Rishi Sunak unveils furlough bonus, stamp duty cut and discount meals in 'mini budget'

Chancellor Rishi Sunak has unveiled a multi-billion pound plan to rescue the economy in the wake of the coronavirus pandemic.

The government will reduce VAT in hospitality and leisure businesses, introduce a stamp duty holiday and reward employers that bring back furloughed staff, the chancellor said in his summer statement on Wednesday.

The Chancellor confirmed that the furlough scheme "will wind down, flexibly and gradually, supporting businesses and people through to October".

  • Video report from Luton by ITV News' Rachel Younger

As part of that winding down process, the government will pay £1,000 to employers who bring back furloughed staff up until January.

The plan also includes a new "kickstart scheme" which will help pay for work placements for hundreds of thousands of 16 to 24-year-olds at risk of long-term unemployment.

The government is aiming to provide 30,000 new traineeships for young people across the country.

The key announcements from Rishi Sunak's summer statement:

  • £1,000 bonus for every furloughed worker brought back

  • Stamp duty threshold increases to to £500,000 until March

  • VAT on hospitality cut from 20 per cent to five per cent until January

  • Up to 50 per cent discount on mid-week meals in August

Mr Sunak announced a stamp duty holiday as well, in a bid to boost the struggling housing market which has taken a hit due to the pandemic.

The level at which the tax is charged has been temporarily raised to £500,000 until 31 March.

Currently, all house-buyers in England and Northern Ireland must pay stamp duty on properties over £125,000, or if you are a first-time home buyer you don't need to pay stamp duty unless the property you are buying is more than £300,000.

The hospitality and tourism sectors in the East of England will benefit too, with VAT being reduced from 20 per cent to five per cent for the next six months.

There was an unexpected announcement as well, as the Chancellor revealed that anyone looking to eat out at restaurants in August between Monday and Wednesday can get 50 per cent off sit-down meals and non-alcoholic drinks, as part of the “eat out to help out” scheme.

Mr Sunak said he wants to get pubs, restaurants, cafes and B&Bs “bustling again”.

Pymm and Co estate agents in Norwich Credit: ITV Anglia

Businesses across the Anglia region have been reacting to the Chancellor's summer statement.

The managing director of Pymm and Co estate agents in Norwich has welcomed the plans to lift the stamp duty threshold, but says more still needs to be done.

"The stamp duty change is really going to help the lower end", Steve Pymm said.

"It is going to help the market. What we really need is banks to relax lending a little more.

"We have got several first time buyers who really want to purchase but only have a five per cent deposit and at the moment it is really difficult to get a 95 per cent budget."

Banham Zoo, Norfolk Credit: ITV Anglia

The Zoological Society of East Anglia, which runs Banham Zoo in Norfolk and Africa Alive! in Suffolk, is delighted by the news that VAT on sales at their zoos will be reduced, which could save the charity around £30,000.

"As a charity we rely entirely on visitor income and, while our zoos were closed, we lost nearly £2 million in revenue", Claudia Roberts said.

"This new announcement from the chancellor provides a very welcome relief after a difficult and challenging few months where both our zoos were turned down for the Government zoo grants of £100,000 – the reason given was that assistance was only for zoos who had less than six weeks of cashflow and at the time we had 10 weeks of cash.

"There’s still a long road ahead for our zoos but it’s heartening to see a light at the end of the tunnel.”

  • Cambridge MP Daniel Zeichner gives his observations on the budget

Daniel Zeichner, Cambridge's Labour MP, said he was pleased about the Chancellor's promise to help young people, but wondered whether plans for "green recovery" go far enough.

He said: "Germany is spending £40 billion, France £15 billion and we're just on £3 billion - I think we could have done more on that."

Meanwhile, MP for South Suffolk James Cartlidge praised the furlough bonus.

"I'm confident the economy will recover, and if it does, I think the large number of people who are furloughed will be retained in employment", the Conservative representative said.

"Obviously, we can't guarantee that, but by having this incentive, I think it will say to employers: 'Look, we'll back you if you back your staff and keep them on'. I think that's the right message to send to businesses across the Eastern region."