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Chancellor Rishi Sunak unveils 'job retention bonus' Chancellor Rishi Sunak cuts VAT in emergency plan to save jobs
(30 minutes later)
Chancellor Rishi Sunak has unveiled a plan to keep furloughed workers in their jobs when the scheme ends in October. 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.
If employers keep workers in their jobs until January 2021 they will get a £1,000 bonus per employee. 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.
The scheme could cost as much as £9bn if every furloughed worker is covered, the chancellor told MPs. And he announced a scheme to give 50% off to people dining out in August.
It is part of a package to prevent mass unemployment as the coronavirus crisis hits the economy. Mr Sunak warned "hardship lies ahead", but vowed no-one will be left "without hope," in a statement to MPs.
He said leaving the furlough scheme open would give people "false hope" that they will have a job to return to. 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". 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.