York business leader says Chancellor could have gone further

Andrew Digwood, president of York & North Yorkshire Chamber of Commerce, welcomed measures announced on Wednesday, including the kickstart programme.

But he said the Chancellor could have gone further in the support offered.

Rishi Sunak said Britain was entering the second phase of the government’s economic response as he highlighted the launch of a jobs retention bonus to help wind down the scheme, with businesses paid £1,000 to retain furloughed staff.

Meanwhile, the “kickstart” job creation scheme for young people will see the government pay the wages of new young employees for six months; and apprenticeships will be supported by bonuses for companies, with firms to receive £2,000 for each apprentice they take on. Companies taking on apprentices over the age of 25 will receive £1,500.

Andrew Digwood, who is also a partner at York-based Rollits, said: "In our submission to the Chancellor we said that we needed to see support for young people, who will likely be the hardest hit from economic fallout from Covid-19, so plans for the kickstart programme to provide funded work experience are welcome.

"So too is the extra support for employers to take on apprentices. We cannot afford to lose a generation of young people to the crisis.

“However, we felt the Chancellor could have gone further by allowing apprentices to undertake much of the off the job training upfront to give employers more time to recover and ensure apprentices are better prepared to enter the workplace.

"We also still need to see greater flexibility in the apprenticeship levy so that employers can help their people get the skills they need to succeed in an evolving workplace."

For the hospitality and tourism sectors, which have been hit hard by Covid-19, Rishi Sunak said VAT would be cut from the current 20 per cent to five per cent for the next six months on food, accommodation and attractions. He also announced an “eat out to help out discount” to entice people to venture out to pubs, restaurants and cafes.

Picture: Welcome to Yorkshire

Meals eaten at participating businesses, from Mondays to Wednesdays in August, will be 50 per cent off up to a maximum discount of £10 per head for everyone, including children.

Businesses will be able to register on a website being launched on Monday. Firms can claim money back to have money in their bank accounts within five working days.

Andrew Digwood said: “It was good to hear recognition of the huge impact that the lockdown has had on the leisure and hospitality sectors, which have been unprecedented across our region.

"Measures to temporarily reduce VAT is a welcome step and will help to stimulate a more rapid pickup in activity in those sectors and supply chains hardest hit as the economy gradually reopens.

"Encouraging consumers back into restaurants with half price meal vouchers may bring some footfall back to our city centre and district high streets, however we feel the scale and scope of this scheme must be much bolder to make a material difference."

Highlighting what was missing in the statement, he said: “The Chamber’s recently published economic survey showed investment intentions have been hit hard during the pandemic, and so the Government should be preparing new incentives for business investment in the UK, including extending the £1 million Annual Investment Allowance for a further two years and broadening its scope to include training, the transition to net zero and spending on making workplaces Covid-secure.”

The chancellor also announced plans to cut stamp duty to boost the housing market, with the threshold rising from £125,000 to £500,000 until March 31, 2021.

Andrew said: "Without an agreed local plan in place it is unlikely that York will realise the full benefits and that we may have missed another opportunity to satisfy the housing needs of current and future generations."

James Mason, who is chief executive of tourism organisation Welcome to Yorkshire, said the VAT cut would be a huge welcome boost for thousands of organisations within Yorkshire’s tourism industry.

"It’s been a tough year for many businesses and hopefully this will be an incentive to encourage spending across the sector with people being able to take advantage of reduced prices on food, drink, accommodation and admission to the county’s amazing attractions."

He said the Eat Out to Help Out discount would encourage dining out at an otherwise traditionally quiet time of the week, 'allowing businesses to implement successful social distancing, yet spreading out welcoming customers over a number of days'.

"The tourism industry is worth £9bn to the Yorkshire economy and employs almost 225,000 people, and hopefully increased consumer spending will help secure the future jobs of many working within tourism businesses.

"We hope that the next few weeks and months will see visitors safely enjoying all the wonderful things Yorkshire has to offer, from its spectacular coastline, breathtaking countryside and vibrant cities, as well as world-class food and drink, spectacular heritage locations and outstanding attractions."