Thousands of “green jobs” in design, construction, and engineering will be created under a £3billion plan to help kick-start the economy in the wake of the pandemic.
The package, unveiled in Chancellor Rishi Sunak’s mini-Budget on Wednesday, will include a £1bn programme to “green up” public buildings such as schools, hospitals and social housing.
There will also be a £50million pilot to retrofit social housing with heat pumps, double glazing and insulation.
If rolled out nationwide, this scheme could save families more than £400 a year in bills, create more than 500,000 jobs and cut annual household emissions by over 20% by 2023/24, said the New Economics Foundation.
The think tank’s Hanna Wheatley said extending the scheme in this way would “not only contribute to crisis recovery but would contribute to how the UK tackles climate change, poverty and the Government’s levelling up agenda, creating a housing stock and economy fit for the century to come”.
Homes are currently responsible for around a fifth of the UK’s total carbon dioxide emissions.
The Government has already committed to a net zero emissions target by 2050 – though critics say this is not soon enough.
The Chancellor will announce the Government’s plans to avoid mass unemployment as the furlough scheme comes to an end, as well as broader measures to steer the economy through the fall-out of the pandemic.
Businesses offering unpaid traineeships for young people in England will receive a £1,000 bonus per trainee under a £111million scheme.
There were also reports that Mr Sunak will exempt the majority of home-buyers from paying stamp duty.
He was considering raising the threshold at which stamp duty is payable from £125,000 to as high as £500,000.
But there was speculation he could put off making the change until autumn.
This could slow the housing market to a halt in the next three months as buyers wait for the move to kick in.
The Resolution Foundation, which has held talks with Treasury officials, published a £200bn package of ideas to boost the economy.
They include a £30bn shopping voucher giveaway – £500 for every adult and £250 per child – to support the high street.
Other suggestions include £17bn a year of job support, including extending the Job Retention Scheme for hard-hit sectors.
It also proposes capping firms’ repayments on crisis loans at 5% of turnover, and a £10bn Universal Credit boost for low-income families.
The report predicts the UK economy could shrink by 9.3% this year, the biggest annual hit in a century – but smaller than the 14% hit forecast by the Bank of England.
However, it warns next year’s recovery is likely to be far slower, at 6%, when the Bank of England forecast a 15% bounceback.
James Smith, of the Resolution Foundation, said: “With interest rates at record lows, the Chancellor will need to take the lead in delivering an ambitious response to secure economic recovery.
“The measures the Chancellor announces in his mini-Budget need to be big enough to reflect the size of the crisis we face, targeted at the sectors that need most support, and flexible enough to cope with the uncertainties that lie ahead.”
Greater Manchester Mayor Andy Burnham urged the Chancellor to address deep regional inequalities by considering a Real Living Wage.
He said: “It’s towns in the Midlands and the North that are being singled out today as potentially hardest hit, they’ve also been hardest hit by the virus.
“There’s too many people in those places in low-paid, insecure work, who couldn’t take time off work if they had symptoms because they knew they wouldn’t be paid.
“I would urge the Chancellor and the Prime Minister to address this issue of health resilience and economic resilience in some of our poorest places.”
It followed a grim tally of job losses in a series of firms last week when 16,000 redundancies were announced in just three days.