FACING CLOSURE BECAUSE OF £300
Businesses reveal cost of not being able to get grant
I
MAGINE if £300 was the difference between you getting your hands on £25,000 or not. Now imagine you’re running a business in Wales that’s been forced to close because of the coronavirus pandemic.
Sadly, right now, many business owners don’t need to imagine – it’s their reality.
That money could be a lifeline for them. But they can’t get their hands on a penny of it, because their rateable values are just over the cut-off point for help.
One of those business people is Iftekhar Harris, known as Iffy, who runs a number of nightclubs in Newport. The venues, including Cotton Club and The Courtyard, haven’t been able to make any money in that time.
And while other businesses around him are able to claim the £25,000 grants to help tide them over, it’s not the case for Mr Harris.
The grant, which is being given to venues with a rateable value of £51,000 or lower, is available for those in the retail, leisure and hospitality industry.
Rateable value is the value assigned to non-domestic premises and is based on a property’s annual market rent, its size and usage.
However, the rateable value of The Cotton Club is £51,300. That extra £300 means he’s not entitled to the financial help for that venue.
He’s paying out £12,000 a month, without any income, and is even considering selling one venue, just to see him through the next year.
“The situation is looking really bad for us,” said the 51-year-old businessman.
Now, a campaign has been launched across the UK, calling for the upper rateable value limit for qualification for the £25,000 Retail, Hospitality and Leisure Grant (RHLG) to be raised.
Because of the RHLG guidance which means only those in the retail, hospitality, leisure and assembly sectors with a business rates value of up to £51,000 can access the vital grant, tens of thousands of businesses have been left stranded.
The #RaiseTheBar campaign, launched at the end of April, is calling on the Government to raise the arbitrary threshold cap to £150,000, allowing more than 100,000 businesses in these sectors the chance to survive.
Manager of Newport’s Business Improvement District (Bid), Kevin Ward, said: “In Newport city centre, around 50 businesses do not qualify for the grant due to the ceiling.
“These include some of our most popular shops, pubs, restaurants and nightclubs.
“It is important they have the same support as others to give them a fighting chance of surviving this crisis and being able to re-open when lockdown restrictions are lifted.”
Mr Harris also explained that this year was a bad one to begin with, due to the “worst possible” weather that hit Wales. Flooding and storms had already had an impact on nightlife, which was in its quietest period of the year anyway.
“The shutdown was on a Friday evening. We were fully stocked for a Wales v Scotland game, so we had extra stock in. We were getting ready for the bank holidays, so we had started building up our stock. Those bank holidays get you through the bad period after Christmas.”
He’s still got money going out – expenses are coming in the form of beer companies which won’t take back stock looking for payment plans, utilities and other overheads, along with staff wages that still have to be paid and furloughed staff members’ holiday allowance.
At the time lockdown was announced, Mr Harris had 85 staff on the books. They’ve mostly all been furloughed now, apart from a few who have been kept on to maintain the venues.
“When you’re a small business with one or two staff, it’s very easy to manage. But when you are a much bigger operation that has up to 85 staff it’s difficult.
“Cotton Club is £300 over the [rateable value] limit. It isn’t fair at all.”
He added: “A club and a bar business now, is not a case of we’re rolling in it and making massive profit. We’re fighting closure. It’s never been run for profit, it’s run for what I enjoy doing. We were already in a difficult situation.”
Without increasing the threshold for the grants, Mr Harris said it didn’t look good for his clubs.
“It’s looking more and more that we’ll have to close down altogether, and lose the staff altogether and wait for something to happen in the future and recruit then if we’re to open up again.
“The situation is looking really bad for us.”
Raising the rateable value threshold would also help around 150 hardhit firms within the Swansea Bid area to stay afloat.
Russell Greenslade, chief executive of Swansea Bid, said: “We cannot underestimate the importance of our retail, hospitality and leisure sectors, for the value they bring to our economy here in Swansea, and for the jobs they supply.
“Everything that can be done must be done to help our businesses come out the other side of this intact, and ready to pick up the threads.
“We believe the threshold of £51,000 is far too low to provide adequate support to these businesses in their time of need.
“That is why Business Improvement Districts across the UK are supporting the #RaiseTheBar Campaign in asking Government to increase the retail, hospitality and leisure rateable value threshold from £51,000 to £150,000.
“The retail, hospitality and leisure sector is vital to the UK economy.
“The retail industry alone generated £394bn worth of sales in 2019 with 306,655 units across the UK. In 2019, the UK leisure sector reached over £111bn in sales.
“The UK hospitality sector employs over 3.2 million people, that is 11% of
UK jobs, making it the third largest sector in the UK, accounting for £130bn in revenue, 6% of all businesses and 5% GDP.”
Bruno Nunes runs six venues in Swansea, including The Three Lamps, Brewstone, Peppermint and Bambu. Only two of his venues qualify for the grant.
However, his businesses currently employ more than 230 people directly.
He said: “The industry is being beaten to a pulp alongside tourism and retail.
“It’s been really difficult to an extent. The short-term measures have helped a little, not as much as one may have liked. But we’ve managed to keep everyone in work [due to furlough], everyone’s getting paid, at least all our people are being taken care of.
“Our biggest challenge is the longterm solution, and to see how this terrible situation will negate and surpass, and when consumer confidence will come back.
“It’s not just about being allowed to open it’s about being allowed to open and people feeling like they’re visiting our businesses, not Chernobyl a month after the disaster.”
“For an industry that runs on very low operational profit, it’s going to be a challenge to get past this.”
The 39-year-old business owner, who’s venues’ rateable values vary between £73,000 and £120,000, added that the hospitality industry was the “anti-Christ or oxymoron” of social distancing, so it may take a while for people to come around after the lockdown is over.
He added that he was worried about the economy as the industry pumped a massive amount into it.
Mr Nunes is also in the process of launching three new businesses that were due to open, and two of those don’t qualify for the grants either.
“Of the 11 businesses, only three have received some sort of grant support – RaiseTheBar is essential,” he said.
“It’s incredibly difficult.”
HEROES BEHIND THE MASKS: PAGES 8&9