Save our restaurants: The Standard’s five-point rescue plan that the Government must follow to keep London alive

Soul of the city: an empty Sola, in Soho
Sola
Jim Armitage @ArmitageJim5 February 2021

London rightly boasts of having the best restaurant scene in the world. After last month’s Michelin awards, no fewer than five have three Michelin stars, with an unrivalled variety of international cuisines. Yet the industry is on its knees. Having endured the first lockdown, restaurants just about got back on their feet when November’s closures struck. Then they were smashed by the third, and worst, round of closures in December.

The Government started off supporting them well with the furlough scheme, reductions in their tax bills and loans. But now, the support is running out of puff like a deflated soufflé, leaving London’s restaurants facing financial ruin and terrifying debts.

Last week, we reported how Britain’s chefs and restaurant owners were being left high and dry by government, unlike those in Europe and the US. D&D London, which owns Quaglino’s, Coq d’Argent and Bluebird, told us of how its haunts abroad had been far better looked after. Bluebird in New York —smaller than its Chelsea flagship — received $1 million. Its Paris restaurant, Alcazar, €300,000. In the UK, the Bluebird, a huge business on King’s Road, got a grant of just £9,000.

Official figures say 261,000 jobs have been lost already across the UK in restaurants and hotels since Covid-19 hit. Without some serious support, between 30 and 40 per cent of venues in London are likely to have to close for good. The capital’s restaurants employed 190,000 people before the pandemic, according to the Office for National Statistics. Each of those employees have bills to pay, many have families to support. But that’s not the only reason restaurants need to be saved.

Along with our theatres and music venues, they are what make our city the world capital of fun. Without them, people will spend less time, and money, here. Tourists will head to Paris or New York instead. That’s why those cities have been so careful to support their restaurants. They understand that more visitors means more spending in shops, tourist attractions and hotels.

This newspaper believes the Government must step up now and help restaurants survive this once in a century pandemic. Here is how.

Taxes

Every business owner gripes about tax. But restaurant owners, who’ve had their premises forcibly closed for most of the past year, have good reason. The Chancellor gave them a reduction on VAT on food and a holiday from paying business rates. But those reliefs all come to an end in the coming weeks. Even if lockdown is relaxed by then, they’ll create a huge drag on depleted resources. They must be extended for at least the rest of the year while firms rebuild their cash reserves. Rishi Sunak is likely to announce some of these measures in his March Budget, but why wait when restaurant owners need clarity now?

Furlough

The furlough scheme has been brilliant, but, again, it ends in a few weeks. The Chancellor must extend it. Furthermore, it only covers pay up to 80 per cent and doesn’t cover tips, which can make up as much as half of wages. Employers are often topping pay up, and they still have to fund PAYE and pension contributions. Of course, the Treasury is trying to reduce spending, but smaller firms could really do with having those burdens eased. Extend the scheme and consider offering some relief on PAYE.

This newspaper believes the Government must step up now and help restaurants survive

Rents

Another excellent measure brought in by the Chancellor was to prevent landlords demanding rents from businesses which had been forced to close. But this also comes to an end soon, meaning restaurants will face an avalanche of back payments. The moratorium must be extended, but, as Victor Garvey, Michelin-starred chef at Sola and board member of the Soho Business Alliance, says: “Many landlords are struggling too. In many cases, they’ll have bought a commercial property with a mortgage, hoping that the rent will pay their pension. Now, they’ve had no money coming in for months and their banks are breathing down their necks for interest.” The SBA is calling for a moratorium on banks being allowed to foreclose on landlords. This should be done.

Government loan schemes

The Government should have offered grants to struggling businesses, rather than loans which will weigh them down for years. It is too late to launch a grant scheme now, and there is too little Treasury money to spare. But changes are needed to the loan scheme, which was not set up expecting us still to be stuck with Covid-19 long into 2021. The CBILS scheme was offered interest free for the first year, but that is soon coming to an end, even though restaurants are still closed. Extend the interest free period by another year.

Eat Out to Help Out II

The first scheme was a huge boost, both for restaurants and their customers (although some blame the last one for spreading coronavirus). Repeat it again for a limited period — once it is safe to do so — and make sure councils are generous in allowing outdoor space. For millions of Londoners, the prospect of a delicious meal in beautiful surroundings is keeping us going. We have to keep our restaurants alive.

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