Stage set for Sunak’s £3bn giveaway
Bank of England Governor to address Tory MPS amid speculation over economic rescue plan
HOMEOWNERS will be given vouchers to pay for insulation and double glazing as part of a multibillion-pound job creation drive in the wake of the Covid-19 recession, Rishi Sunak will announce tomorrow.
The Chancellor will use his summer economic update to unveil a £3billion scheme that he says will create thousands of jobs and support “tens of thousands” more by stimulating demand for eco-friendly home improvements.
It came as the Governor of the Bank of England postponed a private meeting with Tory MPS after facing questions about whether he was acting in concert with the Chancellor. Andrew Bailey had been due to make an almost unprecedented address to the 1922 Committee of Conservative backbenchers hours after the Chancellor’s statement, but late last night the Bank changed the date following questions about the timing of the move.
Meanwhile, Mr Sunak was warned that announcing plans tomorrow for a “stamp duty holiday” in the Autumn Budget could “stagnate the market” until then. One industry source said pre-announcing such a move months before it took effect would be “insane”, leading to speculation last night that Mr Sunak could bring forward any such announcement to tomorrow.
Mr Sunak is expected to announce tomorrow that private homeowners will receive vouchers for home improvements including loft, floor and wall insulation, installing heat pumps and double glazing. The Chancellor hopes that by ploughing money into the home insulation and energy industry, firms will take on thousands of workers who have lost their jobs because of the coronavirus crisis.
Investment is also earmarked for retraining people who have lost their jobs during the crisis to help them transition to new green jobs.
The package will include £1 billion of funding to make public buildings and social housing more energy-efficient.
Whether your home is eligible would be determined by its energy efficiency rating, a source told The Daily Telegraph.
The Conservative Party’s manifesto pledged to deliver two million new high quality jobs in clean growth over 10 years, including by investing in carbon capture technology and offshore wind, as well as £2.5billion over five years for home upgrade grants.
In addition to the £3billion package, the Chancellor will announce 5,000 new jobs through a £40million Green Jobs Challenge Fund, which will support environmental charities and local authorities to improve England’s landscapes, from planting trees to cleaning up rivers. The Bank of England and the Treasury had insisted that Mr Bailey’s decision to address Tory MPS on the same day as the announcement was a “coincidence” and had not been requested by the Chancellor.
Some Tory backbenchers suggested the Treasury and the Bank were “working closely together” and that the Bank wanted to be “helpful” to the Chancellor, raising questions about the independence of the Governor. After reports of the meeting appeared on The
Telegraph’s website last night, the Bank
The Chancellor will use his summer economic update to unveil a £3 billion scheme to create thousands of jobs
issued a statement announcing that the meeting would happen later “due to the Chancellor’s economic update”.
A spokesman for the Bank said Mr Bailey had wanted to make the appearance before the Tory MPS as part of his “regular engagement with political representatives” and would “explain the Bank’s current analysis on the economic impact of Covid-19 and listen to their views”.
He will also meet Labour MPS later this month.
Seven “Red Wall” Tory MPS called on Mr Sunak to usher in a “New Deal for the North” by making £1,000 retraining grants available to Northern workers.
In a letter to the Chancellor seen by The Telegraph, the MPS write: “As a fellow Northern MP, you know well the issues we face: poor R&D intensity, lacklustre connectivity, below average productivity and fewer high-knowledge high-value added jobs.” The group, which makes up the parliamentary council of the Northern Policy Foundation, the centre-right think tank, is calling for a “Northern skills bank” to deliver £1,000 grants to individuals who become unemployed, long-term furloughed or are looking to upskill.
They also suggest “bounce back opportunity zones”, in which tax credits would be available for businesses in technology, clean energy and aerospace sectors.
Mr Sunak is understood to be contemplating changes to stamp duty to help get the housing market moving again, by temporarily scrapping the tax on homes costing up to £500,000. The current threshold is £125,000.
Government sources suggested the move was under discussion for the Budget, but Anneliese Dodds, the shadow chancellor, said any pre-announcement of it would “shut down the housing market in one fell swoop. Even the possibility of a stamp duty change later this year could make buyers think twice this summer”.