Coronavirus: Sunak may hand out £500 vouchers to boost spending

Chancellor of the Exchequer Rishi Sunak walks through from the foreign office to Downing Street after the introduction of measures to bring the country out of lockdown. (Photo by Aaron Chown/PA Images via Getty Images)

UK chancellor Rishi Sunak is considering giving vouchers worth £500 to adults and £250 to children to boost spending in those parts of the economy that have been particularly badly hit by the coronavirus pandemic.

This is based on a proposal by a think tank called Resolution Foundation, which has reportedly been in talks with the Treasury.

The Covid crisis made Rishi Sunak a star, but it could yet undo him

"The proposal, which forms part of wider fiscal stimulus package put forward by the Foundation, would involve the delivery of up to £30bn worth of consumption vouchers for households to spend in the areas of the economy being hardest hit, such as face-to-face retail and hospitality," the think tank said in a statement.

It explained that the "High Street Voucher" scheme would delivered via vouchers or smartcards and activated over a fixed time period. They can be deactivated if the sectors benefitting from the scheme need to be closed down in the event of a second wave of the infection.

It said its suggestion is better than repeating policies from the financial crisis, such as VAT cuts, because the issues were very different back then.

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People stand outside a closed shop in Leicester city centre, England, Tuesday June 30, 2020. The British government has reimposed lockdown restrictions in the English city of Leicester after a spike in coronavirus infections, including the closure of shops that don't sell essential goods and schools. (AP Photo/Rui Vieira)
The restaurants down by the South Bank close to the London Eye are still closed making a dismal sight on a rainy day. London is primed and ready to re-open, to some extent as shops get ready to open their doors on Monday 15th June. The retail sector has been in lockdown since March due to the restrictions caused by Covid-19 pandemic. Restaurants and Pubs must remain shut until at least July (Photo by Keith Mayhew / SOPA Images/Sipa USA)
Shoppers shelter from the rain outside Harrods department store in London, Wednesday, July 1, 2020.Companies linked to hospitality and travel in Britain are shedding thousands of jobs as the longer term consequences of the COVID-19 pandemic take hold, choosing to slim down for survival rather than await potential government handouts. Even stalwarts such as British shopping icon Harrods reportedly drew plans for 700 cuts, blamed in part on a lack of tourists.(AP Photo/Alastair Grant)
A Upper Crust in Charing Cross Station, London as SSP, the company behind railway station and airport chains, is reportedly planning to make more than half of its UK workforce redundant. Picture date: Friday July 3, 2020.
Shoppers shelter from the rain outside Harrods department store in London, Wednesday, July 1, 2020.Companies linked to hospitality and travel in Britain are shedding thousands of jobs as the longer term consequences of the COVID-19 pandemic take hold, choosing to slim down for survival rather than await potential government handouts. Even stalwarts such as British shopping icon Harrods reportedly drew plans for 700 cuts, blamed in part on a lack of tourists.(AP Photo/Alastair Grant)
Closed shops in a Leicester city centre street, England, Tuesday June 30, 2020. The British government has reimposed lockdown restrictions in the English city of Leicester after a spike in coronavirus infections, including the closure of shops that don't sell essential goods and schools. (AP Photo/Rui Vieira)
Fashion retailer Monsoon Accessorize has reportedly warned landlords that they have a week to offer up rent waivers or it will permanently close down stores as they are on the brink of falling into administration, which could place 3500 jobs at risk of redundancy. The chain temporarily shut all 220 Monsoon and Accessorize stores on March 26 when the government ordered all non-essential shops to temporarily shut to stop the spread of coronavirus. (Photo by Dave Rushen / SOPA Images/Sipa USA)
A woman passes a closed down shop in the city centre of Sunderland, England, Wednesday, March 13, 2019. Sunderland voted for Brexit to make itself heard, and in hope of a brighter future. Almost three years later, residents are still waiting. (AP Photo/Frank Augstein)
Debenhams set to plunge into administration
CARDIFF, WALES - MARCH 30: A close-up of a Carluccio's restaurant sign in Cardiff Bay on March 30, 2020, in Cardiff, Wales. Carluccio's has entered into administration due to problems made worse by the Coronavirus. The Italian restaurant chain has 71 restaurants across the UK and employs 2000 staff. The Coronavirus (COVID-19) pandemic has spread to many countries across the world, claiming over 35,000 lives and infecting hundreds of thousands more. (Photo by Matthew Horwood/Getty Images)
