Chancellor Rishi Sunak has been urged to give every adult GBP150 in their back pocket to spend at shops when lockdown ends. Shops have been devastated by the coronavirus pandemic - and the Chancellor is under pressure to address it in his forthcoming Budget. Leading think tank the Resolution Foundation has called for him to dish out GBP150 vouchers that can only be spent on the High Street.
This would get money flowing back into the country's ailing retail sector and also encourage footfall. BirminghamLive has reported how dozens of stores in the region face not opening again as a result of the impact of the pandemic. The likes of major chains like Debenhams - which has pride of place in the Bullring - have already folded.
The plan would also see every child given GBP75 under and would cost the taxpayer around GBP9 billion - although see money coming back when the economy is boosted. The think tank says the voucher scheme should be part of a GBP70bn programme later in the year including GBP27bn for retraining and job support and GBP18bn in green investment. However, the Chancellor will be under massive pressure ahead of next week's Budget to start to balance the books amid rapid growth in borrowing on the back of the Covid crisis.
Officials believe it would make no sense to announce such a scheme months in advance because it would change people's spending behaviour, The Mirror reports. And it would be difficult to set up sensibly because while some shops are on their knees due to Covid-19, others have done well from the pandemic. Despite this, the Daily Mail said Treasury officials are looking at a dramatic recovery package later in the year - which could include vouchers as well as lower alcohol duty for pubs and restaurants battered by lockdown.
The Chancellor is thought to be planning a Budget with four themes, "support, recovery, vision and honesty", which looks set to introduce some tax rises to start paying for the pandemic.
Support schemes such as furlough and the GBP20-a-week Universal Credit uplift also look set to be extended temporarily. The think tank's report, 'How to throw good money after good', suggests ways to top up the GBP280bn already committed to Covid to help the British economy recover. It argues: "These vouchers could be spent in physical non-food retail, where there is more likelihood that consumption is likely to re-bound more slowly than in other services such as pubs and restaurants.
"This is likely to be the case, with more survey respondents reporting plans to increase their spending on restaurants and pubs after the pandemic than decrease spending. "But roughly equal proportions of respondents suggesting they would increase or decrease their spending on clothes and other retail. "This temporary voucher scheme would slow but not halt the longer-term trend towards online retail."
James Smith, Research Director at the Resolution Foundation, said: "The Chancellor is approaching his second Budget at a pivotal moment for the economy, with the country likely to emerge out of the biggest economic downturn in over three centuries in the coming months. "But while in the US debate has focused on President Biden's GBP1.9 trillion stimulus plan, the UK debate has got stuck on how to withdraw support. "Instead, the Chancellor should combine extending existing support with fresh stimulus once restrictions are lifted to deliver a GBP100 billion plan to boost Britain's recovery.
"That is the scale of ambition needed to increase the chances that Britain sees a strong recovery from its pandemic-induced slump, and to ensure the recovery reaches firms and families across the UK."
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