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Chancellor Sets Out Summer Update

What’s the latest?
The chancellor has unveiled a raft of new economic measures aimed at aiding Britain’s recovery from the coronavirus crisis. Announcing his summer statement on Wednesday, Rishi Sunak said Britain was entering the second phase of the government’s response to the pandemic but emphasised that the task of responding to the crisis had “only just begun”. The package of policies includes a VAT cut for the struggling hospitality sector and a reduction to stamp duty to stimulate the housing market. Sunak also insisted he would “never accept unemployment as an inevitable outcome” of the pandemic and said the government had assembled a “plan for jobs” to protect and create employment. Details of how the package will be paid for – such as further borrowing or possible tax rises – are expected to be published as part of the chancellor’s autumn budget later this year.

How is the government helping businesses?
Under the chancellor’s plans to help businesses battling the impact of the pandemic, companies in the hospitality and leisure sector – one of the hardest hit by Covid-19 – will benefit from a cut in VAT from 20% to 5%. The reduction will be effective from next Wednesday and will run until next January. Sunak has described the tax cut as a "£4bn catalyst" which will benefit more than 150,000 businesses, including restaurants, cafes, pubs and cinemas. The reduction is set to be combined with a new “eat out to help out” scheme offering Brits 50% off meals out in restaurants and cafés. The government initiative will run from Monday to Wednesday throughout August and is aimed at encouraging consumers to spend money at participating outlets.

Elsewhere, those looking to get on the property ladder have been offered a helping hand in the form of a significant cut to stamp duty in England and Northern Ireland. The threshold for stamp duty – a tax which is applied on the purchase of property – currently stands at £125,000. Under immediate changes announced by Sunak on Wednesday, this threshold has been raised to £500,000 until the end of March 2021. According to the chancellor, the average stamp duty bill will fall by £4,500, and almost 90% of people buying a main home this year will pay no stamp duty at all. The temporary reduction is aimed at reinvigorating the housing market after the coronavirus crisis triggered property prices to register their first annual fall in eight years.
What about the furlough scheme?
Much of the chancellor’s statement on Wednesday was dedicated to the government’s efforts to preserve UK jobs. Amid fears the winding down of the furlough scheme next month could trigger mass redundancies at struggling firms, Sunak announced a new ‘jobs retention bonus’ allowing employers to claim a £1,000 grant for each furloughed staff member they retain. The chancellor said the bonus could cost the Treasury more than £9bn if all 9.4m furloughed workers return to their jobs. However, he stressed that leaving the furlough scheme open indefinitely was unfeasible and would give people “false hope that it will always be possible to return to the jobs they had before”.

In a further effort to support employment through the crisis, the government also unveiled a new “kickstart” job creation scheme. The programme is aimed at getting young people into employment through government-funded six-month job placements. An estimated 350,000 placements will be made available to 18- to 24-year-olds, with the government covering 100% of the national minimum wage for 25 hours a week, as well as permitting employers to top-up these wages without any loss of state funding. The chancellor said firms would be able to enter applications for the job subsides within a month, with the first placements beginning in the autumn.

How has the update been received?
The statement has received measured praise from the Confederation of British Industry. The lobby group welcomed the government's prioritisation of jobs but warned both long term and urgent economic challenges must be addressed. "With nearly 70% of firms running low on cash… more immediate direct support, from grants to further business rates relief, is still urgently needed,” the body said. The GMB Union also cautiously welcomed the update but warned it would be closely scrutinising the policies to ensure "new jobs are good jobs and training opportunities are real”. Meanwhile, campaigners have raised concerns that the level of investment in the UK’s “green recovery” falls significantly short of addressing the climate crisis. The chancellor has dedicated £3bn to decarbonising housing and public buildings – a figure Greenpeace UK claimed was “dwarfed by green recovery commitments in Germany and France”.

I have never encountered anything like this, the intensity of suffering experienced by so many families, and the fact that they have endured it for decades.

Baroness Julia Cumberlege condemns the NHS’s response to three separate healthcare scandals in a major report published on Wednesday. Cumberlege, who was commissioned to lead an independent review into the issues in 2018, has urged the government to offer an immediate apology to those affected by the scandals. The review examined the use of vaginal mesh, which caused some women debilitating pain, as well as hormonal pregnancy tests and anti-epilepsy medicine sodium valproate, which harmed unborn babies. In each case, Cumberlege said the concerns of those affected had been “dismissed, overlooked and ignored” by the health service.

