Ain’t nothing going on but the rent

Okay, that’s not strictly true. The industry has only partially reopened, social distancing remains in place delivering a widespread reduction in covers, the industry is under close government scrutiny to ensure it’s compliant with the safety guidelines, EOHO has stimulated the industry (and debate!) and the invaluable furlough scheme continues to ebb away.

Yesterday, as part of a series of feisty exchanges in the Commons, Boris Johnson reaffirmed furlough was still on course to fade away completely.

It had cost £40bn and supported 11 million people, he said, but furloughing employees keeps them in a state of “suspended animation, we want to get people back to work… not languishing out of work.”

France and Germany had extended their similar schemes, said one MP, while another encouraged a targeted extension for sectors including hospitality. But the PM reemphasised his belief that the furlough scheme is “just not the answer” in terms of getting people back to work.

That thousands of jobs have simply ceased to exist while this situation continues, so there isn’t an option for furloughed employees to ‘return to work’ because their jobs aren’t there anymore, doesn’t look like it’s going to make a difference.

And although a u-turn wouldn’t be out of character for this government, and despite there being no explicit confirmation that the JRS would not be extended, any extension, targeted or otherwise, feels extremely unlikely.

The PM also floated the idea of some kind of replacement in terms of a support package, but there was no substance in terms of any details relating to what that might be or how it would work at this stage.

But as furlough fades, the issue of rent increases – literally as rent arrears grow and the ultimate bill rises.

The rent moratorium is also up for extension – it’s currently set to expire at the end of September – and although in a sense another extension simply shelves the underlying issue rather than resolving it, it may offer more time for the government to intervene in a tangible sense rather than an advisory one. Likewise it offers those embroiled in difficult negotiations more time to come to an agreement. 

Given its previous willingness to do so, and the fact it doesn’t put any further strain on government coffers, it’s likely the rent moratorium will be extended until the new year. Although if a resolution isn’t found between now and then, the industry, landlords and the government are going to wake up on 1 January with an even bigger headache than usual.