CARDIFF, WALES - MARCH 30: A close-up of a Carluccio's restaurant sign in Cardiff Bay on March 30, 2020, in Cardiff, Wales. Carluccio's has entered into administration due to problems made worse by the Coronavirus. The Italian restaurant chain has 71 restaurants across the UK and employs 2000 staff. The Coronavirus (COVID-19) pandemic has spread to many countries across the world, claiming over 35,000 lives and infecting hundreds of thousands more. (Photo by Matthew Horwood/Getty Images)
Coronavirus: Debenhams to file for administration
CARDIFF, UNITED KINGDOM - MARCH 17: A general view of a Carphone Warehouse store on March 17, 2020 in Cardiff, Wales. The phone retailer has announced the closure of all its standalone stores today with the loss of 2800 jobs. (Photo by Matthew Horwood/Getty images)
Empty shelves inside the Folkestone Debenhams store in the final few days of the Everything Must Go sale before closing down on 13th Jauary 2020 in Folkestone, Kent. United Kingdom. The company announced the closure of 19 stores across the UK after going into administration in 2019. (photo by Andrew Aitchison / In pictures via Getty Images)
The Folkestone Debenhams store in the final few days of the Everything Must Go sale before closing down on 13th Jauary 2020 in Folkestone, Kent. United Kingdom. The company announced the closure of 19 stores across the UK after going into administration in 2019. (photo by Andrew Aitchison / In pictures via Getty Images)
People walking past the sale signs outside the Folkestone Debenhams store in the final few days of the Everything Must Go sale before closing down on 13th Jauary 2020 in Folkestone, Kent. United Kingdom. The company announced the closure of 19 stores across the UK after going into administration in 2019. (photo by Andrew Aitchison / In pictures via Getty Images)
FILE PHOTO: The spread of coronavirus disease (COVID-19) in Hemel Hempstead
A woman walks past a shop with closing down sales signs, in west London, Friday May 1, 2009. Company insolvencies in England and Wales jumped 56 percent in the first quarter compared to a year ago, while individual insolvencies rose 19 percent, the government said Friday in its latest count of casualties in the recession. The Insolvency Service said there were 4,941 liquidations in the first quarter, up 7.1 percent from the previous quarter. In the 12 months through the first quarter, about 1 of every 130 companies went into liquidation, it added.The 29,774 individual insolvencies reported was up 1.6 from the previous quarter. (AP Photo/Lefteris Pitarakis)
A Shoe Zone store in Nottingham which is closing down. The company is planning to cancel its final dividend payment, after witnessing a drop in footfall as a result of the Covid-19 coronavirus pandemic. (Photo by Tim Goode/PA Images via Getty Images)
All reduced stock in a closed down shop in Camden Town on 14th January 2020 in London, England, United Kingdom. With much economic uncertainty in the UK following Brexit and with more competition from online retailers, the high street is facing difficult times. (photo by Mike Kemp/In Pictures via Getty Images)
LONDON, UNITED KINGDOM - 2019/11/28: Shoppers walk past the Closing Down signs in the window of Forever 21 store on Oxford Street in London. (Photo by Steve Taylor/SOPA Images/LightRocket via Getty Images)
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Laura Ashley nearing collapse due to coronavirus outbreak
A general view of a Laura Ashley store in South West London as the home furnishings and fashion retailer today said UK like-for-like sales were down almost 10\% in the tough trading climate.
Debenhams to appoint administrators for second time in a year
Chain to close all 79 UK stores and online business after appointing PwC as administrators. Mothercare is to close all its 79 UK stores and online business with the potential loss of 2,800 jobs after appointing administrators from PricewaterhouseCoopers on Tuesday. The administration will not include Mothercare’s profitable overseas operations, which have more than 1,000 stores in over 40 countries. The company, which opened its first store in 1961 and has been listed on the London stock exchange since 1972, has struggled to compete with cheap supermarket clothing ranges and the rise of online shopping. Zelf Hussain, joint administrator and PwC partner, said Mothercare’s stores would be closing over the coming “weeks and months” with the loss of 2,485 retail jobs. The administration also affects 384 head office and distribution staff. “This is a sad moment for a well-known high street name. No one is immune from the challenging conditions faced by the UK retail sector. Like