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UK hails its ‘eat out to help out’ dining discount scheme

The UK Treasury has hailed its “eat out to help out” discounts, saying the scheme had brought people back into restaurants and pubs in the first two weeks of August.
In an analysis of the figures published on Tuesday, the government estimated people ha…

The UK Treasury has hailed its "eat out to help out" discounts, saying the scheme had brought people back into restaurants and pubs in the first two weeks of August. In an analysis of the figures published on Tuesday, the government estimated people had taken advantage of the discounted meals 35m times in the fortnight with 85,000 restaurants taking part. It had already received 48,000 claims from these businesses for subsidies to pay for the 50 per cent discount on food bought for consumption on the premises on Mondays to Wednesdays during August.

The scheme, which lasts until the end of August and aims to encourage cautious consumers to venture out after months of staying away from restaurants and pubs, is set to cost taxpayers GBP500m. It came on top of the government's GBP2.5bn decision to cut the value added tax rate on hospitality, accommodation and attractions from 20 per cent to 5 per cent until mid-January.

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Follow FT's live coverage and analysis of the global pandemic and the rapidly evolving economic crisis here. Initial indications from the restaurant sector suggest that the policy has worked to increase bookings in the early part of the week in its first six days of operation.

Figures from OpenTable, an online restaurant reservation service, show that on Mondays to Wednesdays in the first two weeks of August restaurant bookings were between 10 per cent and 48 per cent higher than on the equivalent days in 2019. Some of the gain was, however, displaced from Thursdays to Sundays. In July, the better booking figures were recorded at weekends and this changed to the start of the week in August.

Column chart of Annual change (%) showing Restaurant bookings surge on 'eat out to help out' days in August

Rishi Sunak was delighted with the take-up. "Today's figures show that Britain is eating out to help out -- with at least 35m meals served up in the first two weeks alone, that is equivalent to over half of the UK taking part and supporting local jobs in the hospitality sector," the chancellor said in a statement.

He urged more restaurants to take part so that jobs in the sector could be protected and pledged that the government would reimburse restaurants and pubs for the discounts within five working days after they claimed.

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The chancellor's speedy payment pledge came in response to some concerns among restaurants that they might face cash flow difficulties if they took part in the scheme.  The scheme offers food and non-alcoholic drinks at a 50 per cent discount up to GBP10 per person in any participating pub, cafe or restaurant although diners are not limited to spending only GBP10 a head. With 1.8m jobs in the food and beverage sector and a high number of these people low paid and furloughed since the coronavirus crisis started, the government hopes the scheme will encourage people to return to their pre-crisis habits.

The test of whether the discounts have been a success will come in September after they have been withdrawn.