Chancellor’s Summer Statement on Jobs and Green Recovery – with Industry Response

THE CHANCELLOR Rishi Sunak, said the initiatives announced in today’s Summer Statement are set against a context of the IMF forecasting the deepest global recession since records began.

Household consumption – the biggest part of the economy – is steeply falling and there was a 25% economic contraction in April and May – the same amount GDP grew by in the previous 18 years.

Jobs Retention Bonus

The Jobs Retention Bonus gives £1000 per employee to employers who bring someone back into work who was furloughed and are continuously employed until January.

The employee must be paid at least £520 on average, in each month from November to January, the equivalent of the lower earnings limit in National Insurance.

Kickstart Scheme

The Kickstart Scheme will directly pay employers to create new jobs for any 16 to 24-year-old.

Government funding totalling £2billion will pay young people’s wages for six months, plus an amount to cover overheads. For a 24-year-old, the grant will be around £6,500.

The funding is conditional on the firm proving the jobs are additional. Jobs must be a minimum of 25 hours per week paying at least the National Minimum Wage.

Employers can apply to be part of the scheme from next month, with the first Kickstarters in their new jobs this autumn.

In addition, employers will get £1,000 to take on new trainees.

A £100 million was announced to support 18-19-year olds leaving school or college to find work in high-demand sectors, including construction and there will be more places on Level 2 and 3 courses.

Careers advice services will be extended to support 250,000 more people.

Apprenticeships

For businesses hiring young apprentices, there will be a new payment of £2,000 per apprentice.

Also, a new bonus for businesses to hire apprentices aged 25 and over, with a payment of £1,500.

Green Homes Grant

The £2 billion fund for Green Homes Grants was confirmed in the Chancellor’s summer statement.

From September, homeowners and landlords will be able to apply for vouchers to make their homes more energy efficient.

The grants will cover at least two thirds of the cost, up to £5,000 per household.

For low income households the vouchers cover the full cost – up to £10,000.

Public sector energy efficiency fund

A £1 billion fund improving the energy efficiency of public sector buildings was also announced.

A £50 million fund for a pilot scheme examining the right approach to decarbonise social housing.

Rishi Sunak said the Green Homes Grant and other energy efficiency measures will make over 650,000 homes more energy efficient, saving households up to £300 a year on their bills.

The measures will also cut carbon by more than half a mega tonne per year, equivalent to taking 270,000 cars off the road. And create or support around 140,000 green jobs.

Stamp Duty

Stamp duty will be cut on property transactions under £500,000 with immediate effect until 31st March 2021 affecting 90% of house purchases.

Hospitality sector

VAT is being cut to 5% on eat-in or hot takeaway food from restaurants, cafes and pubs; accommodation in hotels, B&Bs, campsites and caravan sites; attractions like cinemas, theme parks and zoos;

The changes apply from 15 July until January 12 2021.

There will also be an Eat Out to Help Out discount of up to £10 per head giving 50% off meals eaten at any participating business, Monday to Wednesday.

Businesses will need to register through a website, open next Monday. Each week in August, businesses can claim the money back, with the funds in their bank account within 5 working days.

Summer Statement Industry Response

Lifeline to construction but focus should now turn to future investment

NFRC Chief Executive James Talman commented:

James Talman CEO NFRC

“The Chancellor’s commitment to protect, support and create jobs is very welcome. His support package on job retention and apprenticeships will act as a lifeline for contractors and manufacturers across the roofing industry.”

“I applaud his recognition for the value of the UK construction industry, in particular, and he has demonstrated this in his support for the new Construction Talent Retention Scheme. We hope this important new scheme will mean specialist contractors including roofers will be retained in the sector should there be a significant downturn, and we avoid the deluge of lost skills seen in previous recessions”

“We tentatively support the Green Homes Grant, but the devil will be in the detail. All those undertaking retrofit should be sufficiently trained and accredited to avoid the mistakes of previous schemes. The government should use existing programmes such as CompetentRoofer and RoofCERT to identify quality roofers for roof associated works. We do feel that an opportunity was missed to not include low carbon energy construction solutions such as solar, too”

“While the government can support job creation in the short-term, in the long-term, jobs ultimately come from private investment. The Chancellor should now turn to taking a longer-term view of how to give commercial clients the confidence to invest. One place to start would be to reform our archaic capital allowance system on buildings and structures”

CPA says Government shows it’s determined to get the economy into recovery phase

Noble Francis, Economics Director at the Construction Products Association

The Construction Products Association’s Economics Director, Professor Noble Francis, said:

“The Chancellor’s Summer Economic Statement showed that government is determined to get the economy into the recovery phase, with some new policies announced after last week’s damp squib of a ‘New Deal’ announcement from the Prime Minister. As ever, it is the delivery of these announcements that will be key.

“The announcement of a Stamp Duty holiday until 31 March will help to give a sustained boost the housing market after a temporary flurry of housing market activity due to pent-up demand. It will be essential however to also see measures aimed at boosting house building, such as increasing the budget for the Affordable Homes Programme, as well as those aimed at boosting the housing market.

