UK's €33bn stimulus includes Vat cut to 5% for restaurants and new 'eat-out' voucher

Chancellor of the Exchequer Rishi Sunak delivers a summer economic update in a statement to the House of Commons, London.

UK chancellor Rishi Sunak unveiled an additional £30bn (€33.3bn) stimulus to the British economy to fend off a potential jobs crisis that includes a bonus for employers for every job they keep, a cut in Vat for restaurants, and a €10 voucher to encourage people to eat out this summer. 

The range of measures will be closely watched here as Finance Minister Paschal Donohoe prepares a stimulus package to stem a spike in unemployment.

The bonus for employers involves a £1,000 for retaining staff when the UK's main Covid-19 support ends -- at an estimated cost of up to £9.4bn. 

To help hospitality and tourism, Mr Sunak announced a cut in Vat for the sector to 5% from 20% for six months.

People eating out in August between Monday and Wednesday will receive a 50% discount of up to £10 each to be spent on food and non-alcoholic drink, paid for by the government at an estimated cost of £500m. 

Mr Sunik pitched the package as helping young people to escape potentially long-term unemployment through apprenticeships.

A further £3bn will be spent on improving eneregy efficiency of homes and public buildings and includes around £5.6bn in accelerated infrastructure spending announced last week. 

In a bid to breathe life into the housing market and the broader economy, Mr Sunak raised the lower threshold for a tax on property purchases to £500,000, four times its current level, with immediate effect until March 31.

“Overall this wasn’t a massive fiscal package, with other countries like Germany announcing much larger fiscal packages,” Jing Teow, an economist at PwC, said. Capital Economics in London said the measures bring the total cost of the UK's Covid supports to  £163bn, or 7.4% of GDP.  Additional reporting Reuters