JOBS training for young people and VAT cuts for businesses are among the plans expected to be announced by Rishi Sunak this week.
The chancellor will make a summer statement, which has been dubbed the “mini-Budget”, announcing his plans for the next stage of the UK’s economic recovery in the Commons on Wednesday (July 8).
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It will be a follow-up to Mr Sunak’s first Budget on March 11, although this isn’t the autumn statement, which is still expected to take place later this year.
It comes as economic advisers to George Osborne, David Cameron, Theresa May, Philip Hammond, and Sajid Javid – former Prime Ministers and chancellors – have warned that the government’s immediate focus must be “jobs, jobs jobs”.
In a report published today for think tank Onward, the experts said Mr Sunak must focus his full efforts on jobs as the coronavirus pandemic demands an “urgent” response.
Here’s what’s expected to be on the mini-Budget cards.
Creating more Jobcentre roles and helping young people find jobs
Mr Sunak is expected to announce one of the largest increases in front line Jobcentre staff on Wednesday, doubling the number of work coaches to 27,000.
About 270,000 more young people are also set to benefit from jobs advice through a £32million investment in the National Careers Service.
It comes as experts predict youth unemployment will soar from 420,000 to over a million by the end of 2020 as a result of the crisis.
A source close to Mr Sunak said: “The Chancellor’s focus is on protecting and creating jobs and supporting people back into employment, particularly the young.
“Those leaving school or college are going to be entering a tough labour market and if we can’t get them into work quickly, it will have a long-term impact on their lives.”
£1,000 bonus for firms hiring trainees
Mr Sunak has today pledged £111million for a scheme encouraging firms to take on trainees.
Under the initiative, firms in England will get a £1,000 bonus for every 18- to 24-year-old new trainee they take on from September.
As part of the initiative, which lasts from six weeks to six months, young people will receive maths, English and CV writing training as well as guidance about what to expect in the workplace.
National insurance cut for employers
Mr Sunak is thought to be considering slashing employers’ national insurance contributions to spark a hiring spree by virus-hit firms.
It costs an employer £2,400 on average for every person they employ, according to experts at the Institute for Employment Studies (IES).
A source told The Sun in June a cut is being considered by the Treasury but no final decision has been made.
VAT cut for the high street
It was revealed last month that Mr Sunak is considering a temporary VAT cut to get the high street back on its feet – something that’s been called for by trade body the British Retail Consortium (BRC).
Businesses would also be able to defer their VAT spending for another three months, under the economic blueprint.
Some report that a six-month VAT cut could also be on the cards for pubs, restaurants, hotels and other in the hospitality industry.
VAT currently stands at 20 per cent.
Business rates have already been scrapped for 12 months for businesses in the hospitality and leisure sectors regardless of their rateable value.
Firms in these sectors with a rateable value of between £15,000 and £51,000 can also apply for a cash grant of up to £25,000 per business.
£500 voucher to spend in shops
Adults should each be given a £500 voucher and children should get one worth £250 to support firms hardest hit by the coronavirus outbreak, according to the Institute for Fiscal Studies (IFS).
The think tank has urged the chancellor to introduce the move in his statement this week saying it would deliver a £30billion stimulus for the retail and hospitality sectors.
Stamp duty shake-up
It was revealed this weekend that ministers are considering introducing a six-month stamp duty holiday to revive the housing market later this year.
Currently, homebuyers in England and Northern Ireland don’t pay any stamp duty on the first £125,000 of homes, they then pay 2 per cent on the value between £125,001 and £250,000, and 5 per cent on the next £675,000.
The exception to this is first-time buyers, who don’t pay stamp duty on up to £300,000, and then pay 5 per cent on the portion from £300,001 to £500,000.
But one government source told The Sun that a temporary stamp duty threshold could be set at £300,000 for everyone for a period, or it could be set as high as £500,000.
Another measure being looked at is removing stamp duty land tax (SDLT) on vacant land.
The move is designed to take advantage of disused land to boost the development of new house-building projects.
But it’s thought both forms of stamp duty cuts are unlikely to be announced in the economic statement Mr Sunak is giving this week.
Be aware that stamp duty rates are different for those buying a second property in England and Northern Ireland, as well as for those purchasing properties in Scotland and Wales.