UK coronavirus live: Rishi Sunak unveils stamp duty cut, furlough bonus and August discount for eating out

Samuel Tombs of economics consultancy Pantheon Macroeconomics says Rishi Sunak has given employers an incentive to bring more workers back part time, rather than fewer full time:

ITV’s Robert Peston thinks the August meal deal might just lead to more people eating out earlier in the week, instead of at the weekend.

The UK car industry is unhappy that Rishi Sunak announced no targeted support for their sector today.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, says other countries are providing more help:

Today’s announcements to safeguard jobs and encourage consumer spending in some parts of the economy are welcome – but it’s bitterly disappointing the chancellor has stopped short of supporting the restart of one of the UK’s most important employers and a driver of growth.

“The automotive sector has been particularly hard hit, with thousands of job losses already announced and many more at risk. Of Europe’s five biggest economies, Britain now stands alone in failing to provide any dedicated support for its automotive industry, a situation that will only deter future investment.

There had been speculation that the government might launch a scrappage scheme to encourage people to trade in old cars for new models. Sales in 2020 are down over 48%, to their lowest level since 1971.

Here is the start of a Twitter thread from Faiza Shaheen, head of the Class (Centre for Labour and Social Studies) thinktank, on the summer statement.

And this is her conclusion.

Here’s our Money editor, Hilary Osborne, on the temporary cancellation of stamp duty on property sales up to £500,000:

The cut will make a difference for anyone buying a property over the old thresholds. For first-time buyers, it will generally be those in the south-east and London who stand to benefit, as elsewhere they would typically not be spending more than £300,000.

The saving could allow people to move more quickly than planned – instead of needing the money for tax, they can now channel it towards their deposit.

About half a million households will not pay the tax, according to analysis by the property firm Hamptons. It says 12% of sales are above £500,000 and these will also involve a saving, but the biggest reductions in percentage terms will be at the lower end. A buyer moving to an £800,0000 home will see their bill cut in half, while someone paying £5m will get a reduction of less than 3%.

The tax is paid after a sale is completed, so anyone who is part-way through buying a property will benefit.

More here:

The Institute for Fiscal Studies has released its first full statement on the Rishi Sunak announcement. Here is the overview from its director, Paul Johnson.

Prior to today, the total value of new measures announced since March was thought to stand at £130bn. Today the Treasury revised that figure up to nearly £160bn, with £30bn more being spent on public services, especially health. The chancellor also set out new measures worth a further £30bn.

More support may well need to be announced in the autumn when we know more about the path of the virus and of the economy, but this was another big package from the chancellor. It was focused on the right things, such as jobs for the young, but its size in part reflects how hard it is to target resources only where they are really needed. Much of the job retention bonus cash will be paid in respect of employees who would have (or indeed have already) returned to work anyway, for example.

Here are some other points the IFS is making about the announcement.

• The government has spent an extra £30bn on health services since March, of which £15bn has gone on PPE, according to the Treasury documents.

• The government will be spending almost £190bn on coronavirus rescue measures on the basis of what has been announced so far, almost 9% of what the UK economy produced in 2019-20.

• The kickstart job subsidy scheme for the young is very similar to Labour’s future jobs fund in 2009, which had “lasting positive impacts on the employment of those employed under the scheme”.

• The IFS says that if takeaways had been included in the August food discount scheme, that would be “more effective in increasing output without compromising social distancing”.

• The IFS says there is a risk that the energy efficiency vouchers will “lead to inflated prices of energy efficiency equipment, particularly if the scope of eligible spending is narrow”.

Sacha Lord, nighttime economy adviser for Greater Manchester, is also concerned that pubs that mainly sell beer are not benefiting from the VAT cut:

Lord has welcomed the “Eat out to help out” scheme, but cautions that restaurants and pubs need to maintain social distancing.

[Correction: Greene King CEO Nick Mackenzie didn’t actually mention “traditional pubs” as I mistakenly wrote earlier (now fixed). Apologies. GW]

The Ministry of Justice has announced that cleaners in its central London offices will now receive full pay if they are self-isolating or off sick, our colleague Harriet Grant reports here. The announcement follows Guardian reports in June that the MoJ failed to investigate a potential Covid-19 cluster among its cleaners.

Here is some more reaction to the summer statement from three of the smaller parties at Westminster.

From the SNP’s Treasury spokeswoman, Alison Thewliss:

The chancellor’s statement was a missed opportunity to put building a fairer society at the heart of the recovery – with no measures to boost family incomes or reverse the soaring levels of child poverty and inequality that shame the UK.

The coronavirus crisis has exposed and exacerbated the deep inequalities that a decade of Tory austerity cuts have caused. What we needed today from the chancellor was serious action and investment to put money in people’s pockets. Instead, we got a few sticking plasters and an ‘Eat out to help out’ scheme that shows just how out of touch the Tories are. Many people can barely afford to eat at all, let alone dine out with a small discount.

From the acting Lib Dem leader, Sir Ed Davey:

Totally absent today was any measure to help the millions excluded from Covid support – like new starters, newly self-employed people and freelancers. They haven’t been helped at all so far and yet represent some of the most vulnerable groups. They must not be left behind.

Fundamentally, we need a radically new approach to building a radical new green economy for everyone. We must match the scale of the economic and climate crises with the courage to invest £150bn over three years in a green recovery plan for green jobs in all parts of our country.

Sadly, ministers have fallen far far short of what is needed for people and for the climate.

From Plaid Cymru’s Ben Lake:

We know that local lockdowns will become the new normal, but we still have no financial measures to support them. For weeks we have been calling for local furlough-like schemes, but today the chancellor missed the opportunity to address this obvious upcoming issue.