Various measures have been announced today to get the economy going again, but do they go far enough?
VAT will be cut on food, accommodation and attractions from 20% to 5%, from Wednesday 15 July 2020 and run up to 12 January 2021.
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.
Changes to Stamp Duty
A temporary holiday on stamp duty on the first £500,000 of all property sales in England and Northern Ireland, starting immediately and running until 31 March 2021.
Homeowners and landlords will be able to apply for vouchers to make their homes more energy efficient and create local jobs the grants will cover at least two thirds of the cost, up to £5,000 per household.
The scheme attempts to encourage employers to offer a high quality 6-month work placement for people aged 16-24 who are on Universal Credit and deemed to be at risk of long-term unemployment. The scheme will cover 100% of the relevant National Minimum Wage and associated employer costs for the individual during the placement.
If you bring some back who was furloughed, and you continue to employ them to January the government will pay you a £1,000 bonus.
Employees must be paid at least £520 per month each month through to January. Further details of the scheme to be released by the end of the month.
Rishi Sunak announced the government will give everyone 50% off meals in participating restaurants during August. The discount can be used unlimited times, Monday to Wednesday on eat-in meals. Alcoholic drinks will be excluded from the scheme.
Businesses which participate in the scheme will be fully reimbursed for the 50% discount. The discount will go up to £10 per head for adults and children.
In order to get the economy going, people need to feel confident in going out and spending, unfortunately this is not coming across strong enough from the Government or the media, and that’s the first problem.
Feedback suggests that you can put people into 3 bands
1. Those who won’t go out due to fear of catching the Virus.
2. Those that want everything to go back to normal and they’ll take a chance.
3. And finally those that have been shopping, out for a meal or the pub already and find that social distancing is ruining the experience and will not return until things are “normal”
The other problem is that while social distancing remains in place, most pubs and restaurants can only run at 1/5 capacity, therefore only covering costs and not making a profit, the question is, how long can they do that for?