Taxpayer tab for Eat Out to Help Out hits £850m – Telegraph.co.uk

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Diners ate more than 160m discounted meals in August thanks to the Chancellor’s Eat Out to Help Out scheme, at a cost of £849m, official data show.

The Treasury sponsored half the cost of meals up to £10 a head on Mondays, Tuesdays and Wednesdays in August to boost the hospitality sector after the first national lockdown.

New figures from HM Revenue and Customs revealed that more than 49,000 restaurants, pubs and cafes claimed a total of £849m by the end of September. The Treasury had originally budgeted £500m for the scheme. 

Julian Jessop, an independent economist and fellow at the Institute of Economic Affairs, said: “Some of the cash will have subsidised meals that would have been bought anyway. Some of the rest may simply have diverted spending from other activities. We will never know for sure, but it seems unlikely that this was a sensible use of £849m.”

The majority of claims – 55pc – were from restaurants, with pubs accounting for 28pc.

Data published at the end of August had shown £522m was claimed over 100m meals, but while the scheme closed for diners in August, businesses could claim the subsidy from the Government until the end of September, hence the updated total.

Official inflation figures for September show the price of dining out rose after the end of the scheme.

Although the policy helped to lure people back to eating out, it has been blamed for contributing to Britain’s second wave of Covid-19, with the Prime Minister Boris Johnson admitting that it “may have helped to spread the virus”.

A study by the University of Warwick showed there was a spike in Covid-19 infection clusters a week after the scheme’s launch.

The Government also came under fire for refusing to provide additional cash for meals for children from struggling families during the school holidays.

However, the Chancellor has defended the project and suggested that similar policies could be deployed to help sectors such as theatres.

Asked whether he was considering a winter version of the policy in the Spending Review, the Chancellor told Sky News this month: “We want to get consumers spending again, get them out and about, we’ll look at a range of things to see what the right interventions are at that time.”

Source: Thanks https://www.telegraph.co.uk/business/2020/11/25/taxpayers-bill-eat-help-hits-850m/