It is now extremely clear that vaccinations and boosters are the winning formula in the fight against Covid as within little more than 12 months the virus has ceased its killing spree at the levels first witnessed in late 2020 and early 2021. The Government – content in this knowledge – is allowing society to be reminded of the vaccines’ efficacy, but sadly still delivering volumes of infected unvaccinated and perhaps less public-spirited people into the arms of the already distraught NHS, who are equally affected by rising infection rates.

The current narrative for society’s fight against the Covid pandemic, which is now endemic in the UK, is more attuned to “let them eat cake” than “jaw, jaw, jaw is better than war, war, war”. It is clear that the Government, the health system and society in general is lost for words in encouragement of anti-vaxxers to protect themselves. The vast array of vaccination centres still deployed ready and willing to deliver first jabs as well as boosters, offering the final chance of survival at the last chance saloon. But sadly, their relevance and life-saving capacity is still failing to convince some and falling on the remaining deaf ears in this plight to deliver public information.

The advent of 2022 prepares us all for a return to a life of near normality, with Covid jabs joining the humble flu jab in the future protection of the ever-increasing elderly population. Is it time now to question whether the current NHS model is fit for purpose in a world of increasing health risk and information intolerance and distortion? Should we be thinking more clearly about the future purpose of the NHS in the context of health education rather than just health defect resolution? It’s clear that a service free at the point of delivery is much loved by us all, but we equally should all be demonstrating a respect for the costs of such a service and our responsibility to others where we are able, to ensure that the much-appreciated NHS system continues.

Covid 19 has been a lesson for us all in both the relevance and importance of the nation’s health service and how, once again in this particular war on the virus, “so much is owed by so many to so few”, in our wonderful NHS.

About the Author
Adrian Hawkins OBE was awarded his honour by the Queen in the 2021 New Years Day Honours list for his services to business. A lifetime businessman, Adrian Chairs biz4Biz a business support organisation which he founded 11 years ago to create a business network in the Home Counties. Adrian is also the Managing Director of Welding World, Chairman of the Hertfordshire LEP Skills and Employment Board and Chairman of the Stevenage Development Board. Adrian has 40 years’ experience in the world of business.

There suddenly appears to be a new found wealth that is driving this desire for closer proximity to the electorate. Whilst billions of pounds have been set aside to support the Covid pandemic and facilitate growth post pandemic, we appear to have found a new confidence in our ability to fund activities despite the level of debt shouldered by most G7 countries. Has our Government gone “Crypto” is the Britcoin a reality to follow the unfettered Bitcoin? Whilst I applaud the support for many businesses provided by Government during Covid, is there a plan at any time afterwards to balance the books?

Will we be faced with redundancies or resignations following the removal of furlough? We are riding high on state aid for our homesteads, but once the guaranteed income is removed will businesses reach that make or break tipping point and reduce their staff levels or will they equally be faced with a deluge of resignations in a restricted labour market? It is my belief that we are facing a false dawn. Remove the enforced Covid arrangements and the new normal will be business as usual. The Hospitality sector in particular has been the first casualty resulting from the labour shortage created by Covid where many overseas workers have returned to the safety of their families in their native countries to see out the pandemic. Returning to the UK has been made much more difficult following immigration rules introduced in the meantime created by Brexit. This has skewed our thinking around unemployment in particular and will stimulate wage increases at this end of the employment market.

Rising house prices resulting from a greater appreciation of the countryside and the need for social distancing, home working offices and a garden, will place greater pressures on many other employers to increase wages. The more than a million empty homes in England and the more than one million homes with planning permission yet to be developed, might become the new wasteland of oversupply, once the impact of higher wages finds its way to consumer pricing, driving up inflation.

Those with the requisite skills will benefit from this “brave new world” ahead and really should take the opportunity to take the offer from the highest bidder to support their families new way of life. Indeed many may love the option of continued home working and others may desire a return to the old ways which may also be the arbiter of change for the future. The people will decide what is right for them and the companies likewise. Decisions around redundancies have been clearly delayed by the furlough scheme, but soon these decisions must be made as we near the opportunity for the resumption of normal service by business and the various safety nets are removed.

And at the point where obfuscation becomes the order of the day, is this the moment when devolution makes more sense again? Will we see a return of decision making back to the regions once the money supply tightens and pleading poverty becomes the new order of the day? The Government will likely have little choice. We are very likely to see rising inflation, higher levels of unemployment a spate of Company closures and a continuance of some Covid measures as public sympathy for Government turns to enmity. We will require structured tendering from Regions once more as the political blame game starts again and Government hastens its departure from their previous decisions.

Business as usual following the release of pent up demand will return with vengeance and it will fall to businesses across the land to foot the eventual bill for the necessary profligacy that the pandemic has incurred. It’s time to create the action plan wherever you sit in all of this and make the right play in what will be a new way of operating for us all.

