Restaurants Have Their Final Stay of Execution on Rent

The government has confirmed that it will extend a ban on the eviction of commercial tenants until the end of June 2021, meaning that restaurants still embroiled in battles over rent debt will be given further breathing space to negotiate their way out of those disputes. Or not. The end date is six weeks after restaurants are permitted to reopen their dining rooms.

In December, when the eviction ban — the so-called lease forfeiture moratorium — was last extended (then for the third time), the government said it would be the last. It’s not inconceivable that this government will not be asked any searching questions about yet another u-turn, but if it was it would likely say that it did not appreciate the full extent of the Kent COVID-19 variant in December 2020 (despite scientists having identified it in September.)

But for restaurants and their representatives, who as recently as last week voiced their ongoing concerns about the need for the government to do something on rent while reacting to reopening plans and the extension of financial support — the extension of a ban on evictions represents the bare minimum.

That’s because the moratorium is not a solution to the problem of rent debt. It is a mechanism designed, in theory, to allow restaurants and landlords to find a solution together. But in practice, in many cases, it does little more than push an unsolved problem down the road for another day.

Or, in the words of Big Mamma restaurant group co-owner Victor Lugger: “Hearing the news it feels like the guy falling from the top of a building and at every floor thinking: so far it is all right,” he told Eater. “It makes a difference for now, but we have to address the problem at some point.”

Business secretary Kwasi Kwarteng said today that the government supported commercial landlords and tenants attempting to agree their own arrangements for paying or writing off rent debts by 30 June. In other words, a continuation of its failed strategy of non-intervention.

“This is supported by the code of conduct published by the government last year, setting out best practice for these negotiations,” Kwarteng said. “But, if these discussions do not happen and there remains a significant risk to jobs, the government is also prepared to take further steps.”

This is key. It looks increasingly likely that the government will have to take further steps. What they are, though, remains the £3 billion question — the amount of debt thought to have piled up in the hospitality industry over the last 12 months.

“We are, therefore, launching a call for evidence on commercial rents to help monitor the overall progress of negotiations between tenants and landlords,” Kwarteng added. “The call for evidence will also set out potential steps that government could take after 30 June, ranging from a phased withdrawal of current protections to legislative options targeted at those businesses most impacted by covid-19. We would welcome a broad range of feedback to this call for evidence.”

This “call for evidence” may come as a slight surprise to those, such as trade body U.K. Hospitality, which have been proposing a variety of measures — based on evidence from businesses — to be introduced since last summer. It has called for grants, the application of turnover rent agreements, and a furlough-like arrangement applied to rent, where the government subsidises a given tenant’s outstanding debt. On rent, as on nearly everything else, it has been repeatedly ignored.

Its chief executive Kate Nicholls said the government had no choice but to extend the ban on evictions, and added that it “is even more encouraging to see the government issuing a call for evidence on the possibility of additional measures to solve the rent crisis.”

“Rent debt has spiralled to unmanageable levels for too many businesses through no fault of their own. We have reached an impasse that threatens the survival of many businesses right at the moment they are looking to reopen and rebuild,” Nicholls said.

• Government Will Extend Protection Against Eviction for Restaurants [ELDN]
• Government Must Recognise Rent Debt Is a Massive Problem for Restaurants [ELDN]
• Coronavirus Vaccines Could Be Too Late to Save Restaurants [ELDN]