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Yesterday, the government announced new measures to protect tenants from aggressive debt recovery tactics during the coronavirus pandemic, but the industry is calling for further action - namely, a National Time Out on rent.
The new rules will include a ban on statutory demands - a kind of written warning from a creditor, stating that if you don't pay your debt, they may start court proceedings against you.
Milk and Honey owner and London Union co-founder Jonathan Downey applauded the news, but repeated his calls for further action, namely a National time Out, a nine month national payment pause granted to business tenants and the landlords of commercial premises. To make up the rent-free period the paymenst would be added to the end of the lease meaning they are paused not lost.
A moratorium would effectively ban landlords from using pressure tactics on tenants to force them into paying rents - and this despite a total shut down of all hospitality businesses in effect since it was ordered by government on March 20th.
Earlier this week, Jonathan Downey sent a letter to the Chancellor of the Exchequer, Rishi Sunak, calling for the #NationalTimeOut which he said could save 2 million jobs across the UK.
Yesterday UK Business secretary Alok Sharma introduced the new government measures, aimed at safeguarding retail and hospitality businesses against aggressive debt recovery actions during the coronavirus pandemic.
To this end, statutory demands and winding up petitions issued to commercial tenants will be temporarily voided, preventing landlords from putting tenants under undue pressure by using aggressive debt recovery tactics.
To stop these unfair practices, the government will temporarily ban the use of statutory demands and winding up orders where a company."
Jonathan called this "Great news" but said it is still a step away from a wider debt enforcement moratorium, which would strip landlords of eviction rights, tempering fears shared by many throughout the industry.
.. cannot pay their bills due to coronavirus to ensure they do not fall into deeper financial strain.”
— Jonathan Downey (@DowneyJD) April 23, 2020
This is disappointingly NOT a debt #EnforcementMoratorium (not yet) but it will be welcomed by those tenants who've had to deal with very aggressive landlords. 👊
As the industry's fears were confirmed in a speech by Minister for the Cabinet Office Michael Gove earlier this week, restaurants, bars, cafes, clubs and entertainement venues will likely be the very last to resume normal operations as the effects of the coronavirus outbreak simmer out - as, by definition, they are locations where the application of social distancing measures are difficult if not impossible.
Yesterday celebrity chef Yottam Ottolenghi echoed industry-wide calls for the so-called “national time-out” on rent until December to enable restaurants stay afloat until they are able to reopen.
Meanwhile UKHospitality chief executive Kate Nicholls also celebrated the news, saying the measures constitute "a very helpful and pragmatic response from the Secretary of State" which she said would give hospitality businesses "some very valuable breathing room."
Earlier this week, Kate Nicholls called the industry a “canary in the coalmine” for the British economy, stating firms would undoubtedly go bust without further help from Whitehall.
Photo credit: Greg Funnell
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National Time Out campaign leader Jonathan Downey calls for further government action to protect commercial tenants
Everything you need to know about the coronavirus and its effects on the hospitality industry
Coronavirus: Has Covid-19 killed the hospitality industry in the UK as we know it?
Coronavirus: Hospo Live keeps furloughed hospitality workers connected
Coronavirus: The Financial Conduct Authority tells insurers to pay out or explain why not
Under the Coronavirus Job Retention Scheme, tronc payments will not be included in the amount paid to furloughed workers