many other retailers, Mothercare has been hit hard by increasing cost pressures and changes in consumer spending,” he said. “It’s with real regret that we have to implement a phased closure of all UK stores. Our focus will be to help employees and keep the stores trading for as long as possible.” Mothercare warned on Monday it was planning to call in administrators, after it became clear the UK business could not return to profitability. In the 1980s, British designer Sir Terence Conran merged Mothercare with Habitat and then British Home Stores to form Storehouse, but the group was broken up in 2000 when BHS was sold to Sir Philip Green. After acquiring the Early Learning Centre toy business in 2007, Mothercare had more than 400 stores in the UK. It has gradually been shutting UK stores for years and its efforts stepped up dramatically last year when it cut 60 stores through an insolvency process called a company voluntary arrangement (CVA). It sold the Early Learning Centre earlier this year. Sofie Willmott, lead retail analyst at retail analysts GlobalData, said: “Mothercare’s fall into administration comes as no surprise following its [CVA] in 2018, profit warning in July this year and its prolonged poor UK performance. “The retailer has failed to stand out as a specialist destination with new parents turning to competitors that offer a better proposition either in terms of low prices, convenience or service, such as Amazon and John Lewis. “Its strategy to cull store numbers in recent years and transfer sales online has proved unsuccessful, with digital sales declining as its online offer failed to encourage purchases.”
PwC should have raised the alarm over BHS’s ability to keep trading before the stricken retailer was sold to a serial bankrupt for £1, according to the accountancy watchdog. The Financial Reporting Council (FRC) said an audit of BHS’s 2014 accounts before it was sold by Sir Philip Green had failed to collect evidence pointing to why it should be considered a going concern. BHS collapsed into administration a year after the sale to Dominic Chappell, resulting in the loss of 11,000 jobs, causing public outcry over its failure and a raft of regulatory investigations. In a damning report, the watchdog said the accounts were “incomplete, inaccurate and misleading”, and presented an optimistic picture of the retailer’s financial performance. The FRC’s report underpinned a decision to issue PwC with a record £6.5m fine for its accounting sign-off. Steve Denison, the PwC partner in charge of the BHS audit, also faced a £325,000 penalty and was effectively handed a 15-year ban from the profession. BHS - The history of British Home Stores The FRC report said both PwC and Mr Denison had “failed to gather any audit evidence on which to conclude that the going concern assumption was appropriate".  “Based on the audit evidence obtained, they should have concluded that a material uncertainty existed about BHS Group and BHS’s ability to continue as going concerns.” The watchdog criticised Mr Denison for only recording two hours of audit work and delegating too much work to a “very junior” member of staff. In assessing the accounts, it found that BHS’s managers had made “unreasonable” and “very optimistic” assumptions about the retailer’s financial performance that should been investigated by the auditors. The BHS management team assumed losses would decline by 10pc every year over a five-year period, forecasting that BHS would break-even from 2022 onwards. The publication of the report came despite Sir Philip taking the FRC to court to secure an injunction to stop it entering the public domain, claiming it was “highly prejudicial” of his directors at Arcadia-owner Taveta Investments.  BHS in numbers The High Court dismissed the attempt in June, but the FRC delayed publication of the report. Taveta’s lawyers had also pushed for language in an early version of the report to be changed. They wanted an FRC statement that the management assumptions of the BHS’ losses “were not reasonable” to be redrafted as “optimistic”. The final report read that “this assumption should have appeared to the respondents to be very optimistic given that there was a general trend of increasing losses".  Despite making a number of revisions, Taveta said the report still gave “an incomplete and potentially misleading picture into BHS’s affairs”. It added: “Taveta made available to BHS substantial cash, real estate assets and bank guarantees at completion of the sale which supported the business plan and allowed it to continue to trade.” Frank Field, chairman of the work and pensions select committee, who led an inquiry into BHS’s collapse, said the report pointed to “the most incredible example of complacent audit rubber-stamping one could fear to imagine".  