Coronavirus: Pub sector faces 'bloodbath' over rents

Golden Lion, YorkImage source, Reuters

The UK pub sector could be hit by a "bloodbath" if they are not given breaks in rent payments, an industry expert has claimed.

Chief executive of UKHospitality, Kate Nicholls, called for government intervention "as a matter of urgency".

She told the Treasury Select Committee some landlords were facing legal action over not being able to pay their rent.

She also said a third of the sector would be "put at risk" if lockdown measures lasted until Christmas.

Cabinet Office Minister Michael Gove confirmed at the weekend that pubs would be among the last businesses to re-open when measures are reduced.

A spokesman for the Department for Business said they urged owners of pubs "to act in a responsible way, exercising judgement and discretion with their tenants".

The government introduced a lease forfeiture moratorium for three months as part of its response to the coronavirus to stop people being kicked out of business premises if they miss rent payments.

But Ms Nicholl said it was not taking effect "across a large swathe of the hospitality industry".

Instead, Ms Nicholls said a large number of pubs and restaurants had faced statutory demands over missed rent and were "seeing the first threats of winding up petitions being waved around".

She added: "If we don't get a resolution at a global level, if you rely on landlords and lessees to sort it out themselves, it will be a bloodbath come June when we have the next quarter rent due."

UKHospitality is calling for the lease forfeiture moratorium to be extended to allow landlords "breathing space" of up to nine months on their rent, and for a general debts moratorium to help pubs struggling in the lockdown.

'Third of sector at risk'

"It is undoubtedly the case that we are not going to be able to save every business and we are not going to be able to save every job within hospitality," said Ms Nicholls.

"If we get the intervention we are talking about... I have the optimism we will be able to return relatively quickly to almost full strength in the sector.

"But if we don't get that intervention on rent and we are forced to remain closed until Christmas, then I think you could put a third of the sector at risk."

Speaking at the select committee meeting - held as a video conference - Tory MP Anthony Browne said he feared a number of pubs would "give up" and close down because of the amount of debt they could end up with after the outbreak.

A spokesman from the business department said: "The government has put in place a far-reaching package of support for businesses, including grants and government-backed loans, as well as legislation to ensure tenants are protected from eviction if unable to pay their rent."