Deliveroo CEO and founder Will Shu (pictured), alongside major UK restaurant partners, including Burger King and Itsu, have written to the Prime Minister to warn of the severe impact the upcoming end to the moratorium on commercial evictions could have on the UK’s restaurants industry unless urgent action is taken by the Government.
The signatories of the letter recognise the critical role the moratorium on commercial evictions, alongside other Government support measures, have played in allowing restaurants to get back on their feet and re-open, helping to protect jobs and encourage people back to the high street.
However, with the moratorium due to end on 30th September, the letter warns that 'failure to extend and/or modify [it] could severely hamper the restaurant sector’s recovery and lead to many permanent restaurant closures'.
Without further support from the Government, the letter argues, restaurants could face demands from landlords for immediate rent payments accrued over the past few months, or risk eviction proceedings if they fail to pay. For the vast majority of restaurants this is an unmanageable challenge, and many may be forced to close their doors.
To underline this, the letter states, 'Given the far reaching challenges facing the sector, it is unlikely that new ventures will open to replace the vacancies left by the closure of many restaurants across the country, meaning that resulting in job losses will be difficult to replace'.
Deliveroo and its restaurant partners have put forward four practical steps that would help prevent closures and subsequent job losses and allow those restaurants who have reopened to continue trading in a sustainable way:
> To restrict the ability of landlords to demand in full ‘back rent’ when the moratorium ends. Instead, the Government should ensure that landlords can demand a maximum of 10% of any outstanding arrears in October, and high street businesses are given the ability to gradually pay back arrears over the next 12 months.
> To discourage evictions through changes to Empty Properties Relief. Evictions risk long term vacancies on our high streets. Instead, the Government could remove Empty Property Relief from Business Rates for any premises where eviction proceedings were initiated due to rent arrears accrued during the moratorium. This change would help rebalance negotiations in CVA cases.
> To extend the moratorium for businesses in city centres. Many restaurants and cafes in city centres have not been able to return to profitability, with some businesses seeing revenues as low as 25% of pre-COVID-19 levels. The Government could extend the moratorium specifically for city centre areas.
> To create a temporary moratorium covering local lockdowns. Local lockdowns which require restaurants to close for dine-in services affect their ability to generate the revenues needed to pay rent and staff. In areas where local lockdown restrictions mean restaurants are not allowed to serve dine-in customers, the Government could state that there will be an automatic moratorium on commercial evictions for at least two months.
Commenting, Deliveroo CEO and Founder Will Shu, said, “The restaurant sector has worked so hard to get back on its feet over recent months. This all risks being undone unless further action is taken on rents.
'We urge the Government to consider these proposals, which will help protect the sector’s tentative recovery and ensure that our amazing restaurants can have a bright future.”