Today, Rishi Sunak, the Chancellor set out the next steps of his plan to keep Britain working through the pandemic.
With economists warning of a major economic downturn and record levels of unemployment, the Chancellor set out a borrow and spend plan that could have been drafted by Jeremy Corbyn and John McDonnell.
Stamp duty cut
The Chancellor increased the threshold of the property prices which incur stamp duty to £500,000 meaning that most home buyers will now be exempt. The increased threshold will be in place for six months and will begin immediately.
Green Homes Scheme and Green jobs
The Green Homes Grant scheme announced today will provide £2bn worth of vouchers to insulate homes and is expected to create more than 100,000 jobs.
Homeowners will be given grants of up to £5,000 (and £10,000 for low-income families) to spend on loft, wall and floor insulation, eco-friendly boilers, heat pumps, double or triple-glazed windows, low-energy lighting, and energy-efficient doors.
A further £1bn will be spent on ‘greening up’ public buildings including schools, hospitals and social housing.
The Government has also announced a commitment to decarbonise social housing with a pilot scheme to retrofit social housing with heat pumps, insulation, and double glazing, to make them more environmentally friendly.
Incentive for businesses to hire more apprentices
The Chancellor announced a £2,000 incentive to businesses that hire new apprentices aged 16-24 years old.
Government’s new “kickstart” scheme
The Chancellor announced a £2.1bn “kickstart scheme” to create more jobs for young people. The fund will subsidise six-month placements for people on Universal Credit aged between 16 – 24 years old.
An end to furlough
The Chancellor has announced a flexible and gradual ending of furlough until the end of October. Companies will be offered £1,000 for workers they bring back off furlough and keep in work for at least 3 months.
Hospitality sector given a boost
A cut to VAT on hospitality has been announced with VAT on food, accommodation and attractions dropping to 5%. The Chancellor also announced an “Eat Out to Help Out” discount scheme – meals eaten at any participating business will be eligible for a 50% discount (maximum £10 per head) Monday to Wednesday throughout August.
What does it all mean?
This financial statement demonstrates the importance attached to the housing and development sector in getting Britain back to work after Covid-19.
Sunak and the Treasury have been the one Government success in this pandemic. They have been bold, imaginative, and creative. They exude competence and a calm air of authority while their neighbours in Whitehall have been utterly shambolic.
A lot of the credit must go to Sunak himself, who has seen a remarkable rise to the role of Chancellor – he was only elected as an MP in 2015. Today, Sunak is the most popular politician in the UK.
But it’s relatively easy being popular when you’re handing out cake (aka Gordon Brown and Nigel Lawson). It’s much more problematic when taking it away (as George Osborne found).
The scale of intervention dwarfs the measures taken by Gordon Brown and Alistair Darling after the financial crash of 2008. Many in the development sector will welcome the Chancellor’s plans to cut Stamp Duty which they hope will stimulate the housing market through the pandemic.
For now, the nation’s focus is ‘build, build, build.’ At some point, probably the Spring/Summer next year, Sunak and the country will have to start thinking about how we pay all this borrowing back.