring habitats, clearing waterways, and creating green space for people and wildlife.
The Plan for Jobs document also recaps funding that has already been announced and implemented. This includes a review of the Job Retention Scheme, VAT deferral, business grants and loans. Also the specific support packages for the charity and arts sectors.
- Charities: The Government has committed £750 million of grant funding to support charities to provide essential services and support to vulnerable people in response to COVID-19.30 Funding has gone to a wide range of organisations, including those who support vulnerable children and victims of domestic violence, hospices, and larger organisations like St Johns Ambulance and Citizens Advice. The government has also donated to charity all VAT due on donations of PPE made between 1 March and 30 April (when the rate was reduced to 0%) and all VAT collected on charity singles released in response to COVID-19.
- Cultural Recovery Fund: The government has committed £1.57 billion to support thousands of arts and cultural organisations through the COVID-19 pandemic. Organisations including museums, galleries, theatres, independent cinemas, heritage sites and music venues will be able to apply for emergency grants and loans.