Chancellor promises UK another £30bn in summer mini-budget
On Wednesday (8 July) Chancellor Rishi Sunak announced a raft of new stimulus measures in a mini-budget aimed at revitalising key segments of the UK economy and stemming a further rise in UK unemployment, which is currently the highest it’s been since 1986.
Under the current furlough scheme, some 9.4m UK workers receive 80% of their wages from the government (up to a maximum of £2,500 a month). The emergency scheme was originally slated to end in July, but was extended to October, with employer contributions. From August, employers must pay National Insurance and pension contributions; from September they must pay 10% of their wage bill rising to 20% in October.
Mr Sunak rejected anxious calls to extend the furlough scheme beyond October on the grounds that it would give “false hope” to those who might no longer have a job to return to. Instead, he announced a government ‘bonus’ scheme that will pay UK firms £1,000 for every staff member retained for three months after the end of the furlough scheme. The bonus scheme could cost as much as £9.4bn.
Elsewhere, the Chancellor cut VAT in the hospitality industry on food, accommodation and tourist attractions from 20% to 5%; a £4bn cash injection aimed at protecting some 2.4m UK jobs.
He also announced a scheme offering Britons ‘50% off’ (terms and conditions apply) when dining out in August. The ‘Eat Out to Help Out’ discount is thought to cost around £500m while safeguarding 1.8m jobs.
Other measures announced included an additional £500m for Wales, a £2.1bn ‘kickstart’ job creation scheme for young people, a temporary stamp duty holiday costing around £3.8bn, as well as a £1.6bn package of loans and grants for the arts sector and a doubling of job centre staff.