Northern Ireland

Chancellor's summer statement offers up £155m of new money to Stormont Executive

Chancellor Rishi Sunak announced that stamp duty was being abolished on transactions below £500,000 until next March
Chancellor Rishi Sunak announced that stamp duty was being abolished on transactions below £500,000 until next March Chancellor Rishi Sunak announced that stamp duty was being abolished on transactions below £500,000 until next March

STORMONT finance minister Conor Murphy has been handed new funds to replicate a scheme in Britain to limit the potential scarring from youth unemployment.

Chancellor Rishi Sunak, in a summer statement to the House of Commons, outlined a fresh coronavirus economic recovery package, including measures to keep people in work and boost skills.

His new 'Kickstart' initiative, targeting 16-24 year olds, will provide employment opportunities and the national living wage for six months, with no cap on numbers.

But it doesn't apply in Northern Ireland, and the Executive will use part of its additional £155 million of 'Barnett consequentials' money to bring forward its own version of this vital area of the post-Covid economic recovery.

The chancellor's mini budget outlined a number of other initiatives to stimulate the economy as it begins to emerge from lockdown.

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Key among them was a decision to cut VAT on food, accommodation and attractions from 20 per cent to 5 per cent for six months from next Wednesday until January 12 next year.

It offers the hospitality sector a significant boost, allowing it to compete on an all-island basis as it returns to trading, though it will doubtless push to have the cut made permanent.

During the month of August, consumers will also be able to get 50 per cent off a meal out - at up to £10 off per head - at pubs and restaurant on Mondays to Wednesdays in what the chancellor said was another bid to help save jobs.

He also offered employers a £1,000 bonus for every furloughed worker they bring back between now and January.

Some 212,000 workers in Northern Ireland available of the furlough scheme, potentially equating to £212 million is everybody is brought back.

The chancellor also announced a cut to stamp duty for houses up to £500,000 effective immediately, to run until the end of next March.

But given that average house price is the north currently stands at £140,580, removing the 2 per cent duty would only represent a saving to the average purchaser of less than £350 - much lower than other regions of the UK.

Other measures announced around environmental issues may not be replicated directly in Northern Ireland, and it will be up to the Executive to decide if it wants to focus supports in the same way or tweak how they use the money to best fit the economy’s specific needs.

The Chancellor's statement comes after warnings from the Organisation for Economic Co-operation and Development that the UK's unemployment rate could soar to almost 15 per cent, with job losses comparable to the 1930s.

Mr Sunak said his plan would help protect livelihoods after the economy contracted by 25 per cent in just two months.

"We have taken decisive action to protect our economy.

"But people are anxious about losing their jobs, about unemployment rising. We're not just going to accept this.

"People need to know we will do all we can to give everyone the opportunity of good and secure work.

"People need to know that although hardship lies ahead, no-one will be left without hope."

Mr Murphy said the measures were welcome but did not go far enough.

“The announcement of an additional £39m for economic recovery as well as the further £116m for Covid-19 is a welcome boost towards the Executive’s Covid-19 response," he said.

“It is important we act quickly, and I will be discussing the prioritisation of this funding with my Executive colleagues as a matter of urgency.

“The cut in the VAT rate and the job retention bonus scheme are also welcome measures, as is the Eat-Out-to- Help-Out discount scheme.

“But the measures are not ambitious enough to spur economic recovery as Covid-19 will continue to have a dramatic impact on our economy for some time to come.”