Politics

Why doesn't Britain have a high street voucher scheme like Northern Ireland?

British retailers are calling for a “shop out to help out” scheme to give every Northern Irish consumer a £100 voucher to be launched UK-wide.

The Chancellor Rishi Sunak promotes the "eat out to help out" scheme, which retailers said created a “sense of envy.” Photo Credit: HM Treasury

Citizens of Northern Ireland will be able to request a free £100 prepaid card from September 27, to be spent at any retailer with a brick-and-mortar presence in the country. It’s a measure introduced to kickstart the faltering high street economy, one faced with the double whammy of Covid and the rise in online shopping. But Northern Ireland is the only place in the UK where it’s happening.

Gordon Lyons, Northern Ireland’s economy minister, said the NI Direct voucher aims to boost footfall to struggling high streets. And now the UK’s leading retail association is calling for a similar scheme across the UK to provide a shot in the arm for retailers and hospitality. 

Household consumption is the largest element of expenditure of the UK economy — comprising 58 percent of GDP in 2020, according to the House of Commons library — making it central to the pandemic recovery. Policy analysts fear the combination of September’s Job Retention Scheme axe, the £1,040-a-year universal credit cut, the upcoming rise to national insurance contributions and energy bill hike may compress spending and push high street businesses towards bankruptcy.

“A voucher scheme like this would really kickstart consumer confidence,” Andrew Goodacre, chief executive of the British Independent Retailers Association (Bira), told The Big Issue.

“We’ve got the most important Christmas ever coming up for all the retail,” Goodacre said, “and even looking into 2022 we still will need some kind of impetus to bring people fully back to the high street.”

“So we should look at this experiment in Northern Ireland and learn from it,” he added.

James Smith, research director at think tank the Resolution Foundation, said the UK government is “taking a big risk” not introducing measures to uplift consumer spending to kickstart the recovery.

“What’s happening now is we’ve got the UC cut, we’ve got higher energy bills, we’ve got the job retention scheme coming to an end, and families are basically being hit from a number of different angles,” Smith told The Big Issue, adding: “There are quite a lot of ways families have been clobbered recently.”

Resolution Foundation last year called for a high street voucher scheme of £500 for every consumer and £250 for every child, pegged to the shortfall in consumer demand.

Smith added that with benefit levels far lower than previous recessions, the UK could become locked in a period of low-growth.

“If there is a risk that the recovery is going to be too weak, they should act now — because waiting to act basically risks entrenching that weak recovery, making it harder for us to recover in the future,” he said.

A Treasury spokesman said: “Throughout the pandemic we have supported shops through our £400bn Plan for Jobs – which includes £80bn in loans, £25bn in grants, £16bn in business rates relief and our £68.5bn furlough scheme.”

They added: “We’re doubling down on our plan as the economy rebounds – focusing our support on giving people the skills and opportunities they need to succeed in the jobs of tomorrow.”

The Northern Irish vouchers are eligible to be spent at any retail, hospitality or service business but Lyons, a DUP Stormont MP, urged consumers to prioritise independent shops over multinational corporations. It is part of a plan expected to cost £145 million.

A similar plan was introduced in the US where many consumers were sent three stimulus cheques of $1,200 (£1,012), $600 and $1,400 to revivify consumer demand. Retailers in the UK want a more targeted scheme — ruling out online spending — aimed at bricks-and-mortar high street firms.

The calls come after the UK government’s month-long “eat out to help out” scheme last August, which saw restaurants, pubs and cafes claim over £849 million from the programme. 

Goodacre, who with Bira represents over 4,000 retailers, said retailers felt a “sense of envy” when last year’s hospitality scheme was announced but the high street was left out.

Despite taks with the Department for Business, Energy and Industrial Strategy (Beis) earlier this year — with Bira pushing for a discount or rebate system as deployed in “eat out to help out” —  Goodacre said he felt there was simply a “lack of appetite” in Westminster for a scheme targeting retail.

He added retailers this autumn face a “toxic mix” of squashed consumer spending, furlough ending, supply chain hurdles and next year’s expected resumption of higher business rates.

A Treasury spokesman said: “Throughout the pandemic we have supported shops through our £400 billion Plan for Jobs — which includes £80 billion in loans, £25 billion in grants, £16 billion in business rates relief and our £68.5 billion furlough scheme.”

He added: “We’re doubling down on our plan as the economy rebounds — focusing our support on giving people the skills and opportunities they need to succeed in the jobs of tomorrow.”

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