Reaction as Chancellor Rishi Sunak unveils plan to rescue the economy

  • Report by ITV News Meridian's Political Correspondent Phil Hornby:

Chancellor Rishi Sunak has announced a raft of measures worth up to £30 billion as part of his plan to rescue the economy in the aftermath of coronavirus.

Notable parts of the plan include the “eat out to help out” scheme which will see the government offer 50% off, up to £10 per head, on meals out on certain days of the week during August.

Mr Sunak said he wants to get pubs, restaurants, cafes and B&Bs “bustling again”.

As such, there is also a reduction in VAT from 20% to 5% for the next six months on food, accommodation and attractions.

The chancellor said property transactions fell by 50% in May and to get people buying houses again he announced the stamp duty threshold will be increased from £125,000 to £500,000 until March 31, 2021.

As part of Mr Sunak's plan to boost employment, the government will pay £1,000 to employers who bring back staff who have been furloughed.

And £2 billion has been set out to create hundreds of thousands of jobs for young people, with the government set to help pay for six-month placements for under-25s facing long-term unemployment.

On green measures, the chancellor announced a £2 billion “green homes grant” to help homeowners and landlords apply for vouchers to make their properties more energy efficient.

  • Youth employment 'Kickstart Scheme'

Outlining the “biggest package of support for youth unemployment in decades”, Mr Sunak said firms will be encouraged to hire young people on six-month work placement schemes, with the government paying the majority of wages.

The government will pay 100% of the minimum wage for 25 hours per week for young people aged between 16 and 24 who have been hired under the scheme.

"These will be new jobs," the chancellor said, "with the funding conditional on the firm proving these jobs are additional".

Annabel Chaffey, 22, from Maidenhead in Berkshire was furloughed but has now been made redundant.

She has welcomed the Chancellor's 'Kickstart Scheme'.

He added: "These will be decent jobs – with a minimum of 25 hours per week paid at least the national minimum wage.”

He said the hope is for the first people to be in their jobs by autumn, with an initial £2 billion made available and no cap on the number of places available.

He also said employers will be paid £1,000 to take on trainees - they'll also be paid to create new apprenticeships for the next six months.

The chancellor told MPs: “We’ll pay businesses to hire young apprentices, with a new payment of £2,000 – and we’ll introduce a brand new bonus for businesses to hire apprentices aged 25 and over, with a payment of £1,500.”

Mr Sunak said an extra £1 billion would be given to the Department for Work and Pensions to support people back into work.

  • 'The Jobs Retention Bonus'

The “jobs retention bonus” is designed to save the jobs of workers who have been furloughed since lockdown was announced.

He said the “jobs retention bonus” will reward and incentivise employers who bring furloughed staff back.

"It is in no-one’s long term interests for the scheme to continue forever – least of all those trapped in a job that can only exist because of government subsidy.”

"The longer people are on furlough, the more likely it is their skills could fade, and they will find it harder to get new opportunities.

Mr Sunak said this scheme was being announced to replace the furlough scheme, which he said can't be "open forever".

Some £9.4 billion has been set aside by the Treasury to pay for the job retention bonus, which is what the cost will be if all 9.4 million furloughed jobs are restored.

Explaining the scheme Mr Sunak said: “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."

  • 'Eat Out To Help Out' and VAT reduction

Mr Sunak said the eating out discount was something that has "never been tried before in the UK".

“Meals eaten at any participating business from Monday to Wednesday, will be 50% off, up to a maximum discount of £10 per head for everyone, including children.

Businesses will need to register, and can do so through a website which will open on Monday.

“Each week in August, businesses can then claim the money back, with the funds in their bank account within five working days," the 40-year-old said.

Kuti Miah, who owns a restaurant in Southampton, thinks the plan to get customers back is "fantastic" and said he's proud of the Chancellor who grew up in the city and used to work for him as a waiter.

Another part of the plan to help get customers back into restaurants, cafes and pubs is a reduction in VAT.

“So I’ve decided, for the next six months, to cut VAT on food, accommodation and attractions."

Mr Sunak said VAT will be reduced from 20% to 5% from July 15 until January 12 to help, noting: “This is a £4 billion catalyst for the hospitality and tourism sectors, benefiting over 150,000 businesses, and consumers everywhere – all helping to protect 2.4 million jobs.”

  • Stamp duty reduction

The chancellor has announced an increase in stamp duty in order to reinvigorate the housing market after prices fell for the first time in eight years.

He announced he has decided to cut stamp duty, telling the Commons: “Right now, there is no stamp duty on transactions below £125,000.

“Today, I am increasing the threshold to £500,000.

"This will be a temporary cut running until March 31, 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 and nearly nine out of 10 people buying a main home this year, will pay no stamp duty at all.”

Kat Southwell from Wallingford in Oxfordshire is a hopeful house buyer.

She says this announcement couldn't have come at a better time.

Adam Dewar from Simpsons estate agents in Abingdon has also welcomed the news which he hopes will kickstart the housing market.

  • How will the funding be paid for?

The £30 billion announced in Mr Sunak's summer statement means the will have spent at least £160 billion on supporting the economy through coronavirus.

As the deputy director of the Institute for Fiscal Studies, Carl Emmerson, says, the huge sums of cash will come from government borrowing.

He says "these measures are likely to push the deficit further above £300 billion" though he pointed out how borrowing during coronavirus is at "very low interest rates".

How debts are paid off depends on how the economy bounces back after the crisis.

Mr Sunak denied tax rises were inevitable but appeared to concede they are likely.

"Those decisions are always for future budgets but the important thing for now is that we act in a way that is bold that is decisive," he said.

He said creating jobs is the "best way to make sure we have strong economy"

The Treasury has already warned of the “significant fiscal cost” to providing support and finance experts are already warning about the huge forthcoming cost to the taxpayer.

Mr Sunak’s latest round of coronavirus emergency measures adds to the near-£160 billion plan already unveiled since March.