Mini-Budget 2020: Key points from Rishi Sunak’s summer statement

Mini-Budget 2020: Key points from Rishi Sunak's summer statement

On 8th July, Chancellor Rishi Sunak’s summer statement unveiled new Government measures to boost the UK economy in the wake of the coronavirus lockdown. Speaking in the House of Commons, Sunak delivered his recovery plan, noting that the job of responding to the crisis has “only just begun”.

The £30bn mini-budget marks the second phase of the government’s economic response, aiming to put public finances back on a “sustainable footing”. Key announcements included eating out discounts, stamp duty and VAT cuts, and plans to support job retention and creation.

Despite the measures being criticised by some as not being enough, the package is still welcome news to the majority. Those working in the hospitality sector are hopeful that the statement will provide a boost in confidence and encourage people to start leaving the house and spending more. And, for those worried about jobs, the announcements offer support for both individuals and businesses, helping both parties get back on track.

Key points from the mini-budget

  • VAT cut for hospitality

It’s good news for the hospitality sector; VAT will be cut from 20% to 5% in a bid to increase consumer spending and save jobs. This move comes into effect from 15th July and will remain until 12th January 2021.

  • Eat out to help out discount

This discount offers 50% off meals and non-alcoholic drinks, up to a maximum of £10 per head, at eligible cafes, pubs and restaurants. The offer will run from Mondays to Wednesdays, throughout August. Eateries wanting to participate will be able to register for the scheme via a simple website as of next Monday.

  • Furlough scheme

With the current furlough scheme gradually winding down between now and the end of October, a job retention bonus has been introduced, encouraging businesses to retain their furloughed employees. Employers will receive a one-off £1,000 payment for each furloughed employee retained up until the end of January 2021.

  • Supporting young workers

Sunak announced a kickstart scheme. The £2bn fund is to pay for six-month work placements for those aged between 16-24, who are at risk of long-term unemployment and claiming Universal Credit.

Bonuses will also be provided to support apprenticeships. A £2,000 grant will be paid to firms for each apprentice they take on under the age of 25, with £1,500 paid for each apprentice over 25. The bonus scheme starts on 1st August and will run for six months.

  • Stamp duty

If you’re looking to buy a house, then you could be in luck! In a bid to restore the housing market, the threshold where you start paying stamp duty has been increased from £125,000 to £500,000, with immediate effect. The temporary cut will run until 31st March 2021.

  • Green homes grant

The Chancellor stated that the government wants a “green recovery”, introducing a new ‘green homes grant’ scheme. Under the scheme rules, homeowners will be able to claim up to £5,000 in energy-saving vouchers towards insulating their homes, helping to cut carbon emissions. For more vulnerable families, vouchers of up to £10,000 will be made available.

Coming out of lockdown

It was always going to be daunting to come out at the other end of lockdown, but it’s important to remember to take things at your own pace. Only you will know what your perception of risk is and how comfortable you are in leaving the house. It’s great that the government is trying to kick start the economy again and encourage spending, but that doesn’t mean you have to rush out if you’re not ready.

As we’ve said before, your health, physical and mental, is priceless. Taking care of yourself and others around you is essential, never more so than now.

If you do have concerns or worries, then we can’t emphasise enough the importance of talking about them. A problem shared truly is a problem halved. We appreciate that sometimes it can be hard to talk to people you know, so please remember the brilliant service offered by the Samaritans. Call 116 123 any time, day or night, or if you’d prefer to put your thoughts down in writing email

You can also find the latest government guidance on how to stay safe if you are out and about here.

If you have any questions or would like to discuss any aspect of this article, please get in touch and speak to one of our financial planners.