Rishi Sunak’s Andrew Marr Interview Frightens Reopening Restaurants
Rishi Sunak has terrified the hearts of restaurant, pub, cafe and bar workers two days before the budget announcement that will determine their future for many. Sunak told the Andrew Marr Show that the annual rent for a restaurant and pub is “anywhere between £ 14,000 and £ 20,000” when he set out the basis of the latest round of coronavirus grants announced on March 3rd.
These comments first come across the content of these grants, which are tailored around three “assessable values”: up to £ 15,000; between £ 15,000 and £ 51,000; and over £ 51,000. The need for these windows suggests that Sunak’s averages are already skewed. The operators’ response suggests that they are far from the brand. The Chancellor said:
“For a typical restaurant or pub, the average rent would be between £ 14,000 and £ 20,000. Therefore, grants of up to £ 18,000 should be added for reopening over the next few weeks and months. Together with the vacation, for example, we took care of the two high costs that many of these companies caused over the past year. ”
A 2017 benchmarking survey by the Royal Institute of Chartered Surveyors found an average London pub rent of £ 87,357. over £ 40,000 in both the Southeast and the South; and £ 25,550 in the northwest. The average rent in no region was below £ 20,000 and the national average was just under £ 38,000. Commercial rents tend to grow by 2 to 5 percent year-on-year, and pubs with lower rents often get them under the “tie” model of buying shares from a management company under “wet rent” that wipes the money out saved the tie.
Rent is both the restaurants’ biggest cost and concern. With protection from commercial evictions not yet expanded and with no tampering with the landlord / tenant relationship, the billions in rental debt that hospitality establishments accumulate become heavier over time. The government itself knows that it cannot extend the rental moratorium indefinitely. it also knows that these grants will not repair the debt. Sunak’s belief in average rent will affect any belief in average debt, so its inaccuracy could later prove even more incurable.
While restaurants, pubs, and their trade organizations have welcomed new grants, hearing such comments on the eve of a crucial budget won’t bode well for the announcement and months between now and the reopening after the lockdown. While the feeling that hospitality has become “the scapegoat” throughout the coronavirus crisis continues to be overrepresented compared to the evidence of such a scapegoat, this unexpected fatal flaw is not going to fill operators with confidence in the months to come.