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The Chancellor's Economic Update

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On 8 July, the Chancellor addressed the House of Commons to outline his Economic Update and announced, "a plan for jobs". In his speech, Rishi Sunak confronted the "profound economic challenges" facing the nation, revealing that in just two months, the economy contracted by 25% - the same amount it grew in the past 18 years.

The IMF is predicting the deepest global recession since records begun. Despite this outlook, the Chancellor reassured the nation "I will never accept unemployment as an unavoidable outcome" and proclaimed that "no one will be left without hope."

A 'green recovery'

A major part of his plan focuses on creating "green jobs" to enable a "green recovery". He announced a £2bn Green Homes Grant scheme which, from September, will enable homeowners to apply for vouchers to spend on making their property more energy efficient. The grants will cover at least two-thirds of the cost up to £5,000 per household. Secondly, £1bn will be made available to improve the energy efficiency of public buildings. Overall, this £3bn package could make over 650,000 homes more energy efficient and support around 140,000 green jobs.

Stamp Duty holiday

In order to create and support jobs in the housebuilding and property sectors, he said that people needed to feel "confident to buy, sell, renovate, move and improve." Therefore, he announced a temporary increase in the Stamp Duty threshold from £125,000 to £500,000, effective immediately and running through to 31st March next year. He was keen to point out that this measure will mean that nine out of ten people who are purchasing a home in England and Northern Ireland, will pay no Stamp Duty.

Supporting jobs

To support people in retaining or finding jobs, he announced a 'Job Retention Bonus' of £1,000 per employee, for employers bringing back furloughed staff, retained until 31st January 2021. He responded to critics' calls for extensions to the scheme by saying it would be "irresponsible" to give people hope they will be able to return to jobs that only still exist due to furlough. He also announced a £2bn 'Kickstart Scheme' to help younger people find jobs, traineeships and apprenticeships. 

He concluded with his plan to protect jobs in the hard-hit tourism and hospitality sectors, with a "unique" 'Eat Out to Help Out' discount scheme, to attract customers back into restaurants, cafes and pubs during August and a reduction of VAT on food, accommodation and attractions from 20% to 5%, effective from 15th July 2020 to 12th January 2021.

The Chancellor concluded, "We will not be defined by this crisis, but by our response to it." It was his hope he concluded, that plan would "turn our national recovery into millions of stories of personal renewal."

He confirmed a Budget and spending review will follow in the autumn.



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Your home may be repossessed if you do not keep up repayments on your mortgage.

Simmonds Mortgage Services Ltd is an Appointed Representative of Stonebridge Mortgage Solutions Ltd, which is authorised and regulated by the Financial Conduct Authority.

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