The review found that much of the victims’ suffering was “entirely avoidable [and] caused and compounded by failings in the health system itself”. Cumberlege said the NHS had failed in its responsibility to do no harm to its patients and claimed its refusal to acknowledge the issues had left the lives of many people – “more often than not women” – shaped by “pain, anguish and guilt”. The report estimated thousands of women could have been spared complications if guidance on mesh had been followed. As many as 20,000 people in the UK are also thought to have been affected by the use of sodium valproate. The government said it would consider the report’s recommendations before setting out its response in full.

In other news


Boohoo has confirmed it will launch an independent review of its UK suppliers after it emerged some of the retailer’s garments were being made by workers paid less than the minimum wage. The fast fashion group said it had been “shocked and appalled” by recent allegations that its suppliers in Leicester illegally underpaid staff and failed to protect them from Covid-19. It has announced a £10m investment for “eradicating malpractice” in its supply chain, which will also face an independent review led by Alison Levitt QC. It comes after retailers including Asos and Amazon removed Boohoo’s products from sale over the alleged worker mistreatment.


The World Health Organization (WHO) has acknowledged emerging evidence suggesting airborne transmission of Covid-19 is possible. Benedetta Allegranzi, WHO technical lead for infection prevention and control, said on Tuesday: “The possibility of airborne transmission in public settings – especially in very specific conditions, crowded, closed, poorly ventilated settings – cannot be ruled out”. It comes the day after a group of scientists from 32 countries criticised the organisation for underplaying the risk of airborne transmission. Meanwhile, UK neurologists have published details of 40 cases where UK Covid-19 patients suffered serious brain conditions triggered by the virus. The neurologists have warned that medics may be missing signs of brain disorders as they emerge in patients who report only mild respiratory symptoms associated with the virus.


Author JK Rowling is among 152 public figures who have signed an open letter denouncing “cancel culture” and the “restriction of debate”. The signatories, who include writers Salman Rushdie and Margaret Atwood, claim “the free exchange of information and ideas” is “becoming more constricted” each day. The letter, which was published on the Harper's Magazine website on Tuesday, applauded recent protests for racial justice but alleged that writers, artists and journalists faced “public shaming and ostracism… if they depart from the consensus”. Several of the signatories have faced criticism over comments that have caused offence, including JK Rowling, who has recently faced opposition over her tweets about transgender people.


The Metropolitan police has apologised to British athlete Bianca Williams after she was stopped and handcuffed by officers alongside her partner and infant son. Williams and her partner Ricardo dos Santos were driving to their home in west London when they were stopped and forced from the vehicle. Footage of the incident was later shared on Twitter by the couple’s trainer and former Olympic champion Linford Christie, who accused the Met of institutionalised racism. The force has voluntarily referred the incident to the Independent Office for Police Conduct and Met commissioner Cressida Dick said a senior officer had apologised to Williams for the distress caused. The force is also reviewing its handcuffing practices.


Chechens living in Europe have expressed fresh fears over their safety after an outspoken critic of Chechnyan leader Ramzan Kadyrov was murdered in Vienna on Saturday. The 43-year-old victim’s death is the latest in a series of murders in Europe targeting critics of Kadyrov, who is backed by the Kremlin. Austrian police confirmed they had apprehended a suspect, also a Chechen man, but said a motive for the killing had not yet been established. Officers also confirmed the victim had declined police protection but did not specify why this had been offered. Speaking in the wake of the attack, one Chechen man who received asylum in Austria said others in the community were scared. “We all left to find safety and forget about home, and they find you and shoot you like a dog,” he added.

Picture Of The Day
A man walks by a collapsed road in Kuma, Japan (Source: The Guardian)
A man traverses a collapsed road next to the Kuma river in Kumamoto prefecture. Heavy rain which caused major flooding in southern Japan, killing 58 people, has now begun moving northeastwards. The severe weather is hammering large areas of the country’s main island, triggering mudslides and flooding, and prompting new evacuation advice for millions of residents.