Mini-budget 2020: Chancellor Rishi Sunak announces £9bn jobs retention bonus to save furloughed workers and half-price eating out for all Brits

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THE chancellor has announced a £9bn bonus scheme for firms retaining furloughed staff following the coronavirus crisis as part of his plan to revive Britain’s economy.

Rishi Sunak unveiled the sweeping new measures in his summer economic update this afternoon, which included a stamp duty freeze for home buyers and cash to fund half-price eating out for everyone in Britain.

He also set out a scheme of subsidised work placements for under-25s in a bid to avoid a looming wave of youth unemployment.

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The ‘kickstart scheme’ will offer hundreds of thousands of six-month jobs, funded by government, to under-25s on Universal Credit.

Chancellor Rishi Sunak speaking in the Commons. Photo: UK Parliament/Jessica Taylor/PA WireChancellor Rishi Sunak speaking in the Commons. Photo: UK Parliament/Jessica Taylor/PA Wire
Chancellor Rishi Sunak speaking in the Commons. Photo: UK Parliament/Jessica Taylor/PA Wire

Government funding would cover 100 per cent of the minimum wage for 25 hours a week in the scheme that will be open to all employers across the UK, with bosses able to top up wages.

Ahead of the funding splurge, the chancellor said young people ‘bear the brunt of most economic crises’ and would be ‘disproportionately hit’ by the pandemic.

Announcing the mini-budget in parliament, Mr Sunak said the plan would ‘protect, save and create’ jobs but warned ‘more hardships lie ahead’.

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As part of his action plan to boost the economy and revive the housing market, Mr Sunak announced an immediate stamp duty holiday in a bid to revive the UK’s housing market.

The move will temporarily exempt tax on the first £500,000 of homes purchased in England and Northern Ireland, running until March 31, 2021.

Mr Sunak estimated the average stamp duty bill would fall by £4,500, adding: ‘Nearly nine out of 10 people buying a main home this year will pay no stamp duty at all.’

The chancellor told MPs the government would also pay firms £1,000 for each employee the bring back from furlough – which he confirmed would not be extended.

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He said the scheme could cost up to £9bn if every furloughed employee was retained by their firms, telling business chiefs: ‘If you stand by your workers, we will stand by you.’

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Funding also tabled in Mr Sunak’s summer statement included:

A £3bn green package with grants for homeowners and public building to improve energy efficiencyThis includes £2bn ‘voucher’ scheme for households to insulate their homes and make them more energy efficientVAT on hospitality and tourism sector to be slashed from 20 per cent to five per cent – beginning next Wednesday until January 12 in a ‘£4bn move to protect more than two million jobs.In a ‘British first', everyone in the country will get an ‘eat out to help out’ discount from next month, with 50 per cent off food eaten out at participating businesses, worth up to £10

The chancellor warned the the economy contracted by 25 per cent – the same amount it grew over the past 18 years.

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‘And the independent OBR (Office for Budget Responsibility) and Bank of England are both projecting significant job losses - the most urgent challenge we now face,’ he told MPs

‘I want every person in this House and in the country to know that I will never accept unemployment as an unavoidable outcome.

‘We haven't done everything we have so far just to step back now and say, “job done”. In truth, the job has only just begun.’

But Labour's shadow chancellor Anneliese Dodds said the government is ‘yet to rise to the scale of the unemployment crisis’ and said the priority should be to abandon its ‘one-size-fits-all’ approach to ending the job retention and self-employment schemes.

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‘Today Britain should have had a back to work budget but instead we got this summer statement with many of the big decisions put off until later,’ she added.

‘The blunt truth is we have one of the highest death rates in the world and among the deepest economic damage in the industrial world from coronavirus.

‘The very first thing the chancellor must do is prevent additional economic damage due to the slow public health response of his government.’

Lib Dem leadership candidate Layla Moran said the package ‘will sadly be too little, too late for many of the corona class of 2020’.

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However, the general secretary of the Trades Union Congress, Frances O'Grady, welcomed the measure as a ‘good first step’ to prevent mass youth unemployment.

‘But we'll be checking the small print to ensure every job provides proper training and a bridge to steady employment,’ she added.

Among the job measures already announced are a £111m scheme for firms in England to get a £1,000 bonus if they offer unpaid traineeships.

Thousands of jobs have been cut as businesses struggled through lockdown, with Royal Mail, Centrica, easyJet and British Airways among those affected.

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There are fears the UK's unemployment rate could also soar to 14.8 per cent, with job losses comparable to the 1930s, according to the Organisation for Economic Co-operation and Development.

More updates to follow.

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