9th July 2020
The Chancellor of the Exchequer today delivered a statement to the House of Commons outlining Phase 2 of the UK Government’s economic recovery plan.
We have received an update from Scottish Chambers of Commerce laying out the key reserved areas which will apply in Scotland, as follows:
Support for jobs:
- Job retention scheme bonus – employers will receive a one-off bonus of £1,000 for each furloughed employee who is still employed as of 31 January 2021, to provide additional support to firms to keep employees as demand returns. Further details will be available at the end of the month.
- Kickstart Scheme – a £2bn fund to create hundreds of thousands of new, high quality, fully subsidised jobs for young people aged 16-24, claiming Universal Credit and at risk of long term unemployment.
- Expansion of work search support – including a new online one-to-one Job Finding Support offer for the recently unemployed, additional funding for the Flexible Support Fund (including boosting DWP’s Rapid Response Service), doubling the number of work coaches and additional intensive support for those who have been unemployed for more than three months; as well as an expansion of support offered to young job seekers.
- Construction Talent Retention Scheme – an online job-matching platform minimising redundancies in the construction sector by supporting the retention and redeployment of workers across the UK.
Support for the tourism and hospitality sectors:
- Temporary VAT reduction – the UK government will cut the rate of VAT applied across the UK to hospitality, accommodation and attractions from 20% to 5%, for a period of six months. The reduced rate will apply from 15 July 2020 and guidance will be published tomorrow.
- Eat Out to Help Out – a 50% discount on eat in meals and non-alcoholic drinks at participating restaurants, cafes or other food services establishments across the UK. This scheme will be valid Monday-Wednesday during August with the discount capped at £10/head/meal. Participating establishments will be fully reimbursed and registration guidance will be published tomorrow.
- Social Housing Decarbonisation Demonstrator – a £50m demonstrator project to start the decarbonisation of social housing over 20/21, focussing on innovative approaches to retrofitting social housing at scale.
- Decarbonising Public Sector Buildings – investment to upgrade public sector buildings, making them fit to help meet net zero with energy efficiency and low carbon heat measures. This measure is in a devolved area of policy but will apply to the UKG estate across the UK.
- Direct Air Capture – up to £100m to support DAC technologies, as announced by the PM last week.
- UKRI world class labs – A £300m investment in 20/21 to boost equipment and infrastructure across universities and institutes across the UK
We are aware that through the Barnett formula, today’s announcements will result in Scottish Government receiving an additional £800m. We will be working closely with Scottish Chambers of Commerce to ensure that Scottish Government works with business and targets support where it is needed most.
We will update you as we receive further information on today’s announcements and any new support announced by Scottish Government over the coming days.