When Chancellor Rishi Sunak outlined the 2021 Budget on March 3, Islington business owners were hoping for relief after an incredibly tough year. Nearly two thirds of small businesses in the UK saw revenues decrease during the pandemic, and government support will be vital for their future.
This is especially important in Islington. According to the 2011 census, the borough is home to more than 10,000 businesses that employ a total of more than 176,000 people. Nine out of 10 of them are considered small businesses.
One week on from Sunak’s announcement, businesses in the borough are feeling optimistic but nervous. The Budget offered some reassurance by extending the furlough scheme, maintaining a reduced VAT rate and continuing hospitality loans. However, the future for Islington’s businesses remains uncertain. Islington Now checked in with some independent businesses fighting for survival.
Andrew Nightingale, co-owner of the Highbury Library, said: “The end is in sight.” He is hoping to reopen his bar, located opposite the Emirates Stadium in Highbury, on 12 April so people can eat and drink outside.
Andrew said the VAT reduction implemented by the Government during Covid had been a great help. In the budget, Sunak announced that the 5 per cent VAT would be extended to September, and then a 12.5 per cent rate would apply until March 2021.
“I am optimistic but nervous about the future,” Andrew said. He is hopeful that when football crowds return, this will help boost business. However, he added: “We are dealing with a virus and a government that doesn’t have a good track record for going back on things and making mistakes.
“I don’t want to get my hopes up too much.”
The Budget also announced restart grants totalling £5bn for retail, hospitality and leisure sector businesses. However, Andrew is concerned that these grants will be used to pay rent rather than to restart trade.
“They keep us afloat, but it doesn’t account for the income lost due to lockdowns. The money is just passed on to the landlord,” he said.
The issue of rent is a recurring theme for local businesses. Gianluca D’Angelo, co-founder of pizza restaurant Zia Lucia, which has a branch on Holloway Road near Highbury Fields, explained that the biggest disappointment in the Budget was the lack of rent support.
Gianluca said: “It was a bit disappointing on the rent side. Landlords are very difficult to negotiate with and the law is always on their side – it’s a battle you’re never going to win.”
Mick Doherty of the Islington Bar and Grill, also located on Holloway Road, was even more disappointed with rent support. Mick said: “We’ve had some grants from the council, about £1,000 a month. Rent is £7,000.
“I saw Sunak on the Andrew Marr show saying that the average rent for a pub was between £14-20k per year – our annual rent here is 84 grand, he’s totally out of touch. Caterer [an industry magazine] says the average was more like 39k in 2017.
“Every pub owner I know has massive rent arrears.”
Mick believes the government is not providing enough help. On the topic of furlough being extended in the Budget until September 2021, he said it was “not really any assistance – furlough only looks after employees. We still have to pay national insurance and pension contributions – furlough actually costs the business money”.
At Zia Lucia, they are more ambivalent. Gianluca believes that the Budget as a whole “is a good set of measures from the government” but that it could have gone further.
“It would have been helpful to redo the Eat Out [to Help Out] scheme,” Gianluca said. “Last year it created a lot of health problems but once the whole population is vaccinated it could boost the restaurant industry and really rebuild the mood of the country.”
Gianluca, like Andrew, is similarly optimistic about the challenge ahead. “I’m fairly positive but there’s a lot of work to be done to restore the industry – we’ll do our part,” he said.
Like Highbury Library, Zia Lucia has a strong online presence, something that has helped them fight for survival in these challenging times. They are planning to reopen again, outside only, on 12 April.