Chancellor of the Exchequer Rishi Sunak yesterday (Wednesday, July 8) set out a raft of financial measures to "spur the UK’s recovery from the Coronavirus outbreak."
A summary and reaction from national and regional business groups can be found here. Meanwhile, the Summer Statement has received mixed reaction locally.
Job retention and the wider economy
"While the government is incentivising employers to keep staff, for some businesses hit particularly hard, the grant amounts won’t be enough to sway their plans to reduce staff costs," said Oli Thomas, of Purple Lime accountancy.
“Overall there was a positive vibe. It illustrated the second of three phases of the recovery. Phase one was support, this phase is all about jobs with phase three focussed on rebuilding," said accountant Mike Lloyd, of Haines Watts Swindon.
"There were a number of targeted measures to support, create and protect jobs including employer incentives for returning employees from furlough and creating new jobs for young people. The autumn statement to come which will undoubtedly focus on the financial reckoning of how it is all going to be paid for.”
Swindon-based BCS, The Chartered Institute for IT, said moves to pay £2,000 to employers in England for each new apprentice under 25, and a £1,500 payment for each new apprentice aged 25 and over, was good news for the IT sector.
“This is an opportunity to rejuvenate training for young people across the board during these difficult times," said head of apprenticeships Annette Allmark.
“We hope to work in partnership across all sectors of the economy. Many professions, including those in the hospitality, health and care, and the construction industries, now rely on IT and digital skills to do their job.
“What we’ve learned from Covid is that we must embed digital skills into the design of training programmes to future-proof employees so whatever their occupations, their skill base remains robust and resilient."
"The Chancellor's schemes offer a lot of support you the younger generation and I can see training and apprenticeship routes are going to blossom," said Dan Barfoot, operations manager at CMD Recruitment.
"The big concern is for people not in these brackets, as I’m not sure if the £1,000 one-off furlough payment will be enough for the SMEs in Wiltshire – the core of our employers.
"Are we they just asking employers to delaying making cuts, or a delay tactic to see how businesses recover? Whichever way I personally think he’s doing a good job in a bad situation."
"The incentives to bring back employees from furlough and keep them employed, and the temporary stamp duty threshold increase should act as a stimulus for the economy and give the public, and businesses, a little more spending confidence," said Nicki Kinton of Confident Cashflow.
"But with the heavy focus on job retention and supporting the hospitality, entertainment and travel industries there’s not much in it for businesses in other sectors."
And small business owner Jan De Jonge of People Business Psychology said: “Small businesses and especially the many self-employed will still feel rather left out in the stinging cold this summer. It will take a huge effort from central government to try to turn this sentiment around.”
The VAT cut is welcome news for pubs and restaurants, but the ‘eat out to help out’ scheme may not have the desired effect, said Phil Mills, head of food and drink at financial experts Old Mill.
"The cut in VAT will make a huge difference to pubs and restaurants trying to get back on their feet," said Phil.
The Chancellor also announced the slightly less expected ‘Eat Out to Help Out' discount as well as a scheme where businesses will get £1,000 for each staff member taken off furlough and back into work.
"I think these two may have some issues. Pubs and restaurants are usually pretty busy in August and with most people likely to opt for a staycation this year, I am not sure pushing demand over the summer holidays is what’s needed.
"There is a danger that participating pubs and restaurants will see a huge spike in custom for a month which could mask the real state of the business, causing them to take back staff – encouraged by the £1,000 incentive – who they then cannot afford to keep once the ‘Eat Out to Help Out' discount is finished."
Richard Lake, an associate in the leisure and hospitality team at Royds Withy King, added: “Whilst the larger chains will be well placed to prepare and market themselves over the next three weeks, independent restaurants may not - and it is those independents that play a pivotal role in our local communities.
"Independents may be able to pivot more quickly in terms of their offering, but the three-week lead time for the Eat Out to Help Out scheme will play into the hands of better-resourced chains.
"The question is how many will survive the next three weeks to take advantage of diners’ and government’s hospitality."
The holiday from Stamp Duty Land Tax is good news for Swindon homebuyers, according to Iain Mason, head of property services at Optimum Professional Services.
"The Chancellor believes this will stimulate the housing market, which has been affected by falling house prices, and in turn help retain and create jobs. The changes last until 31st March 2021 and apply to house moves completed before then," said Iain.
"Raising the threshold means the average saving per house sale will be £4,500 and will take nine in ten sales out of the SDLT liability. This is quite an expensive move by the Government, whose annual income from Stamp Duty Land Tax is around £12 billion. The nine-month SDLT holiday will cost the Treasury an estimated £3.8 billion.
"According to latest figures, the average property price in the Swindon postcode area is £287k, an increase of £4.2k (one percent) over the last twelve months," he added.