Today's Summer Economic Update comes only four months after the Chancellor delivered his first budget in back March. Yet the situation we find ourselves in today couldn't be any more different. As businesses plough on, recovering from the initial shock of the Covid-19 pandemic and planning for a turbulent 6 months ahead, today's Summer Economic Update couldn't have come any sooner.
Our message to government prior to today's update was clear; we need decisive, bold action to support UK manufacturing and protect the almost 3 million people working in the sector. It also demonstrated the government’s commitment to support the next generation of makers – who are the future of British manufacturing and the UK economy. Read our full asks here.
Today’s economic update in the Chancellor’s words, protecting jobs, supporting jobs, and creating jobs. A series of welcomed measures were introduced to support the next phase in our economic recovery, these included:
1. A Job Retention Bonus worth £1,000 per employee for all employers bringing back employees from furlough and continuously employing them until January 2021. This is a one-off payment. Employees must earn above the Lower Earnings Limit (£520 per month) on average between the end of the Coronavirus Job Retention Scheme and the end of January 2021. Payments will be made from February 2021. Further details about the scheme will be announced by the end of July.
3. Expanding traineeships to get young people into work with Government paying employers £1,000 to take on trainees. £111bn will be made available to fund high quality work placements and training for 16-24 year olds. The Government will expand eligibility for traineeships to those with Level 3 qualifications and below too.
5. A temporary VAT cut on food and non-alcoholic drinks from 15 July to 12 January 2021 to support businesses and jobs in the hospitality sector. VAT will fall to 5% with further details to be provided by HMRC in the coming days.
6. An Automotive Transformation Fund providing an additional £10m funding for innovative R&D projects to scale up manufacturing of the latest technology in batteries, motors, electronics and fuel cells.
What next?Our focus post-Covid-19 will be on working with Government, stakeholders and you to build a recovery and economy that is digital, global and green, with manufacturing at its heart. Protecting jobs, access to the right skills, and ensuring young people have access to opportunities are all key to this.
Following today’s Summer Economic Update we’ll be working with Government to protect, support and create jobs in UK manufacturing, as well as continuing to campaign for the change UK manufacturing needs to thrive not just survive in a new economy. Central to this will be pushing our call for a National Skills Taskforce to upskill, retain and inspire the next generation of creators, makers and innovators into UK manufacturing.
Follow @MakeUKCampaigns and join us in backing manufacturing.