Yahoo Finance No plans for Eat Out to Help Out II, says Rishi Sunak
UK chancellor Rishi Sunak has signalled he does not intend to resurrect his controversial meal subsidy scheme Eat Out to Help Out.
Sunak told MPs on Thursday he was not considering any new subsidies to get consumers spending again once Britain's economy began to unlock.
“We have higher confidence that there will be consumption-led recovery even without intervention than we did before," Sunak told the Treasury Select Committee.
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MPs on the committee quizzed Sunak about his government's annual budget, which the chancellor delivered to parliament last week. Sunak announced a business investment "super deduction" meant to spur business spending as the economy reopens. He called it the "biggest business tax cut in modern British history".
Sunak was asked by MPs whether he had considered introducing a similar scheme to drive consumer spending. Last summer the Treasury ran Eat Out to Help Out, which saw the government pay half of people's meal bills when they ate out during the week.
“What we saw last time around… there was an enormous worry that actually when things reopened last year that people wouldn’t have the confidence to spend even though they had the income to," Sunak said. "Consumer confidence numbers back then were very bad. There was more an argument to being worried about that then.
"This time around, both in the UK and internationally we’ve seen you do tend to get quite a strong consumption recovery automatically."
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The chancellor said there was "pent up desire" that would likely translate into spending in pubs, bars, restaurants, and shops once restrictions begin to lift.
“Investment is different," Sunak said. "Investment has really suffered. Unblocking that is probably something where policy can really help."
The government spent £849m ($1.2bn) subsidising 160m meals last year through the Eat Out to Help Out scheme. The subsidy programme proved controversial, with studies suggesting it contributed to a spike in COVID-19 infections.
"Any economic gains from the scheme may have come at the cost of more infections," a study published last month by the London School of Economics said.
