Please find attached update entitled Summer Statement. This includes information from Rishi Sunak and the four key measures which will be put in place following his recent announcement:
▪ A payment of £1,000 per furloughed employee that is brought back to work and retained until January 2021;
▪ A “kick-starter” initiative designed to encourage the creation of jobs for workers aged between 16 and 25;
▪ The elimination of stamp duty on house purchases under £500,000 until the end of March 2021;
▪ A reduction in VAT for the hospitality and entertainment industries and an innovative government funded discount to encourage people to visit newly re-opened restaurants.
From an economic perspective, there is much to like in the Chancellor’s plans. The focus on the creation and preservation of jobs is welcome at a time when the labour market faces its greatest challenge in decades. As ‘entry level’ jobs are highly concentrated in the hospitality and construction industries, efforts to support these areas appears sensible. And, while the bonus for rehiring furloughed workers may only delay a wave of redundancies, it is possible that the economic recovery may be sufficiently advanced by January to ensure these jobs are permanent.
Against these positives, a number of challenges are identifiable. There is little the government can do to discern between furloughed workers rehired because of the £1,000 bonus and those that would have been rehired without it: a portion of the bonus scheme is therefore likely to be a gift from the government to the corporate sector. It is also unclear whether the prospect of £1,000 in January is sufficient to convince companies to accept the cashflow implications of rehiring workers in the interim.
Please click the link below to access the full Summer Statement update:
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