Eat Out to Help Out Scheme hands £250 million back to Government

New data shows that the Eat Out To Help Out Scheme directly benefitted the Government to the tune of £250 million, whilst also saving thousands of jobs in the pub and hospitality sector.

The new data follows figures announced by the Government last week which revealed that a total of 130,000 claims were received for the Scheme equating to a cost of £522 million for the Government, with further claims still to be made.

However, with the Scheme directly contributing £250 million in additional revenue for the Government, as well as boosting consumer confidence to go back again and enjoy the hospitality sector going forwards, the scheme has already delivered a significant return.

According to the data from the trade associations, the Scheme enabled 200,000 staff in the pub and hospitality sector to come out of furlough early to facilitate the increase in trade generated by the initiative. This alone saved the Government almost £150 million in furlough costs.

VAT generated on additional food and soft drink sales from the Scheme generated £30 million for the Treasury and additional sales of alcoholic drinks that accompanied the meals was estimated to have boosted duty and VAT revenues by a further £65 million.

The trade bodies said the Eat Out to Help Out Scheme had shown a significant return on investment for the Government, whilst also helping to kick start the long road to recovery of the hospitality sector and the economy as a whole as it returns from lockdown.

They said further Government investment in the sector was still needed though to get it through the Autumn months and to help ensure a full recovery into the new year.

They called for further Government investment in the sector to boost growth by extending the reduction on VAT rates, reforming Business Rates and cutting beer duty ahead of the next Budget and upcoming Government reviews into Business Rates and Alcohol Duty.

Emma McClarkin, Chief Executive of the British Beer & Pub Association, said:

“The Eat Out to Help Out Scheme has clearly been a success for the Government, pubs and hospitality alike. It has saved tens of thousands of jobs, helped with the recovery of the economy and boosted our sector at a much needed time.  

“Investing in our sector clearly delivers, and we still need further support from the Government if it is to fully recover like we know it can. With the upcoming Autumn Budget, as well as the Business Rates Review, now is an unparalleled time to greatly reduce beer duty, Business Rates and VAT in our sector to give it the significant boost it needs to survive and thrive. Now is the time for the Government to continue investing in our sector to deliver a strong recovery and job security.”

Kate Nicholls, Chief Executive of UKHospitality, said:

“Eat Out to Help Out was a shot in the arm for consumer confidence in eating and drinking out of home, right across the country. It gave our businesses the opportunity to showcase the investment they had made to keep customers safe while also making them feel welcome.

“As we approach Winter we need to ensure the right support in place to stimulate a more sustained demand. A significant starting point would be to extend the VAT cut, ensuring the business rates holiday is continued next year and getting more of the UK economy back on its feet, including those businesses that remain closed.”

Steve Alton, Chief Executive of the British Institute of Innkeeping, said:

“Strengthening consumer confidence has been critical to kick-starting the recovery of the hospitality sector, as well as the wider economy.  The Government investment in Eat Out to Help Out and reduced VAT has allowed many pubs to start their recovery with a better than expected August trading. 

“Further Government support will be required building on this investment to ensure pubs are sustainable businesses in the long term.”