Coronavirus update 6 July: Furlough scheme to be wound down sooner? News ahead of Rishi Sunak’s Summer Statement
On Wednesday, Chancellor Rishi Sunak will make his Summer Statement. As the UK emerges from lockdown, all eyes will be on him as he outlines plans to help the economy recover. While it’s difficult to predict what measures he will take, there has been no shortage of announcements over the last few days. We’ll take a look at them in this post, but perhaps the biggest question people are asking is this: “Is the furlough scheme to be wound down sooner?”
Furlough scheme to be wound down sooner?
We already know that the furlough scheme – the Coronavirus Job Retention Scheme – is being phased out. Government subsidies will drop from 80% of wages to 60% by October. The scheme will end at the end of that month.
It is, therefore, unlikely that the furlough scheme will be wound down sooner. On the other hand, despite many business leaders arguing for the scheme to be extended, it’s almost certain it will not be. In an interview with the Evening Standard, Prime Minister Boris Johnson said bluntly that staying at home was “not, in the long-term, healthy either for the economy or for you”.
That said, City AM reports that the Chancellor will be making an announcement on job support this week. Whether that will take the form of a job creation scheme or something entirely different isn’t yet clear. We’ll be providing you with a full update on Wednesday.
£500 vouchers for every adult?
One intriguing story that has been doing the rounds suggests that the Chancellor will give every adult £500 in vouchers. These would be valid to spend with businesses most badly hit by the coronavirus pandemic.
The scheme would be similar to others introduced in China, Taiwan and Malta. According to the Guardian, the Chancellor has refused to rule out such a scheme being introduced here. Hopefully we’ll know for certain later in the week.
£1.57 billion arts funding
If there’s bad news coming in Wednesday’s Summer Statement, Rishi Sunak is certainly busy sweetening the pill. Yesterday the Chancellor announced that the government was ‘introducing a world-leading £1.57 billion rescue package to help cultural, arts and heritage institutions weather the impact of coronavirus.’ The support will take the form of grants and loans for museums, galleries, theatres, independent cinemas, heritage sites, music venues and similar organisations.
What else to look out for on Wednesday
The Guardian has been peering into its crystal ball, suggesting the following areas may be addressed by the Chancellor in his statement.
- VAT cuts – potentially for specific sectors, such as hospitality and leisure, which have been badly hit by the pandemic.
- Business rate reduction – possibly in the form of exemptions or grants for some companies
- Employers’ NI contributions – the Chancellor could raise the threshold at which employers pay NICs. He could alternatively exempt certain age groups, such as the under 30s.
- Stamp Duty Changes – there is a rumour circulating that the chancellor could abolish Stamp Duty for property purchases costing under £500,000 for a period of time to boost the housing market.
Of course, these points are currently speculative. We’ll be following the Chancellor’s statement on Wednesday, so if you’d like an update on his announcements, be sure to sign up for our newsletter. You can do this by filling in the box on the left-hand side of this post.
About Ben Locker
Ben Locker is a copywriter who specialises in business-to-business marketing, writing about everything from software and accountancy to construction and power tools. He co-founded the Professional Copywriters’ Network, the UK’s association for commercial writers, and is named in Direct Marketing Association research as ‘one of the copywriters who copywriters rate’.