Government Urged To Give All UK Adults £500 To Spend On High Street
Independent think-tank Resolution Foundation is urging Chancellor Rishi Sunak to consider giving each British household vouchers to spend at high street shops, with vouchers worth £500 per adult and £250 per child.
The purpose of this scheme would be to kickstart economic recovery in UK in the wake of the ongoing pandemic, focusing support on sectors which have suffered greatly due to the economic impact of coronavirus. For example, those in the retail and hospitality industries.
This proposal is part of the wider fiscal stimulus package proposed by the Resolution Foundation, which produces research with a focus on improving living standards for those on low-to-middle incomes.
Researchers at the Foundation believes a £30 billion ‘High Street Voucher’ scheme could effectively deliver targeted support to firms which need the most help right now.
This voucher scheme proposal has been described as ‘tailor-made’ for the current unprecedented crisis, focusing attention on specific sectors, rather than companies across the wider economy.
Research Director at the Resolution Foundation, James Smith, said:
While every part of the economy has been affected by the current crisis, the stand out feature of this recession is that some areas are far more affected than others.
Social distancing has huge implications for firms in sectors like retail, hospitality, tourism and leisure that will last into the forthcoming reopening phase.
That is why the jobs of so many workers in these sectors are in the firing line. The Chancellor’s recovery package on Wednesday should reflect this unique economic challenge.
As well as setting out the biggest ever peacetime job support programme, the Chancellor should get Britain spending in places where it’s needed most.
A universal ‘High Street Voucher’ scheme – worth £500 per adult and £250 per child – to be spent only in these sectors would kickstart demand in the right parts of our economy, boost living standards and deliver targeted support to the businesses that need help the most.
The Chancellor has already shown that big, bold measures like the Job Retention Scheme are welcome and necessary in the current economic climate. He should take this same approach as we enter the crucial recovery phase of the crisis.
This would be a universal scheme, delivered through vouchers or smartcards that could be activated over a fixed time period. For example, the Foundation has recommended a time period of 12 months.
The Foundation has explained that the scheme could be easily deactivated should the targeted sectors be required to close once again following a potential second wave of the coronavirus.
As per the Foundation, hospitality activity was down by over 90% in April, whilst industries reliant on face-to-face contact are continuing to be impacted substantially due to social distancing measures.
In countries such as Germany or France, which have already seen the easing of lockdown restrictions, leisure and retail trips remain more 10% compared with pre-pandemic levels.
The proposal has been outlined ahead of Chancellor’s financial statement on Wednesday, July 8, where he will outline policies aimed at addressing the UK’s recovery from the outbreak.
As reported by the Financial Times, the economic impact of coronavirus has led to the UK’s debt-to-GDP ratio breaking the 10& mark for the first time since 1963, with the economy shrinking a record 20% back in April.
Sunak has pledged that the upcoming announcement will be a ‘fiscal plan’ as opposed to an ‘emergency budget’, and will see him laying out a roadmap for economic recovery.
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