Prime Minister and Chancellor it’s 3 months since I tweeted my letter to you about the impact of Coronavirus on business and my worries about it. I wrote it crying my eyes out, terrified about what lay ahead and there’s been lots more tears since. This letter is less emotional, more logical but hopefully as impactful as the first.
A lot has happened personally and in our business since then. Sadly a lot of the letter proved very prophetic. 1.9M views on Twitter later and Alison McGovern MP reading it out at the Treasury Select Committee that day, it seems to have had some impact on policy in relation to CBIL and resonated with a lot of other business owners.
On a personal level, in that time, all of our household got COVID early on (and recovered). Elaine (my wife) has been diagnosed and successfully treated for Thyroid Cancer. The NHS has been brilliant for us. My elderly parents have both shielded all of this time, we’ve done everything we can to safely support them in this time. It’s been really hard, as it has for so many people and we’ve been on an enormous emotional roller coaster. I still feel a real sense of personal shame not having all the time I need for my family as I fight for business survival. But that’s my problem, not yours.
In our business, we have had significant ups and downs. Last week we announced the closure of our Manchester restaurant. With the huge property costs and overheads, and our ineligibility for the Business Support Grant, it has proved impossible to make that site work financially in this very different world we now find ourselves in.
I can’t begin to tell you how sad that made us feel and the sense of failure we feel, letting down our customers and staff. 31 of our staff are soon to be unemployed. They are people we know, care about deeply and consider our friends. We’ve cried a lot over this, making that decision, communicating it and now living with it. We know the reality is that many of them will struggle to find other jobs.
At heart, we are a very successful small group of restaurants, but devastated by the impact of being closed. As you asked us to back in March, we trusted that you ‘will do whatever it takes’ to support business and save jobs. We still don’t understand the arbitrary cut off of Rateable Value of £51k for the Business Support Grant. If we had received that grant, our Manchester restaurant would still be here. Instead, the Treasury will be missing the £6M in tax revenues we and our staff would have paid over the next 10 years. That grant would have cost £75K. You have missed a £6M return on investment.
But I don’t want this to be a moan. We have used this dreadful opportunity to try lots of new things. We’re determined to fight for our future and make sure we are more successful and stronger than before. We have used this opportunity to make over 3000 free meals for NHS staff and other key workers. We now have a hugely successful online business, produce frozen meals, cook at home meals, we bought up most of the UK’s stock of Spanish beer (and in doing so helped lots of wholesalers and importers) and have brought a lot of happiness to people’s lives as a consequence – we deliver all over the UK, you should give us a try!
In doing this, we have provided a lot of work to out-of-work taxi drivers with our home delivery service, making a big difference to our local communities. All of this with most of our workforce furloughed and a few volunteers. The flexibility you are introducing to the Job Retention Scheme is brilliant, but we could have so done with this months earlier.
We have generally been really well supported by lenders, benefitting from a small CBIL, and payment holidays from most. However, we have no protection from any of them activating Personal Guarantees, and consequently forcing the closure of our business and making Elaine and I homeless. I can’t begin to tell you how terrified that makes us feel, heart in the mouth, sick in the stomach terrified. A good example of this is Nucleus Commercial Finance. When lockdown started, and we had zero income, we asked all of our lenders for payment holidays. They all agreed, except Nucleus who have aggressively pursued us for payments (it wasn’t that we wouldn’t, we couldn’t pay due to the impact of COVID ), they then terminated the loan, have started recovery proceedings, pursuing personal guarantees, slapped on a £5k ‘fine’ and 60% interest charge (which they have very ‘kindly’ suspended for 3 months). Ultimately, this could see our company forced into administration, we lose our house and the govt having to bail out the bank for the CBIL loan. All for this one aggressive lender, Nucleus CF, who are operating no better than the loan sharks preying on the most deprived. We desperately need a debt enforcement moratorium to include lenders. If we went under, it is in no-ones interests (and the government would lose another £10M in tax revenues). Luckily for us, in Liverpool, we have good supportive landlords, who are with us in partnership through this.
We are just one small, family-owned, independent business. We’re successful, much loved (not from a point of arrogance but judging by the thousands of messages we have received). We pay our taxes gladly. It makes no sense for us to go to the wall.
We are no different to hundreds of thousands of hospitality businesses. We’re crying out for more targeted support as this crisis will clearly be around for some time to come (as well as being hugely grateful for the support we have received so far). We all still need more support.
What would help?
- a debt enforcement moratorium
- Support to implement the National Time Out Initiative for rent
- A VAT reduction, particularly targeted at hospitality, tourism and leisure
- Extending non-contributory furlough in hospitality as the impact will be long and deep
We’re now working incredibly hard to re-open on 4th July. It’s really unhelpful to be so close and to have no idea what rules the government will allow. 1m or 2m makes an enormous difference for planning. Financially, whichever one it is, it’s disastrous which is why hospitality needs that extra support. But for our logistics, planning, safety, operations and staff training, it’s essential to know right now.
I don’t know if you ever read my last letter. 1.9M others did. I don’t expect a reply, but in doing this, it gets it off my chest and hopefully gives you some insight into running a small business through these dreadful times and what might help. Thank you.
Co-Owner & Founder (with Elaine, of course)
21st June 2020