UK Hospitality has called on Government to provide fiscal support to the hospitality sector in order to overcome the ongoing rent stalemate.

In a letter to the Chancellor and secretaries of state at BEIS, DCIMS and HCLG, the trade body warned that without some kind of financial stimulus to resolve the rent issue, business failures and job losses will be inevitable.

The letter sets out a series of measures to resolve the stand-off between landlords and tenants, including the possible introduction of tax credits to incentivise rent waivers, property bounce back bonds to cover lost revenue form the closure period, and the introduction of a furloughed space grant scheme.

UK Hospitality estimates that the ‘lost quarter’ of trade will be equivalent to rental payments of about £650m, taking into account part trading, and with the impeding rent date of 24 June, it said that “very few” hospitality businesses would be able to make the payment.

“Essentially our view is that if a business is closed through no fault of their own, they should not be accruing any rental debt; and while trading well below general levels of business, there should be a vastly reduced rent, most likely linked to turnover – ‘no revenue, no rent: part revenue, part rent’,” the letter said.

“The stalemate on rent, with the June quarterly rent day fast approaching, is the biggest threat to the recovery and future of hospitality,” added UK Hospitality CEO Kate Nicholls.

“We have lost an entire quarter’s revenues to COVID-19 and the prospects for trading from July to September look severely limited. Social distancing measures and expectations of low consumer confidence are going to see businesses trading at a fraction of capacity.

“The current moratorium on forfeiture and enforcement action must extended until the end of the year, to allow Government’s proposed Code of Practice to support negotiations.

“The reality is, though, we are at a point where the Government has to step in and act decisively, otherwise businesses will go under, jobs will be lost, and rent will never get paid.

“Fiscal support is now the only option if we want to avoid business failures.”