Rishi Sunak made a series of announcements in his summer economic update delievered to the House of Commons this afternoon. We’ve pulled together lists of the measures revealed and what was missing from his statement.
The Chancellor kicked off his speech with an outline of what the government has done so far and an explanation of how the plan has progressed as they now “enter the second phase” – focused on jobs. He has certainly taken on board Labour’s “jobs, jobs, jobs” slogan, if not the rest of its advice.
Job retention bonus. Employers will receive £1,000 for every furloughed employee that they bring back to work until at least January. The workers must be paid at least £520 each month on average. If all furloughed employees were brought back this way, the scheme would cost £9bn.
Kickstart scheme. For a six-month period, the government is offering to pay wages and overhead costs when employers give new jobs to 16- to 24-year-olds at risk of long-term unemployment. They must be paid at least the minimum wage and work minimum 25 hours a week. There will be no cap on the number of places. £2bn is being made available to start off.
Apprenticeships. The government will offer £2,000 to employers for every under-25 apprentice they hire, and £1,500 for every 25+ apprentice from August 1st to January 31st. (This is additional to the existing £1,000 payment for 16- to 18-year-old apprentices.)
Green homes grant. From September, home owners and landlords can apply for vouchers to boost energy efficiency, up to £5,000 per household (and up to £10,000 per low-income household). Worth £2bn.
Temporary stamp duty cut. The current threshold for stamp duty is £125,000 (but £500,000 for first-time buyers). It will now be increased to £500,000 for everyone. This takes effect immediately, and until March 31st.
VAT cut for hospitality and tourism. From July 15th to January 12th, VAT will be reduced to 5% on food and non-alcoholic drinks from restaurants, pubs, bars, cafés and similar across the UK, and on supplies of accommodation and admission to attractions.
‘Eat Out to Help Out’. Throughout August, between Monday and Wednesday each week, everyone will be given a 50% discount of up to £10 per head on meals at participating food establishments. Businesses will need to register on a website, which will be up on Monday.
The response provided by Labour’s Anneliese Dodds accused the Chancellor of delivering a statement “with many of the big decisions put off until later”. She pointed out that there was little said for manufacturing, small and medium-sized businesses, and a lack of detail on Project Birch.
The Shadow Chancellor pointed out that the green insulation scheme being proposed here, worth £2bn, is just a fraction of what is being done in other countries such as Germany. There, £36bn for a green recovery was announced, while France has unveiled £13.5bn.
Jonathan Ashworth told LabourList in an interview on Tuesday that funding for the NHS and social care would be a major test for the statement. But there was no extra funding announced – despite the possibility of a second wave of coronavirus.
We also know that local authorities are struggling during this crisis as they have had less money coming in and they have spent huge amounts on supporting people through the pandemic. But they were not mentioned by the Chancellor this afternoon.
There was nothing in the summer statement for renters, nor for the self-employed. Renters have been forgotten throughout the crisis, and many self-employed have been excluded from economic support schemes for poor reasons – such as having only become self-employed recently.
The ‘Eat Out to Help Out’ scheme was probably carefully named to go viral on social media and hit as many headlines as possible. But discounts over 17 days severely underestimates the scale of the crisis in the hospitality sector.
Sunak defended his package of measures by saying that he was prioritising speed over targeted policies. But many of these moves are targeted – just not in the right places. There could have been an early pay rise for those who’ve helped keep the country going at great risk to themselves.
Also missing was a recognition that the pandemic is still here, and people are perfectly aware of that. This means any measures to boost consumption will only be successful if public confidence also increases. And that can only happen if the government gets a grip on the public health situation.
We needed extra funding for health, social care and local government; we needed the government to fill the gaps in support seen since the start of the crisis; we needed serious help for social security, including legacy benefits to be uprated. None of this was delivered.