Friday 19 February 2021

With the Budget under two weeks away, a coalition representing London’s business community has written to the Chancellor to outline the capital’s needs from the 2021 Budget.

The letter, from London Chamber of Commerce and Industry, London’s Local Chambers, and the Central London Alliance (which includes Heart of London Business Alliance amongst other members), tells of measures that the thousands of businesses that they represent need to survive through the COVID-19 crisis, as well as ways that government can support London’s economic recovery.

The group tell that London ‘businesses and workers are crippling under the weight of the pandemic’, with the impacts of the pandemic and related restrictions leaving London with some of the highest numbers in the UK in terms of unemployment and job losses. ‘The most recent ONS survey estimated a “record increase” to 6.9% unemployment. Furthermore, the London Chamber of Commerce and Industry’s most recent Quarterly Economic Survey with Savanta ComRes revealed the worst economic outlook amongst the capital’s business leaders since the period following the financial crisis of 2008. The months of ongoing uncertainty caused by constant, rapidly changing restrictions and the absence of a path to recovery have created a genuine sense of despair among workers and business owners alike’.

Whilst it is unquestionable that every part of the UK has felt the impacts of COVID-19, the coalition urge the Government to recognises the significant difference in the costs of doing business in the capital (the average rateable value in the Heart of London area amounts to as much as £600,000) and the disproportionate impact coronavirus has had on central London.’

Richard Burge, Chief Executive of London Chamber of Commerce and Industry, said: “This letter not only represents businesses in the capital, but many businesses who have presence and other beneficial footprints into regions across the UK, and who also draw international investment into the country.

“As we look to recover from this pandemic we need the Government to be loud and proud about London and the role that it plays both nationally and globally - as the economies of capital and country are intrinsically linked. Allowing London to be levelled-down will not aid levelling-up the rest of the UK. A thriving London is the main and essential way to help level-up the regions that desperately need the help.

“This Budget presents a vital opportunity to demonstrate a support for London and its UK role, along with a clear recognition that the pandemic has hit businesses and workers in the capital harder than many other places in the UK.”

The coalition urge the Chancellor to urgently:

• extend furlough beyond the end of April,
• maintain the business rates holiday and extending the VAT relief scheme until March 2022,
• extend the deferral of all other tax liabilities until the end of 2021, allowing until mid-2022 to resolve deferred payments and removing the obligation to pay interest on late payment on such liabilities,
• increase the top level of business grants for the largest businesses forced to lock down, and remove the cap on discretionary grants to better reflect the high costs of doing business in London,
• deploy the necessary funding and resources to put in place a long-overdue effective testing system,
• introduce targeted support for the aviation sector, including full business rates relief for airports,
• introduce targeted support for night-time economy and accommodation businesses which have been unable to open since March,
• introduce targeted support for arts and culture by increasing theatre tax relief and providing tax relief to supply chain businesses that supply the arts and culture sector.
• set out a clear solution for landlords and tenants to address the rent arrears crisis,
• and introduce a Government insurance scheme for live events designed to cover the costs incurred due to lockdowns (nationally or regionally) and incurred by Covid-related risks.

Looking toward recovery, the coalition call on the Chancellor to provide targeted support to help hospitality, travel, tourism, culture and leisure industries to reopen, by:

• grant funding to help make cultural venues COVID-19 secure and to enable the reopening of venues,
• a reversal of the decision to abolish VAT refunds for all overseas visitors and making the scheme digital,
• abolishing the curfew for hospitality businesses,
• providing that the necessary measures are in place for this to be done safely (namely a suitably functioning testing system), reintroducing Eat Out to Help Out and exploring a similar scheme – or voucher scheme – for the culture sector,
• introducing a scheme to fund the difference between ticket sales and break-even point and cover the cost of cancellation in the event of further movement restrictions,
• investing in retrofitting buildings to improve their environmental performance and generate economic activity,
• and reducing VAT on admission for currently non-exempt forms of entertainment, such as “commercial” performances.

In addition to this, steps must be taken to revive the competitiveness of London’s economy, particularly its Central Activities Zone, including:

• expanding flexible rail ticketing to help workers adapt to changing work patterns,
• incentivising new businesses to start up in or move into the CAZ,
• investing in a global destination marketing campaign to encourage local, domestic and international visitors to travel to central London when it is safe to do so,
• and investing in supporting businesses and workers at all skills levels to pivot to new opportunities where needed.

Closing the letter, the group urge that it is vital that the Government agree a long-term settlement is agreed with Transport for London, as successfully functioning public transport will be absolutely critical to the recovery of London’s economic activity and is essential to its global reputation and competitiveness as a world city.

As highlighted, both factors have a key role to play in the UK’s overall recovery and competitiveness. Investment in the capital’s transport infrastructure should therefore be treated as a necessary solution to building back better, rather than an impediment to national growth.

The coalition support TfL’s Financial Sustainability Plan and urge the Government to work with TfL to reach a deal in the interests of London’s people and businesses. A greener, more sustainable recovery should be at the heart of this settlement, and the Government should seize this opportunity to invest in reducing the capital’s carbon footprint.

Helen McIntosh, Chair of London’s Local Chambers, said: “LLC is pleased to be part of this important business coalition and we fully support the proposals to help London return as a proud capital city.”