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Restaurateurs call for 'furlough-style' scheme to cover rents

13 October 2020 by
Restaurateurs call for 'furlough-style' scheme to cover rents

Two Liverpool restaurateurs are calling for the introduction of a ‘furlough-style' scheme for rents as businesses face mounting debts.

Operators are currently protected from eviction from commercial premises until the end of 2020 after the government extended its moratorium on landlords taking action over unpaid rent.

But there are concerns about the future, with tightening lockdown restrictions in areas of the north of England making it even harder for businesses to cover costs.

Peter Kinsella, owner of the Lunya and Lunyalita restaurants in Liverpool, told The Caterer: "We've not been paying rent since March. With new [Tier 3] restrictions in place, which it's been hinted could last for six months, it looks like we'll go a full 12 months with non payment of rent.

"We will emerge from this with about £280,000 rent debt. That would threaten our viability next year if there isn't support or legislation in place which stops landlords forcing you out. I would say almost every restaurant in the country is in the same position."

He said a protective scheme was needed to help both businesses and landlords.

"We'd like to see something like a rent furlough scheme. If we and our landlords could agree [on paying] 50% outstanding rent over an agreeable time, the government could contribute another 30%.

"It's going to be in no one's interests for landlords to go under. We all need to work together for a vibrant economy."

Chef Paul Askew, who runs Liverpool's the Art School fine dining restaurant, said the issue was a "huge worry" for the hospitality industry.

He blamed the refusal of some insurance companies to pay out to cover the impact of coronavirus on operators since March for leaving many unable to pay rent and staff.

The high court ruled in September that claims should be paid out in cases where policies had pandemic or notable disease clauses, although insurers are appealing the judgement.

"The real villains in all this are the insurance companies," said Askew. "If they'd paid out we could have paid our rent and staff and wouldn't be chasing the government for funding. This is a massive problem.

"Some landlords have been very understanding but there is still a high proportion who believe you have to pay rent regardless."

Trade body UKHospitality has called for the rental moratorium to be extended until the end of March 2021 to allow more time to find solutions.

Askew said: "If we come out of the moratorium in the New Year and landlords say we have to pay every penny [of backdated rent] there's going to be absolute carnage in our industry because so many people won't be able to do so.

"In the absence of individually negotiated deals we need a set of rules across the nation, assisting with a furlough-type scheme or some kind of bailout.

"The government did that for the banks in 2008 and maybe they'll have to do that with insurance companies when they finally pay out.

"The hospitality industry is in huge difficulty and there will be lots of empty buildings on the high street if they don't sort it out."

Photo: Shutterstock

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