Monday, 6 July 2020

The UK Considers £500 Vouchers for all to kick start economy

Radical plans to give all adults £500 and children £250 in vouchers to spend in sectors of the economy worst hit by the Covid-19 crisis are being considered by the Treasury.

The proposals, drawn up by the Resolution Foundation thinktank, which has had recent talks with the Treasury about its ideas, are aimed at kickstarting economic recovery by triggering a highly targeted surge in spending. Under the plans the vouchers could only be spent in certain sectors, such as hospitality and “face to face” retail, as opposed to online.

The proposals are similar to successful schemes already used in China, Taiwan and Malta. In April, the Chinese city of Wuhan, where the Covid-19 outbreak is believed to have started, issued 500 million yuan (£57m) in consumption vouchers for use in restaurants, shopping malls, convenience stores, and cultural, sports and tourist venues.

Last night, ahead of a “summer update” on the state of the stricken economy by the chancellor Rishi Sunak on Wednesday, the Treasury refused to rule out introducing a similar scheme in the short or medium term.

The Resolution Foundation says its idea would be a more effective way to jump start a recovery than a temporary VAT cut, or one-off cash gifts from the state to individuals, which have also been considered in Whitehall.

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