Proposals being considered to ring-fence historic debt

Government officials are considering proposals to ring-fence the historic debt built up by hospitality businesses during the pandemic.

The move would allow operators to continue negotiations with their landlords rather than immediately having to divert large sums of cash to pay off bills and could mean that landlords are unable to start evicting commercial tenants, according to a report by the Telegraph.

Both Downing Street and the Treasury are understood to have been involved in meetings to discuss what support could be offered to pubs and restaurants with the government’s proposed 21 June roadmap date expected to be delayed by a month.

Last week, UKHospitality’s director of strategic affairs Tony Sophoclides, told MCA’s The Conversation that recommendations being put forward to government on how to tackle the growing issue of rent debt were broadly in line with what UKHospitality and its members have been asking for.

Sophoclides said it would be “absolutely perverse” of the government to get to the point when the sector is, hopefully, back to full trading and with so much investment having been put in, for businesses to then fail due to the lack of a solution on rent debt.

“There is a small window in which to come up with a solution to something that has proven so intractable, so I think we’d have to be looking at another moratorium extension,” he said.