The capital has seen some of the highest numbers in the UK in terms of unemployment and job losses, with the most recent ONS survey estimating 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.
As a world-leading global capital, London has an essential role to play in the UK’s overall recovery and reputation, especially as the UK defines its place on the world stage post-Brexit, and as host of COP26 and the G7.
To ensure it is able to play its critical role in building back better, its businesses will need a roadmap out of the crisis and into recovery, along with a clearly communicated strategy for exiting lockdown restrictions.
Clearly-communicated fixed plans and guidelines
The reactionary and rapidly-changing approach to introducing restrictions has been incredibly frustrating and damaging for businesses, particularly for the smallest businesses, and cannot continue. Companies need to be able to plan for closing and reopening, and many have invested significant amounts of time and money into complying with stop-start guidelines.
The Government’s need to take speedy action to address the unpredictable spread of the COVID-19 is understandable, but businesses need sufficient lead-in time between any future announcement of changes and their implementation.
Additionally, businesses need unambiguous and consistent guidelines on:
- Safely reopening and operating premises and venues
- What employees and customers can and cannot do
- What is and is not considered essential work and travel
Businesses will also need clear guidance on whether or not they should, and will or will not be permitted to request proof of vaccination.
Efficient roll-out of testing to businesses of all sizes
The Government’s ambition to scale up testing is welcome, but an efficient roll-out of rapid testing to businesses of all sizes is critical. It is imperative that access to testing does not leave small businesses behind, but supports their reopening.
Continued financial support to help businesses past the finish line
As we look ahead to the reopening of our economy, those businesses that survive will have been dealing with the impacts of the pandemic for a year. Many will need support to reopen and/or adapt their operations. Steps must be taken to ensure businesses have access to vital working capital.
London businesses have been frustrated by the delays, complexity and inconsistencies in administering grant support, which they can little afford. Central Government should work with local authorities to identify solutions for streamlining and simplifying applications and administration of grants.
With tight restrictions likely to remain in place for months, businesses and employees urgently need certainty to help them past the finish line. Many are afraid of a cliff-edge at the end of March and this must be avoided at all costs. To give businesses the certainty they need, the Government must move swiftly to:
- extend furlough beyond the end of April
- maintain the business rates holiday and extend 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
- 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 establish a clear solution for supporting the self-employed
Public transport: instilling passenger confidence
When it is safe to do so, clear messaging that public transport is safe to use will be vital for the recovery of central London’s economic activity in particular.
Clearly communicating the measures taken to facilitate COVID-safe travel, along with unambiguous and consistent guidelines for passengers, will help to instil public confidence.
To help workers adapt to changing work patterns, flexible ticketing should be expanded.
Keeping transport moving
Underpinning this, of course, is the urgent need to agree a long-term settlement with TfL to sustain our critical transport infrastructure. Enabling the UK’s world-leading global city to keep moving should be treated as a solution to the country’s economic recovery, not an impediment to national growth.
Measures to encourage sustainable and active travel must factor in the needs of those who rely on vehicle use by:
- relaxing the congestion charge
- and working with businesses to review the allocations of LTNs and active travel schemes to ensure they support essential movement and the productivity of
- businesses that rely on road transport
Reviving the Central Activities Zone
As we look to London’s recovery, the Central Activities Zone (CAZ) will remain of particular concern and will need targeted support. The loss of footfall and international travel has left many businesses in this area either unable to open at all or unable to make a profit outside of lockdown.
Steps must be taken to encourage people back into the CAZ, including:
- clarity of messaging on what restrictions mean for Central London and its business sectors, what people can and cannot do, and which activities are safe
- incentives for new businesses to start up in or move into the CAZ
- a global destination marketing campaign to encourage local, domestic and international visitors to travel to central London
- reintroducing the night tube when it is safe to do so
- and extending Sunday trading hours in the international centres
Recovering international travel
Virtual platforms have only gone so far to sustain business relationships and contracts. International travel must be restored at the earliest opportunity to enable London’s businesses to retain and rebuild the delivery of projects, contracts and client relationships that rely on overseas travel.
Furthermore, the loss of international travel has been hugely damaging to businesses that rely on the custom of international visitors, as well as those that are closely connected to airports’ activity.
The Government must:
- set out a clear strategy for ending border closures
- implement an effective travel testing scheme that can safely remove the need for self-isolation on arrival as soon as safely possible
- and recover international business travel by introducing a corridor beyond ‘high value’ and new business travellers
Recovering consumer activity
Outside of lockdown, many businesses – particularly in central London – have either been unable to make a profit or have been unable to reopen at all. To help businesses most affected by restrictions across hospitality, retail, leisure, culture and tourism, the Government must:
- introduce grant funding to help make cultural venues COVID-19 secure and to enable the reopening of venues
- abolish the curfew for hospitality businesses
- reinstate the UK VAT RATE refund for overseas visitors indefinitely
- providing that the necessary safety measures and testing are in place, reintroduce Eat Out to Help Out, and explore a similar scheme – or voucher scheme – for the culture sector
- introduce 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
- reduce UK VAT on admission for currently non-exempt forms of entertainment, such as “commercial” performances
- and work with local authorities and businesses on enabling the creation of suitable outdoor space, enabling businesses in hospitality, culture to adapt operations in line with restrictions
- and set out clear guidance on safety in the public realm
A holistic approach to skills
Reskilling and upskilling must be a priority, and this must focus on all age groups. Alongside schemes for young people, support must be put in place to help skilled adult workers to transfer their experience into new roles and industries, particularly where skills gaps are growing or remain unaddressed.
Apprenticeships should be a solution to recovery and addressing growing unemployment, but a recent survey commissioned by LCCI and London Councils revealed that only 8% of London businesses currently employ apprentices. To ensure the apprenticeship levy and scheme work better for employers and apprentices, greater flexibility must be introduced, including:
- giving levy-paying employers the flexibility to direct some of their levy funds towards pre-employment training and the hiring or wages of apprentices
- and supporting SMEs to take on apprentices, including through funding administration costs