CHANCELLOR Rishi Sunak, who tomorrow gives his summer update, is being urged to hand every Briton a £500 voucher to be used in shops, hospitality and tourism in a £30 billion package to boost the economy. Nick Mosley spoke to businesses in Sussex about the idea

Many sectors of the economy – from aviation to the arts – have now received grants and Government-backed loans to keep their heads above water during the coronavirus crisis.

However, targeted support for hospitality and the high street, particularly small and independent businesses, continues to prove a challenge for Government strategic planning.

The Treasury has been consulting with organisations including the Resolution Foundation think tank as to how to kickstart recovery for hospitality and shops.

Options include a temporary cut in VAT and the novel idea of offering every adult in the UK a £500 voucher to spend at these businesses over the next 12 months to encourage consumer confidence.

The idea has precedent, having already been adopted by some European countries to reboot consumer spending.

Although costing an estimated £30 billion, it looks increasingly like the most practical idea for the Treasury.

The main alternatives, such as a blanket VAT cut, would benefit businesses but, from a consumer perspective, would have a limited impact on spending by lower income families and the fear is that depositing a one-off cash payment, as once mooted in the 2007 to 2009 recession, would mean those on higher incomes would simply bank the money rather than spend it.

James Smith, research director at the Resolution Foundation, said: “Social distancing has huge implications for firms in sectors like retail, hospitality, tourism and leisure that will last into the 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.

“As well as setting out the biggest ever peacetime job support programme, the Chancellor should get Britain spending in places where it’s needed most.

“A universal high street voucher scheme 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.”

Restaurants and hotels in Sussex welcomed the voucher idea.

“I like the sound of it,” said veteran chef and restaurateur Jeremy Ashpool of Jeremy’s Restaurant at Borde Hill.

“Any stimulus that helps stave off serious economic depression and save jobs while getting customers back into the hospitality and retail sector,must be a good thing”.

Euan Sey, of Brighton’s Curry Leaf Café, said getting people off their sofas and safely back into real world habits could only be a positive for the economy.

“Anything that incentivises people to get out of their homes and into bars and restaurants is worthwhile as far as I’m concerned,” he said.

“It’s not so much about the sales that restaurants like ourselves will get from people using the voucher, more the hope that it will combat the inertia that’s built up among the public from the months of staying at home and ordering everything online.”

Kerry Turner, co-owner of the Blanch House boutique hotel in Kemp Town, Brighton, which reopened at the weekend, agreed.

“We welcome any new initiatives from the Government that would help to support the reopening of our hospitality industry, in particular initiatives that would encourage both day and overnight visitors to city,” he said.

“We are encouraging ‘staycation’ stays at Blanch House and have put together a great staycation package based on a two-night stay.”

Although the voucher concept may encourage some to return to dining and leisure, businesses say that with Covid-19 still in circulation they face an uphill battle to get customers back.

“The vouchers are in principle a good idea. However there are many people who are still wary of venturing out and this voucher won’t change that,” said Celine Leslie of Gravetye Manor near East Grinstead.

“A great deal will depend on how the situation with the virus develops now that there is more freedom.

“Local flare-ups are not good for confidence. Some will leave it to the last moment to spend the voucher, so I don’t think it will have an immediate impact.”

There are also continuing concerns about the economy related not only to the fallout from lockdown but also the ever-shifting trend of people shopping online.

“The internet is great, but if lockdown has taught us anything, we need to touch, see and smell and things before we buy them,” said Gavin Stewart, chief executive of the Brighton Business Improvement District which covers the central shopping areas.

“After the initial boom of non-essential retail opening a couple of weeks ago we have seen a drop in footfall in the city centre. It’s beginning to improve now but any incentive to encourage more one-to-one sales and hospitality visits would only be welcomed. A financial one particularly so.”

Seb Cole of Boho Gelato shares the concern that the Government needs to address the imbalance of overheads between high street and online retailers.

“The Government needs to come up with a solid plan for the future as to how to level the playing field financially for face-to-face businesses versus online,” said Seb. “Trade on the high street was already shrinking at a worrying rate whilst online business boomed even before the pandemic hit.

“I believe that if nothing is done to stimulate and support face-to-face business, we risk irreversible damage to our towns and to the fabric of our society.”

Businesses wonder about how the vouchers could be spent.

“The jewel in Brighton and Hove’s crown is its small independent shops and hospitality establishments,” said Helen Taggart of Metrodeco in Upper St James’s Street. “If the funds end up in the tills of big nationwide fast food chains, supermarkets and pubs, which are focused primarily on shareholder returns, then the benefit will be limited. So we’ll be interested to know how this outcome can be avoided.”