UK Government’s Intervention Needed to Prevent Massive Retailers’ Closure Due to Rental Debts

England Eases Corona Virus Restrictions

Earlier in the month, Boris Johnson, the Prime Minister of the UK further reduced the COVID-19 restrictions in the UK. He has permitted the re-opening of non-essential retail shops such as beauty and fashion shops, exercise and gym centers, bars and restaurants, etc.

Suspension of Legal Debt Collection

During the pandemic, many retailers in the UK were forced to close their shops. This lasted up to 15 months and in so doing, they kept incurring shops and warehouse rents. To this effect, the government on June 30 2020 had issued a suspension of confrontational and legal debt collection which is to run till July 1st, 2021.

Potential Problems for Retail Shops

The end of the suspension for legal debt collection is on July 1st, 2021. This means that the businesses and retail stores will be subject to intensive actions to pay up the rent due and debts. According to the British Retail Consortium, if nothing is done by the government, this will eventually lead to a massive closure of retails shops as some shops already are close to being empty.

It is estimated from surveys carried out by the association that at least 75% of the retail sellers will be subject to legal actions when the moratorium expires on July 1st, 2021.

Effect on the Economy

Helen Dickinson, the CEO of the British Retail Consortium, has appealed to the government to examine these debts incurred during the lockdown. She implores the government to reconsider postponing the deadline of the debts’ moratorium till December to save retail sellers from closing up totally and give them more leverage to pay up the debts. She says a lack of these measures will significantly impact the economy negatively as a whole.

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