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6 July 2020, 07:19 | Updated: 6 July 2020, 07:28
Chancellor Rishi Sunak is reportedly considering handing out vouchers to UK families.
The government has been urged to consider offering every adult in the United Kingdom a voucher worth £500 in order to boost the economy.
As lockdown restrictions are slowly loosened across the country, a think tank wants Chancellor Rishi Sunak to consider the handouts to help get the retail and hospitality sector back on its feet.
According to The Guardian, The Resolution Foundation has said the shopping vouchers, worth £500 per adult and £250 per child, would boost demand.
They could be allocated via vouchers or smartcards, and transactions could be made with the use of mobile phones, with a one-year time limit for spending.
The vouchers would be valid in areas such as face-to-face retail, hospitality and tourism, over a year, with experts claiming it would be more effective than a temporary VAT cut, or one-off cash gifts.
It's all part of a proposed £30 billion plan to boost the economy and stop businesses from having to close their doors.
China, Taiwan and Malta already have similar schemes in place.
In April, the Chinese city of Wuhan, where the coronavirus outbreak is believed to have started, gave out 500 million yuan (£57m) in vouchers for restaurants, shopping malls, convenience stores, and sports and tourist venues.
James Smith, Research Director at the Resolution Foundation, told The Guardian: “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.”
Other proposals from the Resolution Foundation include extending the current furlough system in the hardest hit sectors of the economy.
Suggesting it be changed to the ‘Job Protection Scheme’ after October, they have suggested the government continues providing a ten per cent wage subsidy.
Chancellor Rishi Sunak will be giving an update on plans for the economy on Wednesday, with the Treasury reportedly refusing to rule out similar schemes.