Finance Minister Rishi Sunak announced the budget to tackle unemployment as a result of the coronavirus pandemic.

Britain's Chancellor of the Exchequer Rishi Sunak speaks during a ministerial statement on the summer economic update, at the House of Commons in London, Britain, July 8, 2020.
Britain's Chancellor of the Exchequer Rishi Sunak speaks during a ministerial statement on the summer economic update, at the House of Commons in London, Britain, July 8, 2020. (Reuters)

The UK government has unveiled a package worth $37 billion (£30 billion, 33 billion euros) to save jobs and help the young into work to kickstart the coronavirus-hit economy.

Delivering a mini-budget to parliament, Finance Minister Rishi Sunak's measures included bonuses to companies retaining staff and taking on apprentices, investment in 'green' jobs and allowing the whole country to enjoy discounted meals in restaurants.  

"People need to know that although hardship lies ahead, no-one will be left without hope," said Chancellor of the Exchequer Sunak.

Noting that "people are anxious about losing their jobs, about unemployment rising," Sunak told the country on Wednesday: 

"We're not just going to accept this."

Cutting VAT

Other measures included a temporary cut to the level of value added tax on food, accommodation and attractions – and lifting the threshold at which stamp duty tax is due on home purchases to help the construction sector.

Britain has suffered Europe's deadliest outbreak of Covid-19 and a nationwide shutdown led to the worst economic contraction among the G7 leading industrialised states.

Sunak said the UK economy had contracted by 25 percent over the coronavirus lockdown – "the same amount it grew in the previous 18 years."

Green investment

The chancellor also confirmed $3.8 billion (£3-billion) of green investment, after British Prime Minister Boris Johnson vowed to "build, build, build" out of the economic crisis.

The investment package includes $2.5 billion (£2 billion) in grants for households to insulate homes and make them more energy efficient, and another $1.3 billion (£1 billion) for public sector buildings, including hospitals.

The plan is part also of Britain's long-term pledge to reduce carbon emissions to net zero by 2050 to tackle climate change.

Virus-hit economy

Britain imposed a nationwide lockdown on March 23 to halt the spread of Covid-19 but has gradually begun easing restrictions in the hope of boosting ailing businesses.

Recent official data showed the UK's biggest quarterly contraction for more than 40 years – at minus 2.2 percent – in the January-March period.

However, the data included only the first full week of the lockdown and economists expect subsequent damage to be considerably worse for the second quarter.

Another contraction would place Britain in a technical recession.

Since the crisis began, the Bank of England has pumped cash stimulus worth $378.2 (£300 billion) into Britain's virus-hit economy and slashed its main interest rate to a record-low 0.1 percent – moves aimed at propping up businesses and saving jobs.

Experts estimate the total cost of state emergency measures meanwhile could run as high as $378.2 billion (£300 billion).

READ MORE: British economy on track for biggest contraction 'in living memory'