LCCI asks Prime Minister Rishi Sunak to respond to the London business community’s concerns during these difficult economic times.

Businesses are under immense pressure and are operating in an exceptionally difficult and deeply uncertain economic environment. The combination of unsustainable operating costs, high energy prices, inflation, and the war in Ukraine has caused business confidence to plummet. Recent research that we undertook found that 1 in 5 London businesses expect their profitability to worsen in the coming months and in turn this will impact their investment plans and employment outlook. The only way to alleviate the pressure on businesses is through the introduction of tangible support measures that will restore business confidence and enhance productivity in the UK. On behalf of London’s business community.

We sent an open letter to Prime Minister Rishi Sunak to ask that your Government consider the following options as you set out your forward policy agenda:

1 - Energy prices – High energy prices are squeezing businesses from all sides and severely hampering their recovery form the pandemic. As we approach winter, many firms will be questioning their ability to weather future price increases, and for this reason we fully support an energy price cap for businesses. We also endorse the British Chambers of Commerce’s stance that the Government should:

• Give more power to Ofgem to strengthen regulation of the energy market for businesses
• Introduce a temporary cut in VAT to 5% to reduce energy costs for businesses
• Announce Covid-style support by introducing Government Emergency Energy Grant for SMEs
• Temporarily reverse NICs and put money back into the pockets of businesses and workers
• Immediately review and reform the Shortage Occupation List (SOL) to help bring down wage pressures and fill staffing vacancies

2 - Taxation and business rates – As you rightly stated during the Conservative Party leadership election campaign, the cost of doing business crisis has laid bare the shortcomings of our taxation system as it relates to businesses. In its current form, the system is capricious and short-term, which breeds business uncertainty. It disadvantages smaller businesses, the lifeblood of our economy, which have less scope to offset business rates rises and other costs. We need immediate pro-business measures, such as a reduction in business rates, to enable businesses to cope in the current climate. Moreover, tax should be separated out from premises to recognise the shift in working patterns that has taken place since the pandemic. Reforms such as these reflect the need for a strategic, long-term taxation system that encourages business confidence.

3 - Help for SMEs – We support your commitment for your Government to be a pro-business administration. Like the rest of the UK, London has a high proportion of small businesses, and yet our economic, trade, and regulatory system is geared to prioritise the needs of the UK’s largest corporations. A truly pro-business agenda would develop the mechanisms that would enable smaller businesses to access at least some of the advantages enjoyed by their larger counterparts, which would truly unlock the UK’s economic potential. In the long term, we would welcome proposals that provide SMEs with the same access to markets, supply chains, regulatory support, and finance to ensure they are granted a more competitive – and less tilted – playing field.

​​4 - Skills & Levelling Up – We strongly back the levelling up agenda. LCCI believes that London can do more to help level up all regions of the United Kingdom through greater economic connectivity. This is strongly linked to the current skills gaps that we must address to improve productivity and progress toward a high wage economy. In LCCI’s most recent quarterly survey of business leaders and their skills requirements, more than a third of London businesses said the current training schemes do not meet the needs of their companies, while almost a quarter felt the training schemes would be of no benefit to their business. There is a clear disconnect between the skills requirements of businesses and the public sector’s efforts to encourage their development. The Government must better engage with businesses and chambers of commerce to bridge the current skills gaps.

​​5 - International Trade – LCCI has a UK wide role as the largest issuer of international trade documentation in the country and supporting London businesses to export. Businesses regularly use LCCI as a sounding board for their concerns around international trade, and one of the most prominent of these is the prospect of the UK sleepwalking into a trade war with the European Union. The EU is our largest trading partner and if our trade flows experience disruption then the immediate impact on London businesses – and businesses across the whole of the UK – could be profound. We urge the government to preserve peace and promote macroeconomic stability which is so vital during the current cost of living and cost of doing business crises we are currently experiencing.

We have now received the Government’s response click here.

We look forward to working with Ministers so that the needs of London businesses are acted upon.