NEWS
10/02/2021 14:12 GMT | Updated 10/02/2021 15:04 GMT

Eat Out To Help Out Had 'Limited Effect' On UK Economy

The scheme has already been found to have contributed to a rise in infections.

The government’s Eat Out To Help Out Scheme may have had only a “limited effect” on the UK’s hospitality industry, according to a new study.

Research from the London School of Economics and Political Science found more people visited pubs and restaurants in August when the scheme was running, but only on the days discounts were available.

This increase was not seen to carry over into September once the scheme had ended, and had only a temporary impact on the number of job vacancies being advertised.

But a lack of data meant the study could not verify whether the increased demand for workers had led to more people actually being hired – and, if so, if these jobs were permanent.

Katharina Ziegler, one of the report’s authors, said: “Data limitations and the interaction between different policies complicate any cost-benefit calculation of the programme.

“On top of that, there is evidence from other research indicating the increase in footfall due to Eat Out To Help Out (EOTHO) had an adverse effect on new Covid-19 cases.

“Thus, any economic gains from the scheme may have come at the cost of more infections.”

A study published in October found EOTHO caused a significant rise in new infections, accelerated the second wave of the pandemic and failed to boost the UK economy in the long-term.

The Warwick University paper found “between 8% and 17%” of Covid-19 clusters detected a week after the scheme began could be attributed to the initiative. 

Chancellor Rishi Sunak introduced the Eat Out to Help Out (EOTHO) scheme to offer half-price meals during the month of August as part of a stimulus package.

The scheme was widely popular, with businesses claiming around £840m from the Treasury despite only £500m having been initially set aside, and customers buying some 160m cut-price meals.

By contrast, the entire six-week free school meals scheme that covered the summer holidays was worth £120m. More than 1.3m children were eligible for the Covid Summer Food Fund, which was introduced following a campaign by Manchester United and England football star Marcus Rashford.

When the Warwick study was published, Sunak has said it would be too “simplistic” to connect any one scheme to a rise in cases, insisting other European nations were “following similar paths” of infections.

The Treasury said its own analysis suggests take-up of the scheme “does not correlate with incidence of Covid regionally”.