Thursday 15 October 2020 6:30 am

Business groups warn London lockdown would 'crumble' capital as mayor calls for support

Save our SMEs

A London lockdown would “crumble” businesses and turn the capital into a “ghost town”, leading business bodies have told City A.M, as fresh restrictions are likely to be imposed on the city in the next few days.

The Centre for Economics and Business Research (Cebr) said a London lockdown or two-week “circuit breaker” would hit the economy hard.

Read more: London coronavirus cases: How many infections are in your London borough?

New restrictions are likely to be put in place in the capital “in very short order,” according to someone a City Hall with knowledge of the situation.

Khan calls for support

Anticipating the change, mayor of London Sadiq Khan wrote to Prime Minister Boris Johnson saying the government must “put in place a support package for businesses, workers and London’s local authorities”.

The virus is spreading in every part of the city. London is expected to imminently hit an average of 100 cases per 100,000 people. A significant number of boroughs are already over that threshold.

Discussions between city leaders and ministers are ongoing. Yet according to sources who spoke to the Financial Times, new restrictions could be put in place as soon as Friday. 

Economists and business groups said new restrictions would be highly costly.

Cebr chief executive Nina Skero told City A.M: “The real cost of the circuit breaker would come in terms of crumbling business and consumer confidence, with a corresponding impact on investment and expenditure.”  

“The City still feels like a ghost town compared to its pre-pandemic days and the businesses that rely on the daily influx of workers, [including] cafes, dry cleaners [and] hairdressers, face some difficult months ahead,” she added.

The latest data from the Cebr found that the pandemic created a £2.3bn spending hole in London between March and July, as shops remained shuttered under lockdown.

Read more: Rishi Sunak extends furlough scheme for businesses facing lockdown

City of London Corporation chief executive Catherine McGuinness told City A.M. it was “absolutely critical that London moves as one in tackling this wretched virus… [and to] keep the economy running as much as saving lives”.

“In terms of London’s long-term competitiveness and position we’re very confident because of the strengths that London has, but we are very worried about the supporting ecosystem, particularly in the City — the cafes [and] the bars that need that footfall there”.

Third UK Coronavirus Patient Transferred To London Hospital
The total number of coronavirus cases in London hiked to 65,503 today (Getty Images)

Circuit breaker

The Prime Minister is facing mounting pressure to introduce a two-week “circuit-breaker” lockdown to curb an exponential hike in infections across the country.

Labour leader Keir Starmer yesterday said refusing to impose one would cause the UK to “sleepwalk into a bleak winter”.

Read more: More than half of London businesses ‘are not prepared’ for local lockdown

A snap Yougov poll released today found that the public “overwhelmingly” backs a two-week circuit breaker, with 68 per cent voicing their support for a lockdown during the October half-term.

The capital was placed on the lowest alert level under the Prime Minister’s new three-tier system that came into effect today.

However, Khan yesterday said it is “highly likely” that Londoners will face further measures in the next few days to stem the spread of the virus ”because cases are rising so quickly across the city”.

Khan said today that the government must provide support for businesses and vulnerable people in the capital.

He suggested more generous support than the government’s offer to cover 67 per cent of the pay of workers in businesses that are forced to close.

Before the Open: Get the jump on the markets with our early morning newsletter

“At present the scheme does not prevent the incomes of the lowest-paid workers falling below the minimum wage, but many Londoners in this position are blocked from accessing additional support through the benefit system,” he said.

He also said the government should immediately confirm an extension to the business rates holiday for retail, leisure and hospitality businesses”. It is due to end in March 2021.

Share:
Tags: