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Chancellor Rishi Sunak cuts VAT in emergency plan to save jobs | |
(30 minutes later) | |
Chancellor Rishi Sunak is to cut VAT for hospitality and tourism as part of a package to prevent mass unemployment as the economy is hit by coronavirus. | |
The government will also pay firms a £1,000 bonus for every staff member kept on for three months when the furlough scheme ends in October. | |
And he announced a scheme to give 50% off to people dining out in August. | |
Mr Sunak warned "hardship lies ahead", but vowed no-one will be left "without hope," in a statement to MPs. | |
He rejected calls to extend the furlough scheme beyond October, saying it would give people "false hope" that they will have a job to return to. | |
But he said he would "never accept unemployment as an inevitable outcome" of the pandemic. | |
Cut to 5% | |
The "job retention bonus" could cost as much as £9bn if every furloughed worker is covered, he said in his statement. | |
"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. | |
"It's vital people aren't just returning for the sake of it - they need to be doing decent work. | |
"So for businesses to get the bonus, the employee must be paid at least £520 on average, in each month from November to the end of January - the equivalent of the lower earnings limit in National Insurance." | |
He told MPs he will cut VAT on food, accommodation and attractions from 20% to 5% ,from next Wednesday. | |
This cut will apply to eat-in or hot takeaway food from restaurants, cafes and pubs, accommodation in hotels, B&Bs, campsites and caravan sites, attractions like cinemas, theme parks and zoos. | |
Rishi Sunak said this "£4bn catalyst" would help protect "over 2.4 million jobs". | |
Mr Sunak also announced an "Eat Out to Help Out" discount, which he said would help protect 1.8 million jobs. | |
Meals eaten at any participating business, Monday to Wednesday, will be 50% off in August, 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, open next Monday and apply in the month of August, the chancellor said in his statement. | |
Stamp duty holiday | |
The chancellor also announced a £2bn "kickstart scheme" to create more jobs for young people. | The chancellor also announced a £2bn "kickstart scheme" to create more jobs for young people. |
The fund will subsidise six-month work placements for people on Universal Credit aged between 16 and 24, who are at risk of long-term unemployment. | The fund will subsidise six-month work placements for people on Universal Credit aged between 16 and 24, who are at risk of long-term unemployment. |
Mr Sunak also announced a temporary stamp duty holiday to stimulate the property market. | Mr Sunak also announced a temporary stamp duty holiday to stimulate the property market. |
This would exempt the first £500,000 of all property sales from the tax. | This would exempt the first £500,000 of all property sales from the tax. |
The chancellor outlined a number of other measures in the build-up to his statement, including: | The chancellor outlined a number of other measures in the build-up to his statement, including: |
Details of how the package will be paid for - through borrowing and possible tax rises - are likely to be unveiled in the chancellor's Autumn Budget. | Details of how the package will be paid for - through borrowing and possible tax rises - are likely to be unveiled in the chancellor's Autumn Budget. |