British Treasury Secretary Rishi Sunak has presented the new stimulus plan for the economy , including a specific youth employment program of 2,225 million euros, the reduction of 20% to 5% of VAT for the hospitality sector and the abolition until March of the transmission tax for the sale of houses for a value of less than 556,000 euros.
The announcement comes a few days after Prime Minister Boris Johnson announced his undervalued version of the “new deal” , with an initial investment of € 5.56 billion in infrastructure, hospitals and schools. The British Government has also decided to approve a package of 3,300 million euros to promote “green employment” and partially extend the job retention program for another six months, with an expected additional cost of 10 billion euros until January.
“We will not allow this crisis to define us , but it will be our response that sets the standard,” said Sunak in his expected summer speech, devoted entirely to the response to the crisis caused by the pandemic, which can cause a down to 14% of GDP this year , according to Bank of England estimates.
The Organization for Economic Co-operation and Development (OECD) has estimated that unemployment could skyrocket in the UK from 3.9% before the pandemic and confinement to 15%, levels not known since the 1980s. Hence the Johnson Government’s determination to prioritize the “boost” program for employment between the ages of 16 and 24, from which 350,000 young people could benefit in the coming months (the State would assume the minimum wage in the new contracts).
“Young people always pay the price of crises , but this time they are at special risk because they work in the sectors hardest hit by the pandemic,” Sunak stressed. “We also know that youth unemployment has a long-term impact on wages, and we don’t want something like this to happen to this generation. So we have put in place a bold plan to protect employment.”
Frances O’Grady , secretary general of the TUC union, welcomed the government’s youth employment plan as “a good initial first step.” “But we will closely monitor the situation to ensure that each job guarantees youth readiness and bridges to steady employment,” he added.
In his appearance in Parliament, the Secretary of the Treasury has also emphasized the need to stimulate the weak real estate market , with the elimination for nine months of the transmission tax on the sale of houses below half a million pounds. The other expected and confirmed announcement has been that of a 5% reduction in VAT on the tourism and hospitality sector , complemented by an unusual measure: the discount of 10 pounds per head (11 euros) for eating out from Monday to Wednesday (before serious problems restaurants are having to regain normal activity). This same week, the British Government also presented a rescue plan for the arts and entertainment sector worth 1.7 billion euros.
However, Sunak’s intervention was received with relative skepticism by the Labor opposition . “What we expected was a new budget devoted to the defense of employment,” answered Labor Anneliese Dodds. “This should have been the day that millions of Britons worried about their jobs should have felt a weight lifted from their shoulders. It should also have been the day of the relaunch of the British economy, and yet we have found that many of the big decisions have been postponed . “