Here's how the proposed £500 voucher scheme to save the UK high street could work
As part of efforts to restart the economy, the UK government is reportedly considering launching a new voucher scheme to help bring money to the high street.
The scheme, which has been proposed by the Resolution Foundation, would allow people to be given ‘free’ vouchers up to the value of £500 to help inject money into industries - such as retail - that need the most help to recover post-lockdown.
Who is eligible for the vouchers?
Under the proposals, all adults would receive a £500 voucher and children a one-off £250 voucher to help pump money back into the high street.
The vouchers would be valid in sectors, such as retail, arts and hospitality, that have been the hardest hit by the coronavirus lockdown.
How would the voucher scheme work?
It has been suggested that the vouchers would be a one-off, non-refundable payment, as opposed to several monthly payments, and would be delivered as coupons or smartcards, that will be valid for 12 months.
Vouchers would be issued as opposed to cash in a bid to encourage people to “spend not save”.
It is intended that the vouchers would be spent on the high street, rather than used to buy goods online, and in the event of a second lockdown, they would be deactivated electronically, and later reactivated when businesses reopen.
The idea was suggested by the Resolution Foundation ahead of Mr Sunak’s mini-budget announcement on Wednesday (8 July), and said the £30billion scheme could save hundreds of thousands of jobs amid a looming recession.
The report said: “The voucher scheme can target the parts of the economy where the problems are – bricks and mortar consumption in shops and restaurants, rather than online sales – and recognises the different impact of the crisis on poor and rich families.
"The Foundation notes that cash transfers risk simply being saved by higher income households, who are already boosting their balance sheets through ’enforced savings’.”
Has such a scheme been implemented before?
Similar schemes have already been introduced in other parts of the world, including China, Taiwan and Malta, as part of efforts to help build the economy.
In Taiwan, people are able to spend the vouchers on goods and services at retail shops, restaurants, markets, cultural venues, hotels and on rail transport.
However, they cannot be used online or to purchase certain goods, including cigarettes, stocks or coupons.
James Smith, at the Resolution Foundation, told the Liverpool Echo: "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."
In his budget statement on Wednesday (8 July), Mr Sunak announced a number of new initiatives to help benefit the UK economy, including slashing stamp duty on transactions below £500,000, a £2 billion "green homes grant" which grants homeowners and landlords vouchers to make their properties more energy efficient, and a new 'Eat Out to Help Out' discount to get customers back into restaurants, cafes and pubs.
Under the dining out scheme, meals eaten at any participating business from Monday to Wednesday during August will be 50 per cent cheaper, up to a maximum discount of £10 per head for everyone. Businesses can then claim the money back with the funds in their bank account within five working days.