Commons Live: Chancellor outlines coronavirus financial recovery plans
Rishi Sunak is setting out measures to boost the ailing economy in his summer update to the House of Commons.
The Chancellor is outlining the measures he hopes will boost the ailing economy in the wake of the coronavirus lockdown.
Rishi Sunak’s summer update to the House of Commons comes as he faces pressure to assist those who are most at vulnerable to the effects of the financial crisis.
Ending his statement, Mr Sunak said: “Governments, much less people, rarely get to choose the moments which define them.
“For me, this has never just been a question of economics, but of values: I believe in the nobility of work. I believe in the inspiring power of opportunity. I believe in the British people’s fortitude and endurance. And it is that value, endurance, more than any other, we need to embody now.
“We will not be defined by this crisis, but by our response to it. It is an unambiguous choice to make this moment meaningful for our country in a way that transcends the frustration and loss of recent months.
“It is a plan to turn our national recovery into millions of stories of personal renewal.”
The Commons chamber was quiet and subdued as the Chancellor Rishi Sunak made his economic update.
MPs watched on without the usual cheers or jeers that characterise such statements.
With social-distancing limiting the numbers allowed in the chamber, the public gallery was used by MPs as an overflow space.
As part of those moves to help the hospitality industry, in August everyone can make the most of a “eat out to help out” discount, with meals eaten at any participating business from Mondays to Wednesdays at 50% off, with a maximum discount of £10 per head.
Mr Sunak said this was a unique plan that had never been tried before in the UK.
A VAT cut will help to encourage people to return to the hospital sector with VAT cut from 20% to 5% from next Wednesday until January 12. This will have an impact on eat-in or hot takeaway food from restaurants, cafes and pubs; accommodation in hotels, B&Bs, campsites and caravan sites, as well as attractions like cinemas, theme parks and zoos.
As predicted, the Chancellor is cutting stamp duty – “Right now, there is no stamp duty on transactions below £125,000. Today, I am increasing the threshold to half a million pounds. This will be a temporary cut running until 31st March 2021.
“And, as is always the case, these changes to stamp duty will take effect immediately. The average stamp duty bill will fall by £4,500.”
A £2bn Green Homes Grant will let homeowners and landlords apply for vouchers to make their homes more energy efficient and create local jobs. The grants will cover at least two-thirds of the cost, up to £5,000 per household.
Mr Sunak predicted this would make over 650,000 homes more energy efficient, save households up to £300 a year on their bills and support around 14,000 green jobs.
To support other people returning to work, the number of work coaches in JobCentres will be extended as part of £1.2bn for the Department of Work and Pensions.
Firms that take on trainees will get £1,000 in efforts to support 18-19-year olds leaving school or college to find work in high-demand sectors like engineering, construction and social cares
To support those aged under 25 moving into work, a Kickstart Scheme will offer training and support to find a permanent job.
If employers meet conditions, the wages of each “kickstarter” will be paid for six months. The Chancellor urged every employer, “big or small, national or local, to hire as many Kickstarters as possible”.
The fund will include an initial £2 billion; enough to fund hundreds of thousands of jobs, he said.
Explaining the new bonus scheme, Rishi Sunak told the Commons: “If you’re an employer and you bring back someone who was furloughed – and continuously employ them through to January – we’ll pay you a £1,000 bonus per employee.
“Its vital people aren’t just returning for the sake of it – they need to be doing decent work. So for businesses to get the bonus, the employee must be paid at least £520 on average, in each month from November to the end of January – the equivalent of the lower earnings limit in national insurance.”
The Chancellor said if employers bring back all nine million people who have been on furlough then it would be a £9 billion policy.
He added: “Our message to business is clear: if you stand by your workers, we will stand by you.”
Mr Sunak said those measures were part of the first phase of plans for recovery, “and the second phase – the phase we are addressing today – is about jobs…
“There will come a third phase, where we will rebuild. The PM has set out our vision to level up, unite the country, spread opportunity, and repair and heal the wounds exposed through this crisis.”
Mr Sunak said the UK faces “profound economic challenges”, and that the economy contracted by 25% in two months.
He outlined highlights of the Government’s £160bn plan to protect jobs, incomes and businesses – including the job retention and self-employment schemes and measures for businesses including tax cuts, tax deferrals, direct cash grants, and over a million government-backed loans.
“Analysis I’m publishing today shows our interventions significantly protected people’s incomes, with the least well off in society supported the most.
“And this crisis has highlighted the special bond which holds our country together. Millions of people in Scotland, Wales and Northern Ireland have been protected by the UK Government’s economic interventions – and they will be supported by today’s Plan for Jobs. No nationalist can ignore the undeniable truth: this help has only been possible because we are a United Kingdom.”
The Chancellor introduced his Plan for Jobs, saying “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”.
The Chancellor begins his speech.
He said when he addressed the Commons in March, he said he “knew people were worried”.
“I know they’re worried still. We have taken decisive action to protect our economy. But people are anxious about losing their jobs, about unemployment rising.
“We’re not just going to accept this. People need to know we will do all we can to give everyone the opportunity of good and secure work. People need to know that although hardship lies ahead, no one will be left without hope.”