Chancellor Rishi Sunak is planning on revealing the budget for the United Kingdom this week, with many analysts indicating that the chancellor is thinking about bringing back the Eat Out to Help Out scheme.
The scheme ran from the beginning of August to the end of August last year, which allowed customers to have a 50% discount on food and non-alcoholic drinks up to a maximum of £10 per person every Monday, Tuesday and Wednesday. Restaurants who signed to the scheme were then able to claim the discounts back from HM Revenue & Customs (HMRC). At the time, the scheme’s main aim was to help protect the 1.8million jobs of the hospitality industry and to encourage people to return to restaurants in a safe manner.
When the scheme was launched, major outlets took part in the scheme and other individual pubs and restaurants. In the first week of the scheme, 10.5 million meals were claimed and then 35 million in the second. By the end of August, more than 64 million meals were subsided by the programme. OpenTable, an online booking site, found a 53% increase in reservations in August 2020, compared to the previous year.
With outdoor dining for pubs, restaurants and cafes set to open from 12th April, if cases of Covid-19 keep going down, the Eat Out to Help Out scheme could be used once again to help the hospitality sector. In 2020, nearly 30,000 restaurant jobs were lost, and hospitality firms’ branch closures increased by 75.8%, showcasing how badly the pandemic affected this industry. Deliveroo and 300 restaurant groups are calling on the government to reintroduce this scheme, with companies expressing in a letter to the government that continued government support will be “critical” for this industry after the lockdown. There are also rumours of pints of alcohol being cut, and according to the Social Market Foundation, changes to alcohol duty could lift pub sales by 100 million pints a year.
However, despite an increase of support for this sector because of the Eat Out to Help Out scheme, there are reports this scheme led to increased Covid-19 cases. Thiemo Fetzer, an economist at the University of Warwick, found that the scheme was closely linked to increased cases over the summer. He suggested that the scheme may be responsible for around 8-17% of all new detected Covid-19 clusters. The scheme also cost the taxpayer £522 million, which is another potential drawback for this scheme. Observers have already seen the government paying out vast sums of money to help address this pandemic. The Eat Out to Help out scheme could bring another cost to the government and the taxpayer that it may not need.
The hospitality industry has been affected by this pandemic, and the statistics show this reality. Loss of jobs, loss of incomes, and restaurants collapsing is this reality, and we all need to support this industry in a safe way. However, The Eat Out to Help Out scheme is not the answer to this struggling industry. Worse, the Eat Out to Help out scheme will be the demise of this industry, especially for the independent and local outlets.
The scheme brought huge demand to this sector, with restaurants experiencing a surge in bookings. Yet, this was all short-lived, and before you knew it, we were back in our homes and back in lockdown. We were back eating takeaways, and we were back doing zoom birthdays, rather than being out and about and enjoying the atmospheres of pubs, restaurants and cafes. The government wants to be cautious when leaving this terrible lockdown, which is admirable, but they will go against this message if they implement this scheme once again. While the Murdoch owned media wanted to claim that this scheme was a big win for the government, using cringe-worthy tag lines like “Rishi Dishes”, stories of hospitality workers unable to cope came through as well.
The flow of people from this scheme was unbearable for those working in this sector, and the number of staff working could not match the demand. It created unfavourable conditions for waiters and servers, and it increased the chances of cases and deaths from this virus, which the Warwick study can prove. The Eat Out to Help out scheme is a disaster waiting to happen.
The government should not keep the scheme in the fridge and use it for leftovers. It deserves to be in the bin and out of the government’s mind.