The Chancellor has announced £30 billion of emergency spending to stave off mass unemployment in the wake of the coronavirus pandemic. There is a big difference between a business re-opening and a business succeeding and the Government is looking at ways to stimulate the economy and give businesses a boost. The Chancellor also emphasised the importance of 'animal spirits' - how confident consumers are to spend their money. It is essential both here in Central Devon and across the country that communities resume their normal spending habits as soon as possible and there are measures in the package to encourage this.
In terms of stimulating the economy, the Chancellor has chosen three main routes. The first is to bring forward £8.8 billion of infrastructure investment, including home insulation and green projects, which will create an estimated 140,000 jobs. Low-income households will be among the biggest beneficiaries as they will receive up to £10,000 for insulation improvements that will reduce their future bills by up to £300 a year. The second is to raise the Stamp Duty threshold to 500,000 until March 31st to get the housing market moving and to help tradesman and women (some new homeowners will use the money they would have spent on Stamp Duty to carry out renovation or maintenance work). The third is much-needed support for the hospitality sector. VAT will be cut from 20% to 5% on food, non-alcoholic drinks, accommodation and attractions until Jan 12th and an 'Eat Out To Help Out' scheme will encourage people to go out to eat by offering 50% off meals, up to £10 per person per meal, every Monday, Tuesday and Wednesday in August. Not only will this help participating pubs, cafes and restaurants but it will also help the supply chain, right back to our food producers (the National Farmers' Union has welcomed the scheme).
In terms of direct support for businesses and employees, when the Coronavirus Job Retention Scheme ends, businesses will be paid £1,000 for every furloughed worker brought back to work for at least 3 months. The Chancellor hopes that this will tip the balance for employers contemplating whether they can afford to retain a member staff or not, encouraging them to do so until the end of January when their business and the wider economy may be doing better. A £2 billion fund will also be established to provide training opportunities to 700,000 young people leaving education. This includes paying businesses that hire young apprentices £2,000.
There will also be greater support for those who lose their job. £900 million will be spent on doubling the number of work coaches (an early point of contact for someone who has lost their job) and a new scheme will encourage employers to create new jobs for any 16-24 year old at risk of long-term unemployment by paying their wages for six months plus an amount to cover overheads.
These are extraordinary measures for extraordinary times.