Chancellor slammed for 'out of touch' rent remarks

Sunak said he believed a “typical” pub would pay up to £20,000 in annual rent on a talkshow yesterday (Sunday 28 February).

Trade body UKHospitality (UKH) said these figures did not reflect operators' realities and put the average rent across the hospitality sector between £30,000 and £50,000. A significant proportion of businesses faced rents north of £100,000, UKH chief executive Kate Nicholls said.

Not sure - ave rent across sector £30-50k but significant proportion well above that and north of £100k. Sector rent debt from last year of closure is £2bn

— Kate Nicholls (@UKHospKate) February 28, 2021

Speaking on the BBC’s Andrew Marr Show​ yesterday, Sunak was asked to respond to claims that the latest lockdown grants for pubs ​were “meagre”. 

He said: “Well if you think about a typical restaurant or pub, they would have rent on an average year of somewhere between £14,000 to £20,000 – I mean it will vary substantially. 

“So grants of up to £18,000 to help you reopen over the next few weeks and months should be put alongside that, together with furlough for example, we have taken care of the two big costs over the past year that many of these businesses had.”

Data from UKHospitality shows average rents up at £35,000 with one in five having rent over £50,000.

Nicholls said: “The Chancellor appears to be using the median figure for rents, which effectively bypasses large variations and ignores higher rents at the top of the scale.

"We hope the Chancellor understands that there are businesses incurring serious costs all the while they are forcibly closed and will still be incurring them while they are operating under severe restrictions."

Out of touch

Mark Holden operates three sites with St Austell Brewery in Cornwall and was shocked by the Chancellor’s comments.

“It demonstrates how out of touch the Government have become,” he told The Morning Advertiser​. “Each of our sites are between £53,000 to £70,000 and the majority of pubs rents, particularly leased and tenanted models, are over where the Chancellor thinks they are."

Holden said he was concerned Government departments were not paying attention to information gathered by consultations with the sector.

Sunak is to outline support measures for businesses at the Budget on Wednesday 3 March, with the trade calling for extensions to existing policies.​

Corrine Cook, licensee of The Red Lion, Brightwell-cum-Sotwell, was another operator left reeling from the remarks.

She said: “In a nutshell, where has he got his numbers from? From my tweet alone yesterday, lots of people (north and south) have all come back with higher rents! If he’s based the grants (which we are very thankful for) on these numbers, he needs to look again as it doesn't even touch most people’s rent let alone other costs to us.”

Licensees, including Holden and Cook, implored the Chancellor to take into consideration their high rents on social media.

Dear @RishiSunak My name is Corinne and I am the leaseholder of The Red Lion in Brightwell-cum-Sotwell and my rent is £48k pa and not the average you quoted today on #andrewmarrshow Please do more research and send the help hospitality desperately needs #nopubnorent#saveourpubs

— Corinne Cook (@Corinne78) February 28, 2021

Yes @AlexReilley1 quite.
As someone with a pubco #rent of £57K for my small suburban #pub (& no reduction at all during #Covid) I too listened to @RishiSunak on #Marr with disbelief.
Speak to us at @CampaignforPubs pls
@AndrewMarr9@BBCNews@BBCPoliticshttps://t.co/aKske778zr

— The Swan, York (Chair, Campaign for Pubs) (@theswanyork) February 28, 2021

Operators said the remarks were further proof a minister for the hospitality sector was needed.​

The Morning Advertiser​ has approached the Treasury for more details on where the Chancellor got his figures from and will update this article with a response.