How BHS was pushed to the edge He called on Sir Philip to publish evidence explaining why Taveta considered BHS to be a going concern when it was sold. “The FRC has accepted Taveta’s arguments that they were simply 'very optimistic' about BHS’s prospects as a going concern,” the veteran Labour MP added. “That sounds like a euphemism of the most preposterous proportions. “If Sir Philip and his fellow directors really do believe they had proper evidence that BHS was a going concern, then surely they will be happy to put that evidence in the public domain so that BHS employees, pensioners and creditors can judge for themselves.” A spokesman for PwC said the firm was “sorry that our work fell well below the professional standards expected of us and that we demand of ourselves”, and that “whilst the failings did not contribute to the collapse of BHS over one year later, they were serious”, which was reflected in the settlement. Mr Denison declined to comment, but previously stated that he regretted the mistakes that led to the FRC’s decision and it was “heartbreaking to finish a previously unblemished 30 year career at PwC in this way". 
General view of a BrightHouse store in Marlowes, Hemel Hempstead, as the rent-to-own operator has confirmed it has fallen into administration with more than 2,400 jobs at risk. (Photo by Jonathan Brady/PA Images via Getty Images)
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A Beales department store in Bournmouth. The company is reportedly on the brink of collapse. Photo: Beales
Photo by: KGC-520/STAR MAX/IPx 2020 3/19/20 Fashion Retailers are closing down and emptying their shelves on Westbourne Grove in Notting Hill including Gwyneth Paltrow's pop up clothes shop Goop as Coronavirus fears spread in London.
Photo by: KGC-520/STAR MAX/IPx 2020 3/19/20 Fashion Retailers are closing down and emptying their shelves on Westbourne Grove in Notting Hill including Gwyneth Paltrow's pop up clothes shop Goop as Coronavirus fears spread in London.
Photo by: KGC-520/STAR MAX/IPx 2020 3/19/20 Fashion Retailers are closing down and emptying their shelves on Westbourne Grove in Notting Hill including Gwyneth Paltrow's pop up clothes shop Goop as Coronavirus fears spread in London.
Photo by: KGC-520/STAR MAX/IPx 2020 3/19/20 Fashion Retailers are closing down and emptying their shelves on Westbourne Grove in Notting Hill including Gwyneth Paltrow's pop up clothes shop Goop as Coronavirus fears spread in London.
A woman passes closed down shops in the city centre of Sunderland, England, Wednesday, March 13, 2019. The city's unemployment rate is well above the national average, and pockmarked and shuttered buildings with broken windows scar its landscape. Renewal has been made harder by years of public-spending cuts under a deficit-slashing British government.(AP Photo/Frank Augstein)
Headless full body mannequins for sale in the window of the Folkestone Debenhams store during the final few days of the Everything Must Go sale before closing down on 13th Jauary 2020 in Folkestone, Kent. United Kingdom. The company announced the closure of 19 stores across the UK after going into administration in 2019. (photo by Andrew Aitchison / In pictures via Getty Images)
LONDON, UNITED KINGDOM - 2019/11/28: Shoppers walk past the Closing Down signs in the window of Forever 21 store on Oxford Street in London. (Photo by Steve Taylor/SOPA Images/LightRocket via Getty Images)
CARDIFF, UNITED KINGDOM - SEPTEMBER 22: A Thomas Cook travel agent store on September 22, 2019 in Cardiff, United Kingdom. Thomas Cook has collapsed after talks over the weekend with lenders, shareholders and the UK government failed to piece together a rescue package for the 178-year-old travel company. The collapse leaves 21,000 jobs at risk and 150,000 UK holidaymakers stranded abroad. (Photo by Matthew Horwood/Getty Images)
Closing down banner sign shop window, Jack Wills store, Marlborough, Wiltshire, England, UK. (Photo by: Geography Photos/Universal Images Group via Getty Images)
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A report in The Guardian said that the Treasury did not rule out introducing such a scheme and quotes sources as saying it might opt for smaller sums if it does decide to introduce it.

Sunak is expected to make announcements on "the next stage in our plan to secure Britain's recovery" on 8 July, where he is expected to say the number of work coaches will double from 13,500 to 27,000 in a bid to try to help jobseekers back into employment.

Some countries have successfully launched similar initiatives. For instance, back in April around 50 cities in China distributed vouchers amounting to more than CNY6bn ($849m), according to data compiled by Bloomberg.

Meanwhile, 4 July saw the reopening of businesses including restaurants, bars, cinemas and hairdressers.

-This article first appeared on Yahoo

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