The UK government has announced a groundbreaking new programme to subsidise meals in Britain’s restaurants for an entire month.
Chancellor Rishi Sunak said on Wednesday the government would give people a 50% discount on meals under its new “Eat Out to Help Out” scheme. The programme will run Monday to Wednesday for the entire month of August.
“Meals eaten at any participating business, Monday to Wednesday, will be 50% off, up to a maximum discount of £10 ($12.50) per head for everyone, including children,” the chancellor said. “Businesses will need to register, and can do so through a simple website, open next Monday.
“Each week in August, businesses can then claim the money back, with the funds in their bank account within five working days.”
Diners can get discount on a full meal including non-alcoholic drinks. The “Eat Out to Help Out” scheme will cost the government an estimated £500m.
Pubs, restaurants, cafes, and other establishments that serve food can take part in the programme. The government estimates 130,000 businesses will be eligible to take part in the scheme, which it hopes will protect 1.8 million jobs.
Hospitality has been one of the hardest hit sectors by the COVID-19 pandemic and subsequent lockdown. 1.4 million people in accommodation and food services have been furloughed since March, according to the Treasury, second only to retail as the worst hit sector.
Alongside subsidising meals, the chancellor also announced a temporary VAT cut for food, accommodation, and attraction businesses. VAT in these sectors will be cut from 20% to 5% until January next year, saving tourism and leisure businesses an estimated £4bn in taxes.
The chancellor’s announcements provided a boost to shares of publicly listed restaurant companies.
Shares in The Restaurant Group (RTN.L), which owns chains like Frankie & Benny’s and Wagamama, jumped 9%. Stock of Tasty (TAST.L), which owns the Wildwood pizza chain and Dim T restaurants, rose 2.7%.
The announcements came during an extraordinary ‘summer statement’ delivered by the chancellor on Wednesday setting out how the government will support the UK economy in the wake of the COVID-19 lockdown. Sunak announced up to £30bn worth of new policies aimed at supporting, creating, and protecting jobs.