CHANCELLOR Rishi Sunak has offered a “lifeline” to restaurants and leisure businesses by slashing VAT and offering cash discounts to “eat out and help out” as the UK emerges from the Covid-19 crisis.

Mr Sunak announced a 50 per cent discount up to a maximum of £10 per head for everyone, including children, at restaurants, cafes and pubs from Mondays to Wednesdays in August.

He told the Commons VAT on the hospitality sector will be slashed from 20 per cent to five per cent until next January.

Garry Lowen, owner of Gleneagles guest house in Southend, said the cut in VAT will offer a “lifeline” to keep his business afloat and will act as an incentive for people to stay.

He added: “Coupled with the discount on food and the £1000 job retention bonus this will all go a long way to boosting our business and keeping jobs.”

Antony Tomassi, owner of Tomassi’s in Southend High Street, added: “The drop in VAT is fantastic and it will help us pass the reductions onto our customers and our pricing will be changed to reflect that.

“I think we will see an increase in the number of customers and bookings because of these measures.

“I think the VAT reductions will also mean more people can afford to eat out.”

Steve Haslam, managing director of TLC Inns which runs 11 restaurants including Burger Brats in Basildon said: “This is very welcome in the hospitality industry and I think the VAT cut will especially encourage more people out to spend.

“However, I think it does fall short in helping firms that have suffered massive drops in their income. I do think it will help stimulate the market but it doesn’t fill the shortfall from the last few months.”

Matt Chambers, manager at Basildon’s Festival Leisure Park said: “Over the past few weeks we have seen many of our operators open for delivery and click-and-collect service and as of last Saturday several venues have opened their doors with more including Pizza Express this week.

“They have been popular. However this is only the start of the recovery and incentives such as the 50 per cent discount and 15 per cent VAT relief will provide additional customers to venues as they re-build their businesses.”

James Duddridge, MP for Rochford and Southend East, said: “As we now get back to a degree of normality, it is right we turn our attention to creating and protecting jobs, and I very much welcome the Chancellor’s announcement which will make a big difference to our businesses as they begin to re-open their doors.”