#TheBigShift @biz4Biz @weldingworld

My tenant has asked me to reduce the rent. Should I agree?

You’re under no obligation to agree to reduce the rent. A tenant’s requirement to pay rent continues, even if they cannot occupy due to the pandemic.

The Covid-19 crisis has seen the government introduce a voluntary Code of Practice for Commercial Property Relationships, which encourages landlords and tenants to work together to alleviate its impact. While the Code does not change the legal relationship between the landlord and tenant, temporary rent arrangements between them may be needed – such as rent holidays or reduced rent. Be aware that the Code applies until 24 June 2021.

If your tenant requests a rent reduction, they should be clear as to why they need It and also provide financial evidence. As a landlord, if you feel unable to agree concessions, make sure you explain why. However, if you do decide to reduce rent, you should document this in a side letter.

What do I need to consider when agreeing to a side letter?

The duration of the concession. If the rent concession includes other rents under the lease (such as insurance payments and service charge). And if there will be an impact on rent review.

Make sure you consider if any other consent is required:

• If your property is mortgaged, you may need additional approval from the lender.
• If there’s a superior landlord above you, check if their support is needed.

It may be worth getting legal advice on other options specific to your circumstances.

My tenant has stopped paying rent, can I deduct rent payments from their rent deposit?

If there is a rent deposit in place, you may deduct the outstanding payments, provided the document governing the deposit permits it. However, the Code suggests tenants do not need to top up the deposit until it is ‘reasonable and realistic’ for them to do so. And, if your tenant becomes insolvent, there may be restrictions on your ability to draw funds from the deposit.

Can I forfeit the lease for non-payment of rent?

In March 2020, the government passed the Coronavirus Act 2020. This prevented landlords from forfeiting commercial leases for non-payment of rent until 30 June 2020 but has now been extended until 31 December and will be reviewed thereafter. As this suspension applies to forfeiture for non-payment, you may be able to forfeit if other grounds are available. Landlords should also consider the risk of rental voids and business rates liability in deciding whether or not to attempt to forfeit the lease.

Can I recover costs I incur for deep cleaning via the service charge and for any additional Covid-19 related services?

A landlord’s liability for providing services and the tenant’s liability to pay for services under the lease continue during COVID-19. Most service charge provisions will include the recovery of cleaning costs and an obligation to clean common parts (including deep cleaning).
Landlords will also sometimes have the ability to provide and charge for additional services where it’s reasonable to do so. If you are unable to provide certain services or your tenant is in financial difficulties, discuss the situation and negotiate temporary service charge arrangements.

Written by

Rachael Spalton

Partner and Head of Commercial Property at Longmores Solicitors

Please note the contents of this blog are given for information only and must not be relied upon. Legal advice should always be sought in relation to specific circumstances.

There is little doubt that the economy is in crisis, and that businesses, employers and the self-employed will face new challenges in both the short and long-term. However, whilst for some these challenges will be a product of the need to rebuild their business from the ground up, for others they will be linked to the need to meet increased demand and to accommodate sudden growth. Given either set of circumstances, the ability to adapt and accommodate change is critical.

Key considerations for businesses recuperating, rebuilding or booming:

We’ve said many times before, ‘cash is king’ and now more than ever effective cash flow management is imperative. Despite the concessions that have been made – for example, the opportunity to defer VAT and income tax payments – these liabilities will still need to be fulfilled later.

Cutting unnecessary outlay, spreading liabilities out, improving credit control, diversifying income and taking time to prepare detailed, accurate forecasts can all be useful undertakings. A dear understanding of your bigger financial ‘picture will enable you to make good decisions for the future of your business and income, whether you are recovering, rebuilding or faring well.

Consider whether you are making use of the Government-backed schemes and financial support that you qualify for. From furloughing provisions and income support for the self-employed, to grant funding and loan schemes; as we emerge on the other side of the crisis these measures will be as important as they were at the outset. Speaking to a professional can be key to understanding how to access the support and whether there are any obligations that may arise later as a result.

Tax planning can be beneficial, at a time when asset values have dipped, and tax policy is called into question. A restructuring of your tax affairs may, all of a sudden, be more affordable and, more generally, a proactive approach to planning can keep you one step ahead of any changes in legislation.

Outsourcing one or more of your key functions – for example, payroll or bookkeeping – can actually help you to reclaim capacity to focus on running your business, to eliminate any concerns that you might have about compliance and also to reduce costs in the long-term.

Cutting through the noise With official Government guidance being updated regularly and questions over the future of the economy and tax policy, it can be difficult for businesses to cut through the noise.

Written by
Richard Dilley
Partner, George Hay Chartered Accountants
www.georgehay.co.uk

The Hitchin and Harpenden MP proposes an equity fund of £15 billion to help SME business recovery, which is currently being considered by Government who understand that they will need to be more radical in order to heal the economy.

