Rishi Sunak’s announcement of a half-price meals scheme has been dismissed as an eye-catching gimmick by critics of his post-coronavirus mini-Budget.
The Chancellor today unveiled an Eat Out To Help Out programme for Britons to enjoy 50 per cent discount at restaurants to help revive the struggling hospitality sector.
On Mondays, Tuesdays and Wednesdays in August, diners will be able to claim the reduction, up to a maximum of £10 per head, at participating businesses which will claim the money back from the Treasury.
Mr Sunak hailed the scheme a ‘creative’ solution to get the restaurant trade back on its feet – but the prospect of a half-price Nando’s was branded financial chicken feed compared to the support people were crying out for.
While the hospitality industry welcomed the Chancellor’s incentives for people to eat out, hard-up Britons were scathing.
Within minutes of Mr Sunak wrapping up his address to MPs in the Commons, social media was flooded with reaction such as: ‘No worries if you can’t pay your rent, just copy a cheeky half-priced Nando’s on Monday.’
Many also said the Treasury’s bankrolling of meals was tantamount to reinventing Tastecard – the popular scheme which allows diners to enjoy bargain prices.
Rishi Sunak today announced a ‘Eat Out To Help Out’ scheme to try to save the struggling hospitality industry
Speaking in the House of Commons, the Chancellor said: ‘The final measure I am announcing today has never been tried in the UK before.
‘This moment is unique. We need to be creative. So to get customers back into restaurants, cafes and pubs and protect the 1.8million people who work in them, I can announce today that for the month of August we will give everyone in the country an Eat Out To Help Out discount.
‘Meals eaten at any participating business, Monday to Wednesday will be 50 per cent off up to a maximum discount of £10 per head for everyone, including children.
‘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.’
Mr Sunak’s new eating out scheme was one of two major interventions he announced at lunchtime to deliver a boost to the hospitality and tourism industries.
Pubs which serve food will also be eligible for the scheme, but only non-alcoholic drinks are included in the discount.
The other was a significant cut to the VAT rate which applies to food, accommodation and attractions like cinemas.
Mr Sunak (pictured in the Commons beside the PM) also announced a temporary VAT cut from 20 per cent to five per cent for the hospitality and tourism sectors
Mr Sunak’s two-pronged strategy to breathe life back into the beleaguered hospitality sector, which has only began to reopen after being shuttered for three months (Di Maggio’s in Glasgow, pictured), was welcomed by industry leaders
He said: ‘At the moment VAT on hospitality and tourism is charged at 20 per cent so I have decided for the next six months to cut VAT on food, accommodation and attractions.
‘Eat in or hot takeaway food from restaurants, cafes and pubs, accommodation in hotels, B&Bs, camp sites and caravan sites.
‘Attractions like cinemas, theme parks and zoos. All these and more will see VAT reduced from next Wednesday until January 12 from 20 per cent to five per cent.
‘This is a £4billion catalyst for the hospitality and tourism sectors, benefiting over 150,000 businesses and consumers everywhere, all helping to protect 2.4 million jobs.’
Non-alcoholic drinks also fall within the products eligible for the VAT cut.
The two-pronged strategy to breathe life back into the beleaguered hospitality sector, which has only began to reopen after being shuttered for three months, was welcomed by industry leaders.
Kate Nicholls, chief executive of UK Hospitality which represents the pub and restaurant trade, hailed the both the VAT cut and the Eat Out scheme.
She said: ‘It is reassuring that the Chancellor singled out hospitality and tourism as a vital part of the UKs economy and a pillar of social life around the UK.
She added: ‘This significant VAT cut, heightened ability to retain staff and incentives for consumers to eat out together amount to a huge bonus.
‘We hope that the UK public rightly sees it as sign that we are ready to welcome them back safely. The future of many businesses and jobs depends on it.’
Russell Nathan, senior partner at accountancy firm HW Fisher, said: ‘Our restaurants, pubs, shops and hotels are struggling.
‘This is a timely announcement from Government as businesses are in desperate need of a clear action plan.
‘It is vital we see the hospitality industry back up and running, and these measures announced today will provide an essential lifeline for many UK businesses.’
But the Chancellor’s eye-catching food discount policy was dismissed as a ‘gimmick’ by a leading free-market think tank.
Julian Jessop from the Institute of Economic Affairs said ‘the Eat Out to Help Out scheme may be a gimmick too far.
‘It is at least market-led, in that consumers themselves will decide which businesses should benefit.
‘However, it seems an overly complicated way to deliver a boost to demand lasting just a few days in August.’
Mr Sunak also faced scrutiny from his own backbenches over why hospitality was being showered with support while gyms, which remain closed, were not.
Pressing the Chancellor on when gyms would be given the green light to reopen, Tory MP Tim Loughton said the Government’s message should be ‘eat out to help out to work out’.
Mr Sunak replied: ‘I wholeheartedly agree with him about gyms and hopefully, as the Prime Minister has indicated previously, he’s keen to see progress made there as well.’
While some pubs and restaurants ran takeaway services during lockdown, thousands lay mothballed and only welcomed back customers last Saturday.
A staggering 15million pints were consumed on so-called Super Saturday, but swathes of the public remain cautious about heading to the pubs while the virus remains a present threat.
And many are tightening their purse strings following a tough lockdown which forced pay cuts across the boad.
Mr Sunak’s mini-Budget was woven with incentives for shoppers to loosen their belts and spend money to fire up the economy.
He announced an increase in the stamp duty threshold from £125,000 to £500,000 until March 31.