The government’s proposed code of practice on rent negotiations is not intended to be an end in itself, but a vehicle towards further action to address the issue, UK Hospitality CEO Kate Nicholls has said.

Addressing attendees at MCA’s The Conversation, Nicholls explained that the code, which is due to be published by the end of this week, is designed as a staging post towards the deliverance of a solution between landlords and tenants.

“The code is designed as a vehicle to deliver the timeout, a vehicle to deliver that pause while rent is not being not being paid in full,” she said. “And as a further nudge from the government to encourage both sides to come around the table and agree on how that rent will be paid in the future.”

Currently, without changes in either legislation or the chancellor’s financial compensation package, the government “isn’t in a position to deliver no rent while businesses are closed because the law continues to apply,” but, she added, that only serves as an incentive to lobby the government further.

“We need to continue to put pressure on the treasury to provide a financial incentive to oil the wheels for that negotiation to take place,” she said.

And earlier this week the trade body did exactly that.

In a letter to chancellor Rishi Sunak and secretaries of state at BEIS, DCIMS and HCLG, Nicholls called on the government to provide fiscal support in the form of tax credits, property bounce back bonds and a furloughed space grant scheme to provide incentives for affected parties overcome the rent stalemate.

“Essentially our view is that if a business is closed through no fault of their own, they should not be accruing any rental debt,” the letter read, suggesting it will be down to government carry at least some of the payment burden.

Also speaking at the event, Sun Capital Partners founder Hugh Osmond agreed with Nicholls, adding that “to reach an agreement between landlords and tenants all across the land, some oil for the wheels is essential.”

For Osmond, who’s position as both operator and landlord places him on both sides of the dispute, a rent deferral is not enough to solve the issue.

“The reality is that where the Government has stopped your sales, effectively it’s like turning off the water going into a hose,” he said. “And that water usually goes into paying everybody down the track, but they’ve just turned off the tap.”

“Both sides may need to share the pain in some way, but it really needs the person that stopped the tap to make a contribution.”

Loungers chairman Alex Reilley was less optimistic on the matter.

Despite the calls from UK Hospitality and operators across the sector, according to Reilley the likelihood of any meaningful government intervention on the rent issue, financial or otherwise, is low.

Referring to the proposed code of practice as a “token gesture,” Reilley explained that his feeling was that the opportunity to get a favourable agreement for operators on rent “has unfortunately passed.”

“It’s an argument that I’m sure will rage for a number of months but I don’t think what the government is doing at the moment suggests there is anything coming down the track,” he said.

“They’ve looked at this as a commercial dispute in which they can’t intervene in a meaningful or legislative way.

“Ultimately, they’re just putting together some guidelines which a lot of us were already working on a basis of anyway. To me it feels incredibly token.”

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