Rishi Sunak At His Desk
Sunak said his Summer Statement would leave 'no one without hope'

Sunak’s stimulus to help housing and hospitality

Dan Whelan

Chancellor Rishi Sunak unveiled measures to boost the economy, including raising the stamp duty threshold to stimulate the residential market, offering £2bn to retrofit homes, and reducing VAT for bars and restaurants as they reopen after lockdown. 

Sunak on Wednesday promised to leave “no one without hope” as he unveiled his Summer Statement package to help the country’s recovery from the coronavirus pandemic.

The measures in detail include:

Hospitality support 

A reduction in VAT for bars, hotels and restaurant services, from 20% to 5% for the six months ending January 2021 aims to boost the hospitality industry and lure consumers back to bars and restaurants. The cut in VAT also applies to attractions such as cinemas and theme parks.

“This is a £4bn catalyst for the hospitality and tourism sectors helping to protect 2.4 million jobs,” Sunak said.

To further support bars and restaurants, 80% of which were said to have ceased trading during lockdown, the Government is to give diners a 50% discount on meals eaten in participating restaurants from Monday to Wednesday throughout August, an initiative Sunak called an “Eat Out to Help Out” discount.

“This moment is unique, we need to be creative,” he added.

Bill Addy, chief executive of Liverpool BID Company and chair of Liverpool Visitor Economy Network, said: “Our retail and hospitality sectors have been among some of the hardest hit in the economic shock caused by coronavirus and the Eat Out to Help Out scheme is an added incentive for those who want help reactivate the sector.”

He added: “Cutting VAT to 5% will help people enjoy the city for less and alleviate pressure on our visitor economy. The road to recovery isn’t going to have any shortcuts so we’ll need to continue to work together to encourage confidence, support businesses and rebuild our city.”

Oyster Bar Manchester

Many bars and restaurants reopened at the weekend but those in city centres remained quiet

Housing  

Following a 50% fall in property transactions in May, according to Government statistics, the chancellor cut stamp duty land tax to “catalyse the housing market and boost confidence”.

He increased the stamp duty threshold, the minimum property price for which it must be paid, to £500,000 from £125,000 until 31 March 2021.

The average stamp duty bill will fall by £4,500, the chancellor said. However, units in purpose built build-to-rent and PRS schemes are exempt from the changes.

Melanie Leech, chief executive of the British Property Federation, welcomed the cut in stamp duty but said Sunak had “missed a trick” by not giving BTR investors an exemption from the 3% stamp duty surcharge, which could have boosted the delivery of homes.

Anthony Stankard, founder of the Manchester estate agency Reside, praised the immediate introduction of the stamp duty cut. “It’s a great idea and only logical to introduce immediately as otherwise it would have stalled everything for three months.

“To run it to next April, rather than the end of this year, gives it longevity and will help people plan and make sensible decisions.”

He added: “The current system of a tiered transactional tax has always seemed unfair to me and a barrier to moving. Stamp duty should not apply to anyone buying a house to live in. It should be a tax on second properties and investments.”

Eutopia Homes CGI Dec 2019 Salford Ordsall Lane

The stamp duty cut will not apply to BTR schemes such as Eutopia’s 500 homes in Salford

Green Homes Grant 

Government is making £2bn available to increase the energy efficiency of residential properties.

Homeowners and landlords can apply for up to £5,000 each to retrofit homes, while low-income households can apply for a grant of up to £10,000.

Sunak said that the funding could make up to 650,000 homes more energy efficient and save households up to £300 a year on bills.

A total of 140,000 ‘green jobs’ could be created as a result of the initiative.

The chancellor also pledged £1bn to making public sector buildings more energy efficient and an additional £50m towards a pilot scheme to research the “correct approach to decarbonised social housing”.

Brian Berry, chief executive of the Federation of Master Builders, said: “Grant-funded vouchers are a step in the right direction to launching the retrofitting market, and supporting consumers to build with confidence after the pandemic.

“We hope at the autumn budget the chancellor will bring forward the rest of the £9.2bn [green] manifesto , and support the development of private finance initiatives that will ensure the market grows in a sustainable way.”

Construction

Much of the chancellor’s so-called ‘mini-budget’ centred around creating and retaining jobs in various sectors and the launch of the Construction Talent Retention Scheme has been welcomed by industry professionals.

The scheme will aim to redeploy furloughed staff at risk of redundancy, matching them with employers seeking additional staff.

Diane Bourne, managing director of Eric Wright Civil Engineering and member of the Civil Engineering Contractors’ Association, said: “As a major employer in the North West, we support this scheme.

“Covid-19 has had a major impact with long-lasting effects on the construction sector and now, more than ever, it will be imperative that we work together to retain our best talent while protecting skills and experience across the sector.”

Your Comments

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Legend, Liverpool and Manchester should be very thankful for the last ten years of government

By Lol

I would love to know where his “money tree” is full of bank notes.

By Darren born bred Salford

Hopefully there is flexibility in the stamp duty scheme in respect of the end date as at this rate with the issues with the shortage of plaster in the industry we’ll be lucky to get any houses finished by March 21. The government need to be doing more to get the supply chain working to increased capacity and encourage people not to be hiding behind furlough and get back to work.

By Oscar

Dear Darren, The government via the Bank of England can simply ‘print’ money. Theresa May was, of course, lying when she said there is no ‘money tree’. In fact, all those years of austerity were because of Tory ‘free’ marketist ideology, not a lack of ‘money’. See all Tory manifestos since Thatcher. Govts should ‘borrow’ money to invest and grow the economy, just like big corporations do. Borrow, invest, re-pay your borrowings with the extra profits or tax revenue. Its simple if somebody explains it: but you wont find this simple stuff in the multi-millionaire owned Tory rags: Mail, Sun, Telegraph, Times, Express, etc. Please don’t be offended. I am only trying to explain. No offence intended.

By James Yates

I agree with James Yates. One of the reasons why Germany is so much more successful than us is because they invest heavily during a downturn, so when there is an upturn their infrastructure is ready to motor. We have had a huge opportunity to sort out our roads during this pandemic and again apart from a few schemes very little has been done. Sunak seems to have big ideas. It is nice to have an upbeat Chancellor for a change. Barring accidents he is probably our next Prime Minister so he is cleverly starting his legacy now.

By Elephant

Dear James I dont know where you learned your economics. Was it on the back of a cornflake packet? Of course governments can ‘print money’ . Look at Germany in the 20s and Zimbabwe more recently. When done to excess it can leads to Hyperinflation . Right now they can borrow at extremely low interest rates. This is the sort of situation where Keynes advocated governments to spend to make up for a fall in private spending. But it wont last forever, and it is essential to maintain the confidence of the financial markets, and overseas investors. You cant just spend whatever you want whenever you want. You wont find it in the press, because only an odd selection of extremists believe it. There is no conspiracy

By Anon