The charity has called on Chancellor Rishi Sunak to give every household in the UK shopping vouchers worth £500 per adult and £250 per child.

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.

Activity in hospitality was down more than 90% in April and sectors reliant on face-to-face contact will continue to be significantly affected while social distancing remains in place.

The Resolution Foundation notes that in countries such as Germany or France, where lockdown restrictions have already eased, leisure and retail trips remain more than 10% down on pre-crisis levels.

The charity says the high street voucher scheme would be universal, delivered via vouchers or smartcards, and activated over a fixed time period such as 12 months. It suggested any scheme should be easy to deactivate if the sectors benefitting from it needed to be closed down in the event of a second wave of coronavirus.

The proposed scheme aims to 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 Resolution Foundation noted that if households were given cash instead of vouchers, this would simply be saved by higher income households, who have already saved money during the pandemic.

A VAT cut meanwhile would do less for lower income households, whose finances are most likely to constrain their consumption, because they tend to spend more of their income on VAT exempt, reduced, or zero-rated  goods.

James Smith, research director at the Resolution Foundation, says: “While every part of the economy has been affected by the current crisis, the stand out feature of this recession is that some areas are far more affected than others.

“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.

“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 – worth £500 per adult and £250 per child – to be spent only in these sectors would kick-start demand in the right parts of our economy, boost living standards and deliver targeted support to the businesses that need help the most.”