A range of measures to rekindle the economy, in the wake of the coronavirus pandemic have been announced by the Chancellor, Rishi Sunak. These include cuts to VAT for the hospitality sector, a £1000 job retention bonus for businesses, a cut to Stamp Duty and an, ‘Eat Out to Help Out’, discount voucher scheme.
In his statement to the House of Commons, the Chancellor summarised plans to give businesses an £1,000 bonus for every employee it brings back from the furlough scheme, adding that if all 9 million workers are brought back, it will result in £9bn being paid out by the government.
He also announced that every person in the country would receive an, ‘Eat Out to Help Out’, discount of 50% (with a ceiling of £10 per head) in August if they go out for a meal from Mondays to Wednesdays.
The cut in VAT for the hospitality sector, currently at 20%, is to be reduced to 5% on accommodation, food, and attractions benefitting the likes of café’s, restaurants, pubs, hotels, cinemas and zoos.
The Nil Rate Band of Residential SDLT (Stamp Duty) will be increased temporarily from £125,000 up to £500,000, in England and Northern Ireland until 31st March.
Mr Sunak, said his plan was designed to support jobs by concentrating on skills and young people.
Amongst the initiatives aimed at younger people, is a new £2bn Kickstart Scheme intended for those 16-24, claiming Universal Credit and at risk of long-term employment. The fund will create six-month work placements.
In addition, a payment of £2,000 will be introduced for employers in England for every new apprentice under 25 they hire, plus from 1st August 2020 to 31st January 2021, a £1,500 payment for every new apprentice 25 and over.
“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.”
Bill Addy, Chief Executive Liverpool BID Company and chair of LVEN (Liverpool Visitor Economy Network) said, “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.”
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