Chancellor asked to step in with support if restrictions continue

10-May-2021 - Last updated on 10-May-2021 at 10:11 GMT

Sector support: UKHospitality has called on the Chancellor to ensure protections are in place for hospitality if restrictions must continue for longer than expected (image: Pippa Fowles / No 10 Downing Street via Flickr)

UKHospitality (UKH) boss Kate Nicholls has written to the Chancellor asking for more financial support to help pubs rebuild as pandemic restrictions are eased.

In a letter to Chancellor of the Exchequer Rishi Sunak, Nicholls urged the introduction of further financial support to ensure the stability of the hospitality sector.

Nicholls focused on financial issues including rent debt and capital, which threatened “structural instability” for the sector if not resolved.

It was not possible under step two (outdoor trading) or step three (indoor trading with restrictions) for the vast majority of businesses to be viable, she added.

Businesses were also concerned that coronavirus measures such as social distancing and table service could continue into the summer months.

Nicholls said the Treasury must “stand ready to deliver extra support measures if there is any slippage in the roadmap that result in restrictions remaining beyond 21 June.”

Structural issues

The letter also called for a resolution to “structural issues” including the rent debt that has accrued since the start of the restrictions in March 2020.

UKH has proposed an extension of protections from enforcement and a national-level adjudication that eliminates 50% of rent debt accrued during closed period and 25% for restricted periods.

Further Government loan support for tenants and landlords may also be required to “bridge the gap in repaying outstanding rent arrears,” UKH’s letter said.

Operators have also reported being denied access to Government loan schemes by banks, leading UKH to call for current loans to be made more widely available to businesses.

Invest now

What’s more, a “more targeted loan scheme” for the sector was proposed by UKH. The scheme would be low interest and for 10 years.

Nicholls said: “With targeted intervention on rent and finance as we exit the crisis, we can secure a strong recovery. Without further action, however, we risk structural instability that threatens to waste the substantial investment made to date by Government and industry.

“Investing now in the revitalisation of hospitality will yield a substantial return on investment – in terms of economic growth, employment, levelling up, high street regeneration and Government revenues.”

The Government has issued a call for evidence on the issue of rent debt, as reported by The Morning Advertiser.

More than 330,000 jobs were at risk because of the £2.5bn debt facing the hospitality sector, according to research from UKH, which surveyed its members on the issue.

More than half of operators (52%) said they had not been given a rent extension period while almost three quarters (73%) were unable or didn’t know how to pay their rent arrears.