Managing director of Newport-based Kymin Robin Hall takes a closer look of what the Chancellor Rishi Sunak's summer statement might mean for the economy.

The UK economy has contracted by 25 per cent in two months - as much as it had grown in the previous 18 years and the IMF is predicting “the worst economic downturn since the Great Depression”.

Rishi Sunak openly acknowledged during his statement that “hardship lies ahead".

Four months since we went into lockdown, Mr Sunak said it was now time for the second phase of the country’s response – a focus on jobs.

The Chancellor said the furlough scheme would wind down, “flexibly and gradually” through to October.

To date, the scheme helped employers pay the wages of nine million employees across the UK and 2.7m people have been supported by the self-employment income support scheme.

Mr Sunak announced that the Job Retention Bonus will pay employers a one-off bonus of £1,000 for every employee who, having been furloughed, returns to full-time employment in November and is employed through to the end of January and earning at least £520 per month.

Over the weekend Primark has announced they will not be subscribing to the bonus.

Rishi Sunak then moved on to his “three-point plan” for jobs, focused on helping people to find jobs, creating jobs, and protecting jobs.

Much of the focus was on young people. His measure to help tackle this problem was the Kickstart Scheme. Starting in the autumn it will directly pay employers to create new jobs for young people aged 16-24 who are on Universal Credit, with the jobs paying at least the minimum wage for 25 hours a week. The government will cover six months of wages plus the associated costs, worth around £6,500 per person on the scheme. The Chancellor made an initial £2.1bn available.

For the next six months the government will pay employers to create new apprenticeships, with companies receiving £2,000 for each new apprentice they hire. The Chancellor stated that 91 per cent of apprentices stay in work when their apprenticeship ends. There would also be specific help for ‘over 25’ apprentices, with employers paid £1,500 for each older apprentice.

He then outlined plans to build on the £88bn of capital spending announced in the March Budget and the extra £5bn announced by the Prime Minister last week. As he put it, the government was “doubling down on levelling up.”

From September, with the “Green Homes Grant” householders will be able to apply for grants of up to £5,000 to cover two-thirds of the cost of energy-efficient home improvements. Low income households will be able to apply for grants of up to £10,000 to cover the whole cost. Treasury estimates say this could save people an average £300 per year and support 140,000 local, green jobs. The scheme aims to upgrade approximately 600,000 homes across the UK and will also apply to landlords.

He also announced a ‘green audit’ of public sector buildings in a broad move designed to “save money, cut carbon and create jobs”.

A temporary cut to stamp duty until March 31 next year was also announced for England and Northern Ireland. We have yet to see whether this will apply to Wales and Scotland.

Two new measures were announced to help the hospitality and tourism industries which employ two million people, with 80 per cent of firms having stopped working during lockdown and 1.4 million workers furloughed.

Firstly, a temporary reduction in VAT from 20 per cent to five per cent, from July 15 to January 12 next year. The Chancellor described as a “£4bn catalyst” to protect 2.4 million jobs. The reduced rate will apply to supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafes, and similar premises.

Under the next initiative throughout the month of August, you can ‘eat out to help out’ and – from Monday to Wednesday’ – receive up to 50 per cent of a meal up to the value of £10 per head, in a bid to ‘help out’ 130,000 businesses and their 1.8 million employees.

The government also outlined plans to invest £1bn over the next year in a Public Sector Decarbonisation Scheme. This will offer grants to public sector bodies, to fund energy efficiency and low carbon heat upgrades.

Sunak’s support for home-buyers went beyond the stamp duty cuts. The government also confirmed a £12.2bn Affordable Homes Programme, supporting up to 180,000 new affordable homes for ownership and rent in England over five years, with most of these built by 2025-26. The government will also introduce new legislation during the summer to make it easier for people to build homes in the places they want to live. These regulations will make it easier to convert buildings for different uses, including housing, without the need for planning permission

There was also additional NHS funding announced. Whether all these initiatives will apply to Wales is not yet known, but the UK Government will provide £2.8bn through the Barnett formula to help the Welsh Government support the economy through Covid-19.