Government's £500 voucher scheme facts: Who will get one and how it will work
7 July 2020, 12:28 | Updated: 9 July 2020, 09:36
Rishi Sunak has been encouraging us all to help save the British high street.
However it seems the Chancellor of the Exchequer might soon go one step further, giving each UK adult a £500 voucher to spend on shopping in a bid to restart the UK economy.
Since the downturn in spending due to the coronavirus pandemic, the government has been looking for ways to inject money back into the country and are said to be seriously considering the voucher initiative.
According to The Guardian The Resolution Foundation - the think tank that suggested the idea to the Treasury - the vouchers could put £30 billion into the economy and save thousands of jobs.
Following in the footsteps of China, Taiwan and Malta who have successfully introduced similar systems, we bring you everything you need to know about Rishi Sunak's proposed scheme and what it would mean for you:
What is the government's £500 voucher scheme?
It is said that the vouchers would be used in parts of the economy hit hardest by the pandemic, including arts and entertainment and would be made specifically to be spent in high street shops, rather than online.
The proposal has been made by The Resolution Foundation, an independent think-tank focused on improving living standards for those on low to middle incomes, ahead of the government's budget report on Wednesday.
The Resolution Foundation 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 think tank said the money would be sent in the form of vouchers, rather than cash, to encourage people to spend and not save.
"The Foundation notes that cash transfers risk being simply being saved by higher income households, who are already boosting their balance sheets through 'enforced savings.'"
Who would be eligible for a £500 voucher?
Under the proposed scheme, each UK adult would be eligible for £500 and each child £250.
The vouchers would be delivered as coupons, gift cards or smart cards and would need to be spent over 12 months.
Similar schemes have been introduced to families in Taiwan, Malta and China.
In Malta, residents over the age of 16 have been mailed €100 in five vouchers of €20 each.
However, the Maltese vouchers are valid for six months and 80% of the money must be spent in the hospitality sector.
How would the government's £500 voucher scheme work?
Each household would be given a time limit - likely 12 months - to spend the vouchers.
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Transactions could be made by mobile phone and would reportedly be more beneficial to the economy than one-off cash gifts to each household, which have previously been considered by Whitehall as a way to kick-start the economy.
However, it has been suggested that in the event of a second surge of coronavirus, that the vouchers are deactivated until the lockdown is once again lifted.
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.
"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."