With great anticipation building from yesterday’s news about the Green Homes Grant, we awaited the Chancellor’s statement on the economy and job creation. Short on detail, for now, but with a couple of surprises for our industry to make the most of.
Green Homes Grant
Lets start with the one the policy that we believed would matter the most to fenestration. Rishi Sunak confirmed that a £2bn would be launched to help fund energy-efficient home improvements. We knew this was coming, and the industry got excited at the prospect of fenestration being included for the first time. Then we became concerned that with an implementation date of September, homeowners would begin to cancel as they looked to take advantage of the large discounts being offered.
The Chancellor announced that the Government would pay up to two-thirds of the cost of energy-efficient home improvements up to £5000. Poorer households would be able to access up to £10,000 worth of grant money. So, should a homeowner decide to renovate their home and the works are included on the Government’s list of energy-efficient measures, costing, for example, £6000, the Government would fund two-thirds or £4000 of the work. The homeowner would pay the remaining £2000. This is a significant investment by the Government.
There was hope that new windows and doors would be included on the list of energy-efficient measures that would be included. Indeed, that appeared to be the case up to the statement. However, as evening approached today it became clear that fenestration was likely to miss out. It appears that there are going to be levels of applicable home improvement measures. The top tier will include insulation, loft and cavity, along with other non-fenestration measures. It means that by the time the money has been spent to cover the costs of those, there will be little grant money left to cover any cost of new windows as they will be on lower priority lists. If this turns out to be the case this will be a huge disappointment. It has been proved in a number of studies that new energy-efficient windows can make a major difference to the overall efficiency of a home. It may well be that we all got excited about nothing.
My other concern is the communication being given by the Government about this. Homeowners are already calling up installers asking to pause, delay or cancel orders in the hope that they will be able to qualify for this discount in September. After all the hard work our industry has done to restore its order books, the last thing we need now is for it to be dismantled by uncertainty around whether or not grant money can be used for new windows or not. As it stands tonight, it looks like we’ll miss the boat. If that’s the case, I would urge the Government to come out with clear communication as soon as possible about what products will be most eligible and how homeowners can apply. That way, if windows aren’t going to be high on the priority list for this scheme then at least we can explain that to homeowners and prevent large numbers of cancellations where there doesn’t need to be.
Job retention bonus
This was a rabbit out of the hat. The Chancellor confirmed that furlough will end on Halloween. Make your own puns up there. But he also announced that for firms who continue to employ staff after the end of furlough for three months they will get a £1000 bonus. It’s a financial incentive to encourage businesses to keep on as many staff as they can. Its also an expensive bonus. There are still 9.3m people on furlough. The bonus is per person, so could cost £9.3bn. In reality, a large number of those jobs will still be lost so the Government knows it won’t be spending £9bn on this. But, it’s still a very hefty package and the Government is stumping up the cash in a demonstration of commitment.
The Chancellor did warn however that even with the schemes announced today, we still faced hardship and that not every job will be saved. He did though say that unemployment is not inevitable due to the pandemic. So as people lose their current positions, the Government is aiming to create new ones so people can quickly find new employment.
Trainees and apprenticeships
The Chancellor introduced the new Kickstarter scheme. Aimed at 16-24-year-olds on Universal Credit who are at risk of long term unemployment. The Government will give businesses £1000 per placement they offer to young people for a period of 6 months. There will be 30,000 new traineeship places.
There was also an announcement about apprenticeships. The Government is set to pay £2000 per placement to companies who take on new apprentices aged 16-24. The figure drops to £1500 if they are over 25. On top of this, the Government will also pay up to 25 hours of work per week.
Both these schemes represent significant investments by the Government who are trying to encourage industry to look after the generation that will be hit hard by job losses due to the pandemic. As I have written in previous posts on here and spoken about on our regular Periscope videos, our industry has never had such a chance to bring on board a new generation of youth and talent. Now is the time to get that happening, and with the bonus of being paid to do so!
Stamp duty cut
As was expected, the Chancellor cut stamp duty for properties worth up to £500,000. This was a 6 month holiday period. The housing market expressed concern at the first sign of this deal as it was originally planned to be implemented in the Autumn. That would have caused a freeze in activity in the housing market which would have been devastating as buyers would have slammed on the brakes until the cut took effect.
This cut is effective immediately.
VAT cut for hospitality
Also expected was a VAT cut for the hospitality sector. I think the size of the cut would have surprised many as it was dropped 15% to just 5%. The Chancellor hopes that the price reductions are passed down to customers to help generate demand for eating out, going to the pub or going to watch a film.
To add to the support for hospitality, the Chancellor also announced a new voucher for eateries that were participating that would give customers a 50% discount on their food up to the value of £10. This applies for the month of August, Monday to Wednesday. I’m not convinced of how effective this will be on a wide scale. Monday to Wednesday isn’t exactly peak eating out, which is perhaps why the Chancellor picked these days as these are the days where restaurants need the most help. The sceptic in me thinks this was done intentionally, knowing that it would cost less than if it was valid on a weekend.
You can find a full list of measures announced by the Chancellor here.
There were hints that more measures were to come in the Autumn Spending Review later on in the year. Overall, there are some useful things in here for fenestration, namely the trainee and apprenticeship schemes. We’re all supposedly busy, needing more staff. Well, no better than now to get paid to take on trainees and apprentices to help cultivate the next generation of workers our industry needs.
The one disappointing area seems like the Green Homes Grant. Fenestration looks set to miss out on the benefits of this from the information that is out there. More detail is set to be announced in the coming days and weeks. Hopefully, the Government hears us and includes new windows and doors in that primary list of energy-efficient measures eligible for the grants.
In the round, this I think is a good set of measures. I think there is more to do and I don’t think it will ultimately stave off the large job losses as furlough begins to be wound down. However, what it does do is provide new opportunities for those who find themselves out of work, which needs to be recognised. I hope that come the Autumn Statement more ideas are brought to the table to help create new opportunities for people. One area that was lacking was a focus on sustainability today, so hopefully, that is front and centre with the next round of stimulus.
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