The COVID-19 pandemic is the biggest threat the UK has faced in decades. The virus has caused tens of thousands of deaths, has affected the lives of everyone in the country and has had a devastating effect on businesses.
The government took unprecedented action to slow the spread of the virus, save lives and protect the NHS’s ability to cope. Alongside this, the government provided immediate support on a scale unmatched in recent history to keep people in work, protect their incomes, and support businesses.
The government’s furlough scheme has helped employers pay the wages of 9 million employees across the UK. 2.7 million people have been supported by the self-employment income support scheme. Millions of households have received increases in welfare and statutory sick pay, and homeowners have benefited from a mortgage holiday.
Businesses have been supported by tax cuts and deferrals, as well as cash grants, and over a million loans through four government-backed schemes. Public services have been strengthened, with an extra £49 billion allocated, including on funding for the NHS, schools, public transport, local authorities, and tackling rough sleeping.
The collective effort of everyone in the UK to control the spread of the virus means that the economy is safely beginning to reopen. Building on the action taken in the face of the immediate threat posed by the virus, the government is now proceeding with the second phase of its response with a targeted Plan for Jobs.
This will support the UK’s economic recovery while continuing to prioritise people’s health by:
introducing a new Job Retention Bonus to encourage firms to keep on furloughed workers
supporting jobs with direct help to find work and to gain the skills people need to get a job
protecting jobs in the hard-hit hospitality and accommodation sectors and at attractions by supporting demand for these businesses, giving them confidence to reopen
creating jobs with action to get the property market moving, to increase and bring forward infrastructure investment, and to make homes greener, warmer and cheaper to heat.
The UK government is providing support directly to people and businesses in Scotland, Wales and Northern Ireland through the UK-wide measures in the Plan for Jobs. In addition to this the devolved administrations will receive additional funding through the Barnett formula and devolved tax fiscal frameworks.
The recovery will take time and require all the dynamism and creativity that exists across all sectors and in all regions and nations of the UK. The government’s initial response is helping families and businesses through the pandemic, protecting jobs and livelihoods. The Plan for Jobs is the next step towards economic recovery and securing the UK’s long-term prosperity.
The third phase of the government’s plan will be set out in the autumn with measures to support the longer-term recovery through a Budget and a Spending Review. These will detail further plans to invest in public services, to support innovation and growth-enhancing infrastructure with a National Infrastructure Strategy, to seize global opportunities and to level up opportunity across every region and nation of the UK.
A comprehensive list of the announcements is below:
- Job Retention Scheme Bonus - To encourage employers to keep their employees on, we are introducing the Jobs Retention Bonus Scheme, a one-off payment of £1,000 to the business for every employee who was furloughed previously and who is successfully kept on continuously until January.
- Cutting VAT to 5% - From 15 July 2020, we will cut the rate of VAT applied across the UK to hospitality, accommodation and attractions from 20 per cent to 5 per cent until 12 January 2021.
- Eat out to help out - Anyone who eats at a participating business, Monday to Wednesday for the month of August, can receive up to 50 per cent off food and non-alcoholic drinks, up to a value of £10 per person. Businesses can claim the money back from the government weekly, receiving funds within 5 working days. Guidance can be found here.
- Stamp Duty - We are temporarily scrapping stamp duty on all homes under £500,000. From 9 July 2020 until 31 March 2021, we are increasing the threshold at which stamp duty applies from £125,000 to £500,000. Everybody buying a main home will see their tax cut, saving up to £15,000. Stamp duty for the average buyer will fall from £4,500 today to nothing tomorrow.
- Jobs, jobs, jobs - Creating hundreds of thousands of new fully subsidised jobs for young people through a new £2 billion Kickstart Scheme, to give young people the best chance of getting a job.
- Paying businesses £1,000 to take on Trainees, with triple the number of places there are now, to get young people ready for work.
- Providing £2,000 to employers for each new apprentice they hire aged under 25, helping more people into the workplace while developing key skills. We will also provide £1,500 for any apprentice over 25.
- Giving young people who have just left school the skills they need to find work in high-value sectors, such as engineering, construction and social care. We will provide £101 million to help 18 and 19 year olds to take high value courses at Levels 2 and 3 where work opportunities are not available.