“The £2 billion funding towards energy-efficient retrofit of the existing housing stock is potentially very promising; but the devil is in the detail, as government has previously demonstrated on energy-efficient retrofit programmes, in particular given the very poor experience of the Green Deal policy. In addition, £1 billion for insulating public buildings sounds very good but given this is only for one year, it raises the key question of whether government departments and local authorities have the time or resource to spend this effectively. The main risks are that the majority of this money ends up not getting used or that it gets wasted in a rush to spend it. ”

We must use this incentive as a stepping stone to go further to meet the UK’s net zero emissions goals by 2050

Richard Hyams, architect founder of astudio, says

Richard Hyams, architect founder of astudio

“The government’s pledge of a £3bn green investment package to decarbonise public buildings and minimise emissions from homes in the UK is a welcome step, we must use this incentive as a stepping stone to go further if we are to meet the UK’s net zero emissions goals by 2050.

“Buildings and construction together account for over a third of global energy use, and nearly 40% of all CO₂ emissions in the UK. To ensure a green and socially responsible recovery from this pandemic, we need to fundamentally change how we look at these buildings. We think of buildings as absorbers of energy, but they should become generators. Beyond introducing new insulation for public buildings, we should be assessing its carbon footprint, omitting the use of fossil fuels and retrofitting buildings with innovative materials, such as smart glass or “living walls” lined with algae compounds that can generate biofuels.

“New insulation is vital in tackling fuel poverty as well as increasing the sustainability and affordability of existing homes, but we must also remember we face another crisis in affordable housing, with a third of local authorities missing their housebuilding targets even before the pandemic. The government and everyone in the sector must look to more efficient and affordable ways of delivering truly sustainable and accessible homes, and use this and other funded incentives to innovate and change the current broken housing model, technologies such as offsite manufacturing to reduce project timelines, lower carbon and waste production, while sacrificing neither the quality of our buildings nor the safety of the workforce.”

The Green Homes Grant is a great start, but … it can only be the first step on a long and carefully considered investment road

Theresa McLean Director of Superglass insulation

Theresa McLean, Director of Superglass insulation, said: “We welcome the Chancellor of the Exchequer’s proposal for grants to households to fund improvements including installing insulation, but as the climate is a shared endeavour for all of us, we’d like to see it rolled out across the UK and include non-domestic buildings.

“Fully insulating a home is the most efficient way to reduce its carbon footprint. Not only does it prevent energy leakage, it allows other green technology like solar panels, biomass boilers and heat pumps to run more efficiently, and maximises their potential benefits.

“The Government’s Green Homes Grant is a great start, but if we realistically want to meet the UK’s net-zero target by 2050, it can only be the first step on a long and carefully considered investment road.”

Consumer confidence is key in getting the construction industry back up and running to full capacity

Simon Ayers, CEO of Trustmark

Simon Ayers, CEO of TrustMark, the government endorsed quality scheme, said:

“The only way to have a realistic chance of meeting the Government’s carbon neutral 2050 deadline is to improve the energy efficiency of the homes we already have, so this investment from the government is an important step in achieving that goal and starting the development of a long-term plan to retrofit a high percentage of the UK’s homes.

“The focus on green recovery and creating jobs, apprenticeships and momentum through other tax related areas is also good news for the construction industry, particularly small to medium sized house building and trades businesses. It will help protect jobs and create new opportunities for business to retrain and grow. Working with the sectors we will rebuild consumer confidence and support the delivery of quality work and the re-investment from the homeowner into a long-term plan for their property.

“Consumer confidence is key in getting the construction industry back up and running to full capacity, enabling it to make its full contribution to the country’s economic recovery – these measures, alongside our Work Safe, Safe Work campaign will go a long way in encouraging homeowners to have work done in and around their properties.

“However, more needs to be done to provide new and innovative green finance options, alongside the existing products for consumers, as well as the development of a retrofit roadmap for the industry to follow, so we are working to the same goal and delivering quality work that consumers can trust. We will be working with and collaborating across the energy and construction sectors to ensure businesses are supported and consumers can rely on the traders that carry out work in and around their homes making them fit for the future.”

Kickstart measures must lead to long term recovery

Brian Berry, Chief Executive of the Federation of Master Builders (FMB)

Brian Berry, Chief Executive of the Federation of Master Builders (FMB), said: “I strongly welcome the package of measures announced today. While these initial investments will kickstart construction and training, the Government must build on these commitments in the Autumn to ensure that growth and jobs are sustained beyond next year.”

“Grant-funded vouchers are a step in the right direction to launching the retrofit market, and supporting consumers to build with confidence after the pandemic. We hope at the Autumn Budget the Chancellor will bring forward the rest of the £9.2bn manifesto commitment, and support the development of private finance initiatives that will ensure the market grows in a sustainable way.

“We have an army of local builders ready to deliver these works to a high standard, provide local employment, and generate economic activity in each corner of the UK. The Chancellor has demonstrated his willingness to introduce targeted, temporary cuts in VAT. We hope he will retain, as a possibility, a cut to 5% for home improvement works to further boost demand.”

On the support for jobs retention and creation, Brian added “The schemes underpinning job retention, and traineeship and apprenticeship guarantees are welcome news for construction, which has persistently struggled to hire into key trades. The Chancellor is right to highlight the need for a new generation of talent, and support should be directed toward this strategic industry. That 71% of apprentices in construction are trained by local builders, and typically over a three-year period, means the scheme must be accessible to small to medium-sized firms. Converting these short-term measures into long-term jobs requires careful matching of individuals to the right firm. While we train the tradespeople of tomorrow, it’s great news for SME construction firms that they will be able to access the new Talent Retention Scheme to reduce the risk of redundancy.”