Business organisations have welcomed Chancellor Rishi Sunak’s package of measures in his summer “mini budget” – particularly the temporary VAT cut targeted at the food and hospitality industries which should help Cumbria’s tourism trade.

They also praised cash incentives to encourage firms to keep on furloughed workers and the Kickstart scheme to help them take on young workers at risk of long-term unemployment.

But some criticised the Chancellor for again omitting measures to support directors of small businesses who count on dividends for earnings and have yet to receive support, and tax experts pointed out that the cut in VAT on food might not be as simple to implement as first appears.

The Treasury said the latest measures in Wednesday’s summer economic update were worth £30 billion to help boost the UK economy after the coronavirus lockdown.

Two key points for Cumbria were VAT being cut from 20 per cent to five per cent for six months on food, accommodation and attractions lasting until January 12, 2021 and an “eat out to help out" discount to encourage consumers to spend at restaurants and cafes.

Meals eaten at any participating businesses, from Mondays to Wednesdays in August, will be 50 per cent off up to a maximum discount of £10 per head, with businesses claiming the money back from Government.

Cumbria’s Local Enterprise Partnership (CLEP) welcomed the “three-point plan for jobs” to protect, create and support employment.

Chief executive Jo Lappin said: “The unique structure of Cumbria’s economy has meant that Covid-19 has been particularly challenging for our economy and businesses.

"I’m therefore very pleased to see the package of measures that are being introduced to support our businesses to recover from the impact of Covid-19 and get their businesses fully up and running again.”

Mrs Lappin also chairs Cumbria’s Business and Economic Response and Recovery Group (BERGG), part of the county’s Local Resilience Forum structure responsible for developing the county's economic response to Covid-19.

She added: “In particular, I welcome the initiatives to support our visitor economy, which has faced a very difficult time. It is also great to see the support that is being provided for young people, such as the Kickstart job creation scheme. They really are our future and we need to make sure that Cumbria continues to provide a viable career path for them.

“We can all play our part by taking advantage of the measures to support restaurants, takeaways, pubs and accommodation providers.

“Despite the difficulties of the last few months, Cumbria will recover because we have excellent businesses, organisations and people that will make sure that we do.”

Rob Johnston of Cumbria Chamber of Commerce expressed mixed feelings. He stated it is “clear that the thrust is about protecting jobs in the short term rather than building a long-term recovery” with “worry that many of his measures are temporary” only applying until early next year while the effects of the pandemic being with us well beyond.

Many will be worried that the Chancellor confirmed that the furlough scheme will be not be extended beyond October while he confirmed the economy has collapsed by 25 per cent this year and wiped out all of the growth from the past 18 years. He notably said he will “make no apology” for winding down the government’s furlough scheme for subsidising worker wages but that the Treasury remains committed to protecting jobs – including through the jobs bonus scheme he also announced.

Cumbria Tourism had been lobbying for a package of winter support for the sector and called the budget “a step in the right direction” with hope it will bring much needed support to many businesses, as well as incentivising visitors to the county, in the next few months.

The group had been pushing for an extension to the furlough scheme.

While the Chancellor introduced a new policy to incentivise employers to bring staff back to work with the new jobs retention scheme via £1,000 for every employee who returns until January next year, the group fears it will not go far enough to protect many thousands of the jobs at risk.

Dan VisserVice chair of Cumbria Tourism, said: “Our businesses have been working very hard behind the scenes to be able to re-open in a Covid-secure manner, with many of them qualifying to display the ‘We’re Good to Go’ quality stamp by VisitEngland, which means they have met the criteria to responsibly welcome visitors back.

“The announcements offer a series of positive initiatives and I am hopeful that the VAT and voucher announcements will result in increased demand for food, accommodation and attraction providers, which should be a real boost for our sector. We hope to see these moves stimulate demand and build on the good work that has been done by businesses already.”

The group hopes the £2bn “kickstart scheme” to create more jobs for young people will help to bolster the local workforce but managing director Gill Haigh added “it doesn’t remove business concerns about when the furlough scheme ends.”