Did UK's Subsidy Scheme to Help Restaurant Sector Lead to More COVID-19 Cases? 

Priscilla Lynch 

October 28, 2021

The Government’s ‘eat-out-to-help-out’ (EOHO) scheme, which encouraged people to eat in restaurants following UK's first COVID-19 wave in 2020, helped accelerate the nation's second COVID-19 wave, suggests new research published in  The Economic Journal.

The EOHO scheme directly subsidised the cost of meals and non-alcoholic drinks by up to 50% in participating restaurants across the UK for meals served on all Mondays to Wednesdays from 3 August to 31 August 2020. Government statistics suggest that at least 59,981 businesses registered for the scheme.

The EOHO discount was capped at a maximum of £10 per person, but there was no limit on how often people could benefit. Aggregate data suggest that the government subsidised 160 million meals, costing the taxpayer £849 million. Restaurant visits increased drastically from Monday to Wednesday, days which usually see less traffic.

These data/statistical analyses found that the scheme had a notable temporary impact on restaurant visits when comparing year-on-year changes from the booking service OpenTable. During days that the scheme was available, restaurant visits increased between 10 and 200%.

Middle Layer Super Output Areas (MSOAs), which have on average 8288 residents and at least 5000 residents as per the 2011 census, with higher participation in the EOHO scheme saw both a notable increase in new COVID-19 infection clusters within a week of the scheme starting and a deceleration in infections within two weeks of it ending.

In the week prior to the launch of the EOHO scheme, just 7% of English MSOAs reported a new local COVID-19 outbreak with more than two new cases; only four weeks later, as the scheme ended, 30.6% of MSOAs reported local outbreaks.

Areas that had notable rainfall during the prime lunch and dinner hours on days the scheme was active, making customers less likely to visit restaurants and take advantage of the subsidised meals, had a lower COVID-19 infection rate.

The empirical estimates suggest that the EOHO scheme may have been responsible for around 11% of all newly detected COVID-19 clusters emerging during August and into early September 2020 in the UK.

“This highlights the fact that fiscal responses aimed to cushion the economic fallout from COVID-19 have to pay particular attention to epidemiological risks as, otherwise, they may significantly worsen the pandemic progression and undermine any short-term economic benefits,” the study concluded.

This article originally appeared on Univadis, part of the Medscape Professional Network.

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