It is a mark of the wholly extraordinary times in which we live that the Chancellor had to give us the reassurance that we could enjoy summer safely. And we are sure that when he was appointed to office he could never have dreamt that he would be announcing a scheme under which the government would be subsidising restaurant meals. The sheer scale of the financial support to underpin jobs takes the breath away, but given that the economy shrunk 25% between February and April, intervention to prevent massive unemployment was inevitable. All of this will come at a price. The Chancellor confirmed that there will be a Budget in the Autumn and it is hard to think that this will not mark the start of the clawback of some of the costs of these emergency measures through tax increases though Rishi Sunak was not offering any clues today as to what his long-term thinking might be.

As expected the statement today was fairly light on tax measures, and what was announced had been widely trailed. First of all, the nil rate threshold for stamp duty land tax on residential property transactions will be increased from £125,000 to £500,000. This will take effect immediately and will run until 31 March 2021. The threshold will go down again on 1 April 2021, but we suspect that the Chancellor may be nervous about the knock-on effect of an immediate restoration of the lower threshold on the housing market so it would not be a surprise to see some further announcements on this in the Autumn. Stamp Duty is a devolved matter, so these threshold changes only apply in England and Northern Ireland. We wait to see whether there will be similar changes in Scotland and Wales.

The other key change affects the rate of VAT in the hospitality sector. The current 20% rate will be reduced to 5% for food and non-alcoholic drinks from restaurants, pubs, bars, cafés and similar premises across the UK and also to supplies of accommodation and admission to attractions across the UK. This reduced rate will only come into effect on Wednesday next week (15 July), presumably to give business time to adjust their prices and billing systems. It is only a temporary measure and the standard rate will apply again from 13 January next year. We await detailed guidance from HMRC on the exact definition of the supplies which will benefit from the reduced rate.

As we expected there are no plans to extend the Coronavirus Job Retention Scheme. It will cease at the end of October. A range of incentives will be introduced to replace it, including a job retention bonus, under which employers will be given a one-off payment of £1,000 for every furloughed employee who remains continuously employed through to the end of January 2021. To qualify 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. We expect further announcements filling in the details over the next days and weeks.

The Chancellor's assured performance in delivering this statement can have done his reputation no harm. But it is obviously easier to make a positive impression when handing out money, particularly on this unprecedented scale. The real test will come in the Autumn when we see what tough decisions have to be taken to restore long-term economic health.

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