Rishi Sunak urged to give free vouchers in ‘Shop Out to Help Out’ scheme

Rishi Sunak has been asked to hand out free shopping vouchers as part of next week’s budget to help kick-start the economy after lockdown.

A £100billion stimulus is needed to ‘increase the chances of a strong recovery from the pandemic-induced slump’, according The Resolution Foundation.

The influential think-tank has called on the Chancellor to commit £27billion towards a retraining and job support package to reduce unemployment.

It also called for a further £9billion for a shopping voucher scheme to give Britain’s high streets a boost, with non-essential retail currently expected to open on April 12.

The foundation also recommended making permanent a £20 weekly increase to Universal Credit, an £18billion green investment programme, and £30billion extending existing emergency support for workers and firms.

It said its proposals amounted to a stimulus plan equivalent to around 5% of British economic output.

Sunak, who is due to announce his budget on Wednesday, has already racked up more than £280billion trying to get Britain through the pandemic, pushing the country’s borrowing to its highest since World War Two.

But with hope on the horizon after a year of economic uncertainty and job losses, the Resolution Foundation says now is not the time to cut back on spending.

The think-tank’s research director James Smith 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 $1.9trillion 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 £100billion 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.’

While smaller than the Biden plan, which is equivalent to 9% of US output, the Resolution Foundation said this reflected the fact that Sunak has already provided significant support.

At a later date, tax rises will be needed to pay for the extra support, the think tank said.

It added: ‘At that point around £30billion of consolidation will be needed to balance the current budget – and build fiscal policy space for future recessions.’

According to the Daily Mail, Treasury officials are looking at a number of options to get people spending their money again including high street vouchers and lower alcohol duty for restaurants and pubs.

The latter would be coupled with higher levies on booze sold by supermarkets to help local traders.

It is also possible that the Eat Out to Help Out scheme, introduced last summer to get people back into restaurants, could make a comeback.

The initiative, which saw people get state-backed 50% discounts off food and soft drinks up to £10 on Mondays, Tuesdays and Wednesdays saw more than 100million meals claimed in August.

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