A fantastic "4 Billion" announcement today has been that the government have gone further again!
8th July 2020
A fantastic new announcement today has been that the government have gone further again than we would have expected and have just announced that they will provide a further total of 4 billion pounds support in the Covid 19 pandemic, this is because the government are encouraging us (the public) to go to the pubs and stay in hotels and to invest in spending money in the entertainment and restaurant industry. This is great news for everyone who is willing to go out and who wish to start to socialise in the new normal world of social distancing.
Only time will really inform us if this will be enough (and we all hope that it will be enough) to get people to leave their homes and spend their hard earned cash, which they may be saving. But this is a good move that the government have made and no doubt it will be taken up by many people.
The government are scared of the mass unemployment and potentially homelessness which could come in the following months when the Furlough scheme ends on 31 October 2020 and the Chancellor has now announced that if businesses can bring workers back and can support their workers “we will support you”. This shows a real commitment to help businesses and fight this pandemic head on. The changes are:
- The government have said now that there shall be a 20% Value Added Tax (VAT cut), this VAT cut will focus on tourist attractions, entertainment, restaurant and leisure industry. This will enable us as the general public to go and eat out, spend monies and get good deals in terms of takeaways and buying food in restaurants, this means that your bill in a restaurant could now be half price, this is a massive incentive for us all to get back out into the economy.
- There will also be a new job retention bonus for the sum of £1000 to be paid to employers who willing to bring employees back from the Job Retention Furlough scheme and to keep them on the payroll.
- There will also be 2 billion pounds designated for new job leavers which shall be for 18-25 years olds’ that are leaving school looking for work. There is said to be 7000 school leavers about to leave education in September 2020 and they will be looking for work, the subsidies for taking on school leavers will be to enable businesses to take them on for a 6 month period.
Further announcements have been today:
- 3 billion pounds to be spent on a – green energy efficiency scheme.
- The suspension of Stamp Duty Land Tax, which shall not be paid for property brought with a value of up to 500k, this will be to get the housing market moving and help all first time and existing buyers.
All in all the government are now looking to have expected borrowing of up to £360 billion pounds, with £60 billion pounds already being spent on the Coronavirus Job Retention Scheme, known as the Furlough scheme. To enable the government to afford these measures they will need to borrow £320 billion pounds going forward, and how will this effect the UK economy generally, we do not know but we know that this is most definitely needed to help us move forward and to save jobs and homes.
We have not seen an economic statement like the one that we have just had today in peace times to date, it is therefore an extraordinary statement, although it seems to be that the government are splashing money all over the place and that we will get an (eat out to help out discount) on our bills that will be 50% off our bills if we do decide to venture out. But with people still scared of the Covid 19 virus will this actually work? We do of course hope so, and so does the UK government.
Ministers are very scared of the cliff hanger we are on and in particular in relation to young people and their future prospects. There is a fear of youth unemployment in the retail and hospitality sector and with as stated 7000 school leavers coming into a terrible job sector, and action has now been taken to assist with this crisis. This action is great news for the youth of today.
History shows that young people are often the hardest hit in a recession. Even those coming out of University, they are entering the bleakest job market is history. Young people are scared that they will not be able to pay their rent, young people need the government to put them first and for their to be investment into their jobs and lives. This is a welcomed step today.
The 2 billion pounds worth of funds will subsidence youth placements for 6 months giving school leavers experience in the job market that they really do need to start their working life.
The government want to reassure businesses that they can take staff back and that they will be supported and encourage businesses to give experience of work to the youth of today. The big questions which needs to be addressed is “was the furlough scheme delaying the inevitable or was it really to save jobs for people in the UK”. The government are promising a youth job revolution, and for employers to have a bonus to keep jobs open, but only time will tell if this will all work the way it needs to but for now it is the very best news to hear and will give everyone hope for the future.
At (A City Law Firm), we can advise on all aspects of business law, employment law, the furlough scheme and assist if you are looking to recruit and take on staff please contact us today for a discussion on firstname.lastname@example.org
Author: Sian Stephens A City Law Firm