U.K. Increased Covid’s Spread by Subsidizing Diners, Study Finds
The U.K.’s Eat-Out-to-Help-Out program, hailed as an economic cure for restaurants, may have substantially worsened the pandemic,
(Bloomberg) --
The U.K.’s Eat-Out-to-Help-Out program, hailed as an economic cure for its ailing restaurant industry, may have substantially worsened the pandemic, research showed.
The government spent 500 million pounds ($647 million) subsidizing the cost of restaurant meals and non-alcoholic drinks by as much as 50% in August, even after evidence had emerged that Covid-19 could easily spread in hospitality settings, a study from the University of Warwick found.
The program succeeded in filling tables and getting cash into the hands of hospitality businesses, but may be responsible for 8% to 17% of all U.K. coronavirus cases during the summer, as well as asymptomatic infections that may have helped drive an explosive second wave of the pandemic, said Thiemo Fetzer, an associate professor of economics and a visiting fellow at the London School of Economics.
“Areas with higher take-up saw both a notable increase in new Covid-19 infection clusters within a week of the scheme starting, and again a deceleration in infections within two weeks of the program ending,” Fetzer wrote in the 52-page paper, released Thursday.
The program began on Aug. 3 and ended on Aug. 31, two months before Prime Minister Boris Johnson became Europe’s latest leader to retreat from a no-lockdown pledge. On Saturday, he ordered a one-month stay-at-home policy for all of England beginning Nov. 5 to curb surging Covid-19 cases.
Restaurant visits more than doubled in the last week of the program, compared with the same period a year earlier, encouraged by a discount of as much as 10 pounds per person to eat out in tens of thousands of participating restaurants on Mondays, Tuesdays and Wednesdays, when patronage typically ebbs. Subsidies on almost 100 million meals valued at about 1 billion pounds were claimed during the program’s four-week period, preliminary data show. Fetzer estimated the cost to taxpayers at about 500 million pounds.
He found areas that had more participating restaurants saw a notable increase in the emergence of clusters of Covid-19 cases about a week after the program started, with patterns of movement corroborated by Google mobility data and aggregate data from restaurant booking sites. Wet weather appeared to deter diners, corresponding with a reduction in Covid-19 incidence.
The U.K. started to see an uptick in Covid-19 cases at the same time as the program was operating, said Toby Phillips, a public policy researcher at the University of Oxford.
“This overwhelmed testing capacity and caused some regions to reimpose restrictions,” Phillips said in an article for The Conversation in September. “It’s impossible to know what caused this. People were also coming back from summer holidays and spending more time with friends.”
Still, the rapid acceleration in the proportion of detected positive cases at the start of September “is consistent with cases where infection occurred in mid-August,” he said. “It’s certainly worth considering the effect of a 10-pound discount at the pub. And the effect of concentrating people’s outings on just three days of the week.”
©2020 Bloomberg L.P.