Ban on commercial evictions to be extended until March 2022
The government is to extend the ban on commercial evictions introduced during the pandemic until March 2022, the Treasury has confirmed.
Chief secretary to the Treasury Stephen Barclay said the moratorium for business tenants will not expire at the end of this month as planned and will instead continue until 25 March 2022 – two years after it was introduced.
Restrictions on landlords using laws permitting them to recover rent arrears by selling a tenant’s goods will also be continued.
Many businesses have warned they face huge debts after having to operate at limited capacity
It comes two days after Boris Johnson announced the delay of easing lockdown restrictions by four weeks, with the new date for the final step of the government’s roadmap set for 19 July.
The PM described the July date as “terminus”, with most of the remaining restrictions set to be removed then.
Making a statement on the economy in the Commons on Wednesday, Mr Barclay said he believes the extension of the policy “strikes the right balance between protecting landlords and supporting those businesses that are most in need”.
“We will introduce legislation in this parliamentary session to establish a backstop so that, where commercial negotiations between tenants and landlords are not successful, tenants and landlords go into binding arbitration,” he said.
“Until that legislation is on the statute book, existing measures will remain in place including extending the current moratorium to protect commercial tenants from eviction to 25 March 2022.
Stephen Barclay said the ban on commercial evictions will be extended until 25 March 2022
“To be clear, all tenants should start to pay rent again in accordance with the terms of their lease or as otherwise agreed with their landlords – as soon as restrictions are removed on their sector if they are not already doing so.
“We believe this strikes the right balance between protecting landlords and supporting those businesses that are most in need.”
But Shadow chancellor Rachel Reeves said other economic support schemes should also be delayed in line with the prime minister’s four-week postponement of lockdown easing.
“All the way through this pandemic we have said that the economic and the health response must go together – that means keeping support in place for as long as the public health measures demand it,” she said.
Stephen Barclay said he believes the extension is ‘the right balance’ between helping businesses and protecting landlords
“When the public health restrictions are extended, as they were by the prime minister on Monday, then the economic support should be extended to – otherwise we risk falling at the final hurdle.”
The move is likely to offer some relief to businesses who have been unable to negotiate rent deferrals with landlords and feared being evicted from their properties once the protections were due to end in two weeks’ time.
But some landlords have previously raised concerns that the moratorium has allowed some businesses to escape paying rent despite still making profits.
The government’s extension of the policy follows a call for evidence launched in the spring which looked at how best to replace or end the protections.
The Treasury announced an extension to the ban on commercial evictions on Wednesday
Pressed on the matter earlier on Tuesday, the prime minister’s official spokesperson said: “We are considering responses to a recent call for evidence on the next steps with commercial rent and we will set out response shortly.”
The moratorium on commercial evictions was first introduced in April 2020 to help struggling businesses through the pandemic and was later extended until September of last year.
The policy was then extended further, but had been due to end at the end of June.
Hospitality and retail firms have previously warned ministers that without a further extension to the moratorium, they will face huge and unrecoverable levels of debt.
Following the PM’s announcement of the delay of lockdown easing on Monday, Tony Danker, director-general of the CBI, said: “We must acknowledge the pain felt by businesses in hospitality, leisure and live events.
PM: Delay will save ‘thousands of lives’
“At best they’re operating with reduced capacity hitting revenues, and at worst, some aren’t open at all.
“Continuing restrictions means the government must urgently revisit the support available.
“That starts with holding back on the tapering of business rates relief and extending the commercial rent moratorium for those sectors most impacted.”
Claire Walker, co-executive director of the British Chambers of Commerce (BCC), added: “It would be extraordinary if we saw government retracting support to businesses now.”
Dr Roger Barker, Institute of Directors director of policy, said the extension will be “welcomed” but called on the Treasury to “go further”.
“This is only one element of the cliff edge that we have been calling on government to address. At the end of this month businesses will still face the tapering off of furlough and business rates relief, and the suspension of wrongful trading liability,” Dr Roger said.
“During most of the pandemic, government has followed the principle that business support measures must run in parallel with public health restrictions. The prudent move would be to commence the tapering down process on the other side of lockdown, after and not before 19 July.
“The government must hold its nerve and push out its business support measures until the job is properly done.”
Peter Bell, chief executive at The Commercial Tenants Association added: “Legislation to seek binding arbitration over rent arrears is a watershed moment and will ensure our economy, our jobs and our livelihoods are not massacred by a sudden end to the rent moratoria.
“This announcement is a welcome indication that the government is listening to more than the rhetoric of large influential landlords. In a gesture which shows that it is truly building back better, it has effectively preserved the DNA of our economy: our businesses, large and small.”