Image Courtesy of Flickr_Ishan Manjrekar

Summer Statement 2020

An unprecedented Summer Statement was delivered today by the Chancellor of the Exchequer, Rishi Sunak.

Although the economy is starting to open up gradually after its pandemic-enforced quarantining, the chancellor’s statement is an attempt to stem the damage from a forecast 14% slump in GDP this year, according to the Bank of England, and a potential rise in the unemployment rate from 3.9% to 15%, according to the Organisation for Economic Cooperation and Development.

About the Budget

This snapshot is not an in-depth analysis but aims to give you a quick summary of the key points announced by the Chancellor from the dispatch box.

More details are available from GOV.UK

Main Headlines from the Speech

Introduction

  • Extraordinary measures introduced to offset effects of Covid-19 virus
  • £160bn spent by Government in addressing the Corona virus crisis
  • Economy contracted by 25% in first six months of year
  • Government will not be defined by the crisis, but by their response to it

 

Economic Measures

  • Three point strategy to support, protect and retain jobs
  • Furlough scheme to be wound down gradually from October
  • £1,000 bonus payable to employers for retaining furloughed employees
  • ‘Kickstarter’ job package for 16-24 year olds
  • Government subsidy worth up to £6.5k for each employee taken on under Kickstart Scheme
  • £2,000 bonus for employees taking on trainees
  • £1,500 bonus for apprentices over age 25
  • Companies able to apply for job subsidies within one month
  • Additional funding for the National Careers Service
  • Help for long term unemployed
  • £1.6bn additional funding for DWP

 

Infrastructure/Housing

  • £3bn scheme to make homes and buildings more environmentally friendly
  • £2bn Green Homes Grant to make homes energy efficient – up to £5k per household
  • £1bn to improve energy efficiency of public buildings
  • Property transactions fell by 50% in May
  • Stamp duty threshold raised to £500K (from £125K) until 31/3/21 effective immediately.
  • Predicted 9 out of 10 people will pay no SDLT this year.

 

Hospitality and Tourism

  • 1.8 million people employed in the hospitality and tourism sector. 1.4million workers in the sector have been furloughed. 80% of sector stopped trading in April
  • VAT on food, accommodation and attractions to be cut to 5% from 15 July until Jan 12th 2021
  • August special – ‘Eat out to help out’ – 50% discount available Mon to Weds worth up to £10/head (at participating establishments).

 

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