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Commenting on the Statement, Ryan Shorthouse, director of Bright Blue, said:

“The generous and significant new spending and tax cuts announced today could stimulate substantial economic activity in struggling sectors. But some of the new support seems poorly targeted.

“It seems unlikely that a £1,000 payment to employers for retaining each furloughed employee will be a strong enough incentive to keep people on the payroll, considering that total labour costs per employee will be significantly higher than this in the three month period from the end of October 2020 to the end of January 2021. More generous support for retaining workers beyond Halloween targeted in badly affected sectors would probably be much more effective and efficient than a modest, flat-rate amount for all employers that used the furlough scheme, even for a short period of time and many months ago.

“Our recent research shows that more than two in five businesses participating in the Coronavirus Job Retention Scheme report that they will have to let some, more or all of their furloughed staff go when the scheme comes to a close. The Chancellor will likely need further policies to avoid mass unemployment later in the year.

“Tax cuts really ought to be focussed much more on employment taxes, especially employer’s national insurance. The cut in Stamp Duty will not benefit the overwhelming majority of first-time buyers, apart from affluent buyers typically in London, who already enjoy significant relief on this tax. The Summer Statement already highlights that housing activity, before this announcement, seems to be increasing. And it seems purchasers of second homes will benefit from this tax cut too. In short, cutting Stamp Duty in this way should not have been the priority.”

The Government adopted the following Bright Blue policies:


  • Introduction of the Jobs Retention Bonus, a one-off £1,000 payment to UK employers for every furloughed employee who is employed until end of January 2021
  • Introduction of the Kickstart Scheme, a £2 billion fund for creation of 6-month work placements for 16-24 Universal Credit claimant, with the funding fully covering National Minimum Wage for 25 hours a week in addition to overheads
  • Additional funding for businesses for new traineeships (£1,000 per trainee) and apprenticeships (£2,000 per apprentice under 25, and £1,500 per apprentice over 25)

Commenting, Anvar Sarygulov, senior researcher at Bright Blue, said:

“There should be scepticism about the effectiveness of the Jobs Retention Bonus. The one-off £1,000 payment is likely to be insufficient to change difficult decisions of firms who continue to be profoundly affected by the pandemic, and it will be paid to many businesses who have no real need for it. A more targeted approach for particular sectors is likely to be more beneficial.

“The Kickstart Scheme and the additional funding for both traineeships and apprenticeships should provide many young people at risk of long-term unemployment with a chance to receive work experience and training, even on a temporary basis, that is vital for later job market success and will help avoid permanent scarring on their employment chances. The Government should also be ready to pursue more active labour market policies as the COVID-19 pandemic evolves. 

“It is concerning and inequitable that any further support for self-employed beyond Halloween is absent  from this Summer Statement. With the Self-Employment Income Support Scheme ending in October 2020 alongside the Coronavirus Job Retention Scheme, additional and more targeted support will be needed for those who work for themselves and continue to suffer from the consequences and policies of the ongoing pandemic, but are likely to recover once it ends.”

Hospitality and tourism

  • Temporary VAT cut from 20% to 5% for food, accommodation and attractions until January 2021
  • Introduction of an “Eat Out to Help Out” discount, providing a 50% discount  at participating restaurants in August 2020

Commenting, Anvar Sarygulov, senior researcher at Bright Blue said:

“Undoubtedly, a VAT cut and a subsidy for eating out might prompt some people to book a holiday in England or to visit a restaurant. But it is highly unlikely that a financial incentive created by the Treasury will overcome an individual’s concern about being infected with COVID-19. The main way the Government can ensure that demand for hospitality and tourism improves in the long-term is to successfully contain the pandemic and continue to do so to retain the confidence of the public.”


  • Number of work coaches in Jobcentres to be doubled to 27,000
  • Expansion of the Work and Health Programme for additional support for benefit claimants who have been unemployed for more than three months
  • Expansion of the Youth Offer, an intensive support scheme for those aged 18-24 who claim Universal Credit

Commenting, Anvar Sarygulov, senior researcher at Bright Blue, said:

“Significantly increasing the number of work coaches is a welcome intervention, which has been recommended by Bright Blue in the past. Our previous research has found that most claimants believed that Work Coaches were one of the most aspects of the Universal Credit system. Considering the scale of unemployment that we will soon be facing, increasing staff at Jobcentres is essential for delivering the personalised and targeted support that Universal Credit promises.”


  • Temporary Stamp Duty cut, with the threshold for nil rate increasing from £125,000 to £500,000 until end of March 2021

Commenting, Anvar Sarygulov, senior researcher at Bright Blue, said:

“With most first-time buyers already receiving relief on Stamp Duty, the main beneficiaries of this tax cut are existing homeowners, even those owning multiple properties, meaning this change has little effect in addressing the recent decrease in homeownership. The cut should stimulate more housing market activity in the next nine months, but the Treasury already admits that housing activity seems to be increasing anyway. The Chancellor missed an opportunity to use precious fiscal resources on significantly increasing the building of social housing, which would help the economy and those on the lowest incomes.”

Green Homes Grant

  • £2 billion Green Homes Grant Scheme to pay for retrofits which will save one megaton of carbon, reduce energy bills by hundreds of pounds and create 140,000 green jobs.
  • Low income households will have all retrofit costs covered (up to £10,000). Other households will have government support of £2 for every £1 spent by homeowners or landlords on retrofits up to (£5,000). 

Commenting, Patrick Hall, researcher at Bright Blue said:

“The Green Homes Grant is generous, especially for low income households, and vital support that will help economic growth and our net zero commitment. However, considering the impracticality of retrofitting and that the financial benefits from it accrue in the future, it may be that the grant coverage – two thirds of total costs up to £5,000 – may still be inadequate to drive uptake. The Chancellor should also consider enabling households to take out government-backed loans for the remaining costs householders will face for retrofitting. 

“The Green Deal provided incentives for homeowners to complete energy efficiency measures, but it was unsuccessful in driving change. It is time to go beyond incentives and consider regulation, especially if the introduction of government-backed loans eliminate affordability problems – namely, only being able to sell a house if it has a minimum EPC rating.”

Electric vehicles

  • £10 million for an Automotive Transformation Fund for a first wave of R&D projects to scale up manufacturing of the latest technology in batteries, motors, electronics and fuel cells. In addition to which the government is seeking investment proposals for a UK gigafactory.

Commenting, Alex Griffiths, researcher at Bright Blue, said:

“The Government is rightly funding proven and future technologies to support the vital goal of tackling climate change. However, the consumer market for Electric Vehicles in this country remains nascent, despite the tremendous economic and environmental benefits it could bring. We need the Automotive Transformation Fund to really tackle the barriers to maturing this market, including the upfront costs and poor charging infrastructure.”

Image: Ministry of Housing, Communities and Local Government