SUMMER ECONOMIC UPDATE: Eat Out to Help Out – Protecting Jobs

The #EatOuttoHelpOut scheme and temporary #VAT cut to 5% encourage consumers to safely enjoy eating out, days out and to make the most of domestic travel and the summer season where the relaxation of lockdown rules allow. 

For the month of August, the Government will give you a 50% reduction, up to £10 per head, on sit-down meals and non-alcoholic drinks Monday-Wednesday. They are also reducing VAT to 5% for goods and services supplied by the tourism and hospitality sectors.

This is a £4bn catalyst benefiting over 150,000 businesses, and consumers everywhere – all helping to protect 2.4 million jobs.

To support restaurants and the people who work in them we’re saying ‘Eat Out to Help Out’.

So for the month of August we will give you a 50% reduction, up to £10 per head, on sit-down meals and non-alcoholic drinks Monday-Wednesday. #PlanForJobs pic.twitter.com/D6eznIDjqC

— Rishi Sunak (@RishiSunak) July 8, 2020

Why will this protect jobs?

• 8% of the UK’s workforce – over 2.4 million people – rely on hospitality, accommodation and attractions for employment. Of this, food and beverage services (pubs, restaurants, cafes etc) account for 1.8 million jobs.
• 80% of hospitality firms stopped trading in April and 1.4 million hospitality workers have been furloughed – the highest proportions of any sector. [ONS Business Impact of COVID-19 Survey (BICS) results, BICS Wave 3: 6 April to 19 April 2020, HMRC, Statistical Bulletin, Coronavirus Job Retention Scheme Official Statistics – 11 June 2020 Release, Resolution Foundation: the full Monty]
• Evidence from 2008 suggests that the hospitality sector could be a key contributor to the jobs recovery post-Covid. It generated 22 per cent of new jobs for unemployed people in 2010 and 2011, according to the Resolution Foundation, despite accounting for just 10 per cent of overall employment. [Getting Britain working Safely again, 2020]

Whose jobs will it protect?

Employees under 25 are over twice as likely to have worked in a sector that has been shut down than other employees [IFS – “Sector shutdowns during the coronavirus crisis: which workers are most exposed?]

Employees in the hospitality industry are more likely to not have a degree or higher qualification, putting them at greater risk of greater risk of long-term unemployment issues [ONS, Graduates in the UK Labour market, 2017]

18% of employees are from black, Asian, and minority ethnic backgrounds, which compares to 13% from all industries (ONS Annual Population Survey 2019).

It employs more women than men, 56% and 44% respectively. [ONS Labour Force Survey, June 2020, Graduates in the UK Labour market, 2017]

The sector is a significant source of regional employment, particularly in regions dependent on tourism, including Cornwall and Isles of Scilly Devon, Cumbria, North Yorkshire and Highlands and Islands. (ONS BRES, 2018)

There are around 130,000 businesses eligible for the Eat Out to Help Out scheme. This includes 85-90% of pubs that serve food, in a sector that is a major employer, supporting 1.8 million jobs disproportionately occupied by young, female, part-time workers, in the bottom half of incomes (ONS Annual Business Survey 2018; ONS Business Register and Employment Survey 2018; ONS Annual Population Survey 2019; ONS Labour Force Survey, June 2020; ONS, Graduates in the UK Labour market, 2017; ONS Annual Survey of Hours and Earnings 2019).

We’re reducing VAT to 5% for goods and services supplied by the tourism and hospitality sectors.

This is a £4bn catalyst benefiting over 150,000 businesses, and consumers everywhere – all helping to protect 2.4 million jobs. #PlanForJobs pic.twitter.com/B9LKptz4Qy

— Rishi Sunak (@RishiSunak) July 8, 2020