Rishi Sunak takes UK out for dinner! Chancellor to pick up tab for meals out next month

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Mr Sunak urged the public to “eat out to help out” businesses struggling to get back on their feet after the shutdown. The unprecedented measure comes on top of a £4billion VAT cut on food, accommodation and attractions to protect 2.4 million jobs. Business leaders said the package will kickstart the hardest hits parts of the economy and restaurant chains saw a hike in share prices.

Senior Tories said paying the public to go to pubs was a “radical” way to save the hospitality sector.

Mr Sunak said that his summer meal deal discount has never been tried in the UK before but the government has had to find innovative ways to deal with impact of coronavirus on the economy.

“We need to be creative,“ he said. “So, to get customers back into restaurants, cafes and pubs and protect the 1.8 million people who work in them, I can announce for the month of August, we will give everyone in the country an ‘eat out to help out’ discount.”

The discount can be used as many times as customers want on any eat-in meal but alcoholic drinks will not be covered.

Businesses will need to register online from next Monday and will have the money paid into their accounts within five working days of making a claim.

Around 129,000 businesses are expected to benefit and it is hoped it will help protect 1.8 million jobs, many of which are held by young people struggling to make ends meet.

An average family spends £19.40 a week on eating in cafes and restaurants, according to Treasury research.

Shares in Wagamama-owner The Restaurant Group rose by 2.6 percent shortly after the Chancellor’s statement.

Chief executive officer Andy Hornby said: “We warmly welcome many of the initiatives announced today including cutting VAT, support for team members returning from furlough and the August discount scheme. This will be a genuine help as we welcome back our customers in what  will continue to be a very challenging market”.

Former business secretary Andrea Leadsom, below, said: “Never done before – government paying us all to go back to restaurants, cafes and pubs via a discount for food. Interesting and radical way to get the hospitality sector going and save jobs.”

Mr Sunak’s mini-budget was focused on saving jobs after months of hardship for businesses and workers.

To help revive the ailing hospitality and tourism sectors, he announced VAT will be cut from 20 percent to five percent for the next six months.

It will apply to eat-in and hot takeaway food from restaurants, cafes and pubs.

The move will benefit accommodation in hotels, B&Bs, campsites and caravan sites, along with attractions such as cinemas, theme parks and zoos.

Businesses can pocket the cash but the Treasury hopes they will pass on the benefit to customers.

It estimates the change will save households around £160 per year on average.

The VAT cut will start on July 15 and run until January 12.

Mr Sunak said: “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.”

Suren Thiru, the head of economics at the British Chambers of Commerce, said: “The Chancellor has listened to our call for a temporary cut in VAT which will kickstart consumer spending in some parts of the economy. This is a welcome step and will help to stimulate a more rapid pickup in activity in those sectors and supply chains hardest hit as the economy gradually reopens.”

Kate Nicholls, the chief executive of UK Hospitality which represents the pub and restaurant trade, said the VAT cut and Eat Out scheme would have a significant impact on the sector as it tries to bounce back.

She said: “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 a sign that we are ready to welcome them back safely. The future of many businesses and jobs depends on it.”

David Weston, the chairman of the Bed & Breakfast Association, said: “We are delighted by the VAT cut on behalf of our larger members, guesthouses and small hotels who are VAT registered.

“It will help stimulate demand and, once our borders open to incoming tourism, will also help UK tourism overall as Britain’s VAT rate has been amongst the highest of our international competitors.”

Joss Croft, the chief executive of tourism trade association UKinbound, said the measures will “deliver immediate positive impacts”.

But he warned that many firms involved in inbound tourism are “on the brink” and will not benefit from those measures.

“Longer-term support will still be required for these businesses,” he added.

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