Pressure Mounts On Government To Extend Commercial Eviction Ban To Save Businesses Ravaged By The Pandemic
Pressure on the government to extend their commercial eviction ban is ramping up amid fears employers hoping to re-open on June 21 will face almost immediate orders to quit their premises over unpaid rent.
Chair of the business select committee Darren Jones MP said businesses across the country are in significant arrears because of the coronavirus pandemic and need urgent reassurance from the government that they are going to get the support they need to keep trading.
The Business Select Committee has repeatedly warned ministers of the impending difficulties faced by many businesses when the commercial eviction ban ends on June 30.
Jones, a Labour MP, said: "Ministers have refused to help find a solution to this very significant problem – leaving many small businesses helpless compared to big national brands.
“Given the impending deadline and the lack of a solution, I would support a further extension to the commercial eviction ban until Ministers step up and get involved."
The Coronavirus Act 2020 introduced a moratorium on the ability of commercial landlords to evict tenants if they had not been able to pay their rent in the pandemic. It was extended to June, beyond the original exporation date in March.
The Ministry of Housing, Communities and Local Government is expected to make an announcement in the next few weeks on what will happen when the ban legally ends.
Their “call for evidence” event ran in April and is supposed to be feeding into government attempts to draw up arrangements between tenants and landlords from July onwards.
However businesses are worried that with just under a month until this safety net runs out, they have no firm idea what financial protection they will have. Furthermore, for some premises like nightclubs, that are due to open on June 21, they would only have nine days of trade to prove to landlords their businesses are still viable.
The Liberal Democrats are also calling for the commercial rent moratorium to stay in place for now.
Spokesperson for business, Sarah Olney said: "Small businesses have had an incredibly tough year. Thousands of them are struggling with unmanageable debt and are teetering on the brink.
"The series of chaotic, last-minute announcements and short-term sticking plasters from the Treasury haven't been nearly enough.
"Instead of ending the eviction ban, the Government should be providing more support so small businesses can survive, grow and create jobs.”
The party is calling for a rent relief scheme for hospitality venues, similar to one used in Germany, which would allow businesses with up to 10 employees claim up to 80% of their total rent costs for six months, up to £5,000.
The mounting concern from politicians comes after PoliticsHome reported on the pleas from nightclub owners and night-time economy workers to extend the eviction ban for non-rent payment, or risk the sector going bust.
Michael Kill, chief executive of the Night Time Industries Association said the UK's largest nightclub operator Deltic Group, which was bought out by Scandinavian firm Rekom UK, was facing a rental bill of £1m a month and £600,000 in costs. It received £156k in support from the government outside of furlough.
“If you extrapolate that up and down depending on the business, that shows the level of support and disproportionate position undertaken by many of these clubs across the country,” he said.
They are desperate for the government to stick to its roadmap and allow late night venues to reopen on June 21, but have said this will need to be coupled with more financial support after 14 months of being shut down.
Amy Lamé, the American-British performer and broadcaster who works as the Mayor of London’s Night Czar, told PoliticsHome said she wants to see venues open in a few weeks time but if there is going to be a delay to ending restrictions, then businesses need fair warning.
She said: “Our night time economy will be central to our social and economic recovery from the pandemic, but these businesses have to be given time to allow them to plan with certainty.
“If the government is going to delay the easing of restrictions, businesses must be given enough advance notice and the financial support they need to ensure they can open their doors again when the time is right.”
Further grant funding and furlough could be used to support those businesses most at risk, she suggested.
Government sources say no final decision has been made on whether to extend the evictions moratorium as they are still considering the evidence gathered in April, however a decision is expected in the next few weeks.
An MHCLG spokesperson said: “The Government is considering responses to a Call for Evidence on commercial rents and how to best to support businesses; an announcement on next steps will be made in due course.”
The government is understood to be weighing up a phased withdrawal of current protections to legal options to help those most impacted by Covid-19.
A voluntary Code of Practice has also been developed by government with leaders from the retail, hospitality and property sectors representing landlords and tenants.
It encourages tenants to continue to pay their rent in full if they are in a position to do so and advises that others should pay what they can. It also recommends landlords provide support to businesses if they are able to do so.