Moves to stop rent arrears crippling hospitality firms
Business minister Kwasi Kwarteng has said he did not want rent arrears to “cripple” hospitality firms and that the government was looking at ways to help firms manage their debts. He told the BBC that the government was aware that hospitality businesses were facing a build-up in rent arrears after many months of not being able to trade normally. He said: “The government is working very closely together – the Treasury and [the Department for Business, Energy and Industrial Strategy] – to see if we can come up with an arrangement whereby tenants and landlords can work together to make sure this rent issue doesn’t cripple business.”
At the same time, Nisha Katona, founder of Mowgli, told the BBC that the UK’s high streets are already “littered with the gravestones” of independent bars and restaurants that didn’t have backers with deep pockets or hadn’t been able to negotiate concessions from their landlords. Katona said many businesses would make little or no profit while capacity was still restricted. She said: “In order to survive, what needs to happen is that we need to trade at the levels that we were trading prior to covid. While social distancing is in place, we cannot do that. Many places will not be able to make any kind of profit while restrictions are in place.” She fears many businesses will go bankrupt in the autumn as landlords demand rent arrears and says the government should look at things like business rates and VAT rates as well as support with debts due to landlords. Kwarteng said he hoped the final lifting of restrictions, including ending the need to distance indoors, would go ahead in June, but that he couldn’t offer any “cast iron guarantees”.