Participating restaurants will offer a 50% discount on meals during the month of August under new government plans, these are in an effort to boost the hospitality sector as lockdown restrictions have largely been lifted across the UK.
The “eat out to help out” discount was unveiled by Chancellor Rishi Sunak alongside a series of measures to restart the economy after the coronavirus crisis. Many restaurants already offer food delivery to customers.
Under the scheme, consumers can receive up to £10 off per head if they eat out from Monday to Wednesday next month. It was also announced that VAT on hospitality and tourism would decrease to 5%. The VAT reduction will be in place for the next six months.
Mr Sunak said the country was facing a “unique moment” because of Covid-19, adding: “We need to be creative.”
After being closed for more than three months due to lockdown, pubs and restaurants opened this past Saturday. Safety measures have been implemented to protect customers and employees from Covid-19. The Chancellor wants to reassure the public that it is now safe to eat out “I know people are cautious about going out. But we wouldn’t have lifted the restrictions if we didn’t think we could do so, safely,” he said.
The discount will apply to food and soft drinks up to £10 per person, those purchasing alcohol will not be eligible. The Treasury stated that the 50% discount will apply at participating cafes, restaurants, and pubs across the UK. During August, it can be used unlimited times. This plan will help get “customers back into restaurants, cafes and pubs” and protect “the 1.8 million people who work in them”, said Mr Sunak.
The scheme hasn’t come without a level of criticism though, as some question subsidising meals out while British people are still dying from the coronavirus. Furthermore, there are currently a large number of people struggling financially during this unprecedented historical moment.
Any business that wants to participate in the scheme must register through a website which will go live on Monday 13 July. Mr Sunak added: “Each week in August, businesses can then claim the money back, with the funds in their bank account within five working days.”
The VAT cut, from 20% to 5%, would apply to “eat-in or hot takeaway food from restaurants, cafes and pubs; accommodation in hotels, B&Bs, campsites and caravan sites [and] attractions like cinemas, theme parks and zoos.”
This reduced tax rate will go live on Wednesday 15 July, and will remain in place until 12 January 2021.
UK Hospitality, the trade body representing the industry, welcomed the moves, along with Mr Sunak’s plans to prevent mass unemployment through initiatives such as creating thousands of job placements for young people. Although, Kate Nicholls, UK Hospitality’s chief executive said: “This doesn’t mean we are out of the woods and there are still significant challenges ahead.
“The biggest of these is the spectre of rent liabilities, which many businesses are still facing from their closure period. We are going to need government support on this before too long.”