Bim said, “there are things that we need to do in the relatively short term to really kick start the economy like allowing investors to use part of ISA funds to put into private companies. This idea of recapitalising private companies by way of the recovery fund – around £15 billion of private and public money – will assist SMEs with their debt, which at the moment is higher as a percentage of its revenue and in absolute terms than it has been since records began.

“What we need is a fund that can take some of that debt and turn it into equity, if you can get more equity into those businesses it will be easier for them to manage their debt pile, at the same time providing an opportunity for the Government to take some of the upside when these companies become successful. This means that the Government would benefit a small amount from putting in rescue capital.”

In addition to this, Bim discussed his wider ideas for Hertfordshire, including an overhaul of the local infrastructure, some of which he believes can be completed quickly. New roads, for example, can be accelerated with the introduction of road pricing, which will attract funding from private investors with the planning then handled by Local Government. This aims to improve connections for the county as moving from place to place, from Hertfordshire to Essex for example, or even within Hertfordshire, often takes much longer than it should due to the poor infrastructure within the county.

Bim Afolami talking to a lively audience on Zoom

Bim said, “I think we should be moving to road pricing, constructing roads, and instructing people to pay a toll to take that road. I think that to get a lot more private investment into road infrastructure, which will be facilitated by road pricing, you need planning reform which is something the government really has been very radical about.

“Fundamentally, we need to give local areas the ability and the incentive to construct necessary infrastructure themselves. I think people are worried about introducing new toll roads, but strategically, when building roads that are at least dual carriageways it’s easier to get private investment if there’s a much quicker and direct payoff to the owner of the road, versus traditional government road with the complicated private investor route. Of course, in the wake of COVID-19, having people in their cars is better than people on buses so more roads is what the UK needs and what the economy needs”

Also discussed were the wider ramifications of working from home over the lockdown period. As offices shut down temporarily across the country and allowed their workers to continue from the safety of their own homes to help prevent the spread of COVID-19, there has been some discussion as to whether this will lead to a general shift in the number of people continuing to work in commercial spaces.

At first glance, particularly to the businesses themselves, there seems little downside in dosing or reducing the size of their offices, therefore reducing overheads, commute time, environmental impact etc ‘I he effects of this could, however, extend even further than the devastating loss of business for commercial landlords, lunch places, dry cleaners, and public transport.

Bim shared an interesting story with the Connexions group foretelling the outsourcing of white-collar jobs:

“A guy who runs a big private equity house said to me ‘Bim’, when I failed to reach accountants and lawyers who work for me from home, I worked out that I could just ring somebody from the Netherlands who was really good and cost half the price. That person was also working remotely, and they were working on a faster Internet connection that made it easier for me to actually work with them than somebody working 20-30 miles away in Britain.

“People need to be careful what they wish for, within white collar jobs people think that working from home is a sort of net gain, because they don’t have to pay for the season ticket for example. Not only are they missing a lot of social aspects and a lot of other things that they need to be in the office for, the real danger is that a lot of jobs could actually move overseas where they speak very good English and are very well educated and they can do it cheaper than they can in the UIC In Hertfordshire a lot of people are well paid for what they do because they’re good at it, but also because you just can’t get anybody to do that job in the southeast of England for less than x thousand pounds.

“What happens if you can get somebody to do that for half the price somewhere else? If everyone is working from home, there is no difference. We’re used to that happening with blue collar work with factories, but actually I think this could start happening with white collar work too. People assume that high salaries are just a way of life, but it is not always going to be like that, so I think we have to be careful about rushing too fast into the working from home.”

Bim Afolami, Member of Parliament for Hitchin and Harpenden, was speaking to biz4Biz members via the Zoom platform as part of a Connexions networking meeting.

My friends in China, the epicentre of this crisis have sent me a link to a booklet on how to deal with the virus. Written by clinicians, it is clear that the Chinese have used military precision in dealing with the problem, least of all, building 1,000 bed hospitals inside 10 days. The shock to the west is that our populations will have a greater level of mortality as is being clearly demonstrated currently in Italy and the USA.

So how much better is our form of commerce in the west and does it really matter? The rules, which have been dispensed with in recent weeks, as the UK Chancellor issues four budgets to contend with the commercial concerns arising from the outbreak. The short answer is, it is not any better and is really less important at this very difficult time. Survival is critical, maintaining some comfort during lockdown and encouraging people to stay at home is what matters most.

However we must pay tribute to everyone in the NHS and the associated suppliers that cannot stay at home at this time as they are needed to support those that normally fall ill and/or suffer from the Covid19 virus. Their work is “essential” in providing patients the medical support needed to survive. We offer our heartfelt thanks to you all for your tremendous support at this difficult time.

Keep Safe, so that we can win this battle for humanity, together.