A coalition of powerful business groups has urged the chancellor to outline stringent support measures for the capital, as they warned London risks being “levelled down” by the pandemic.
In a letter to Rishi Sunak, the heads of groups representing more than 6,000 businesses including Heathrow Airport, the Ritz and Fortnum & Mason, said months of closure has “disproportionately” damaged the capital.
The letter, signed by leaders from the London Chamber of Commerce and Industry, the London’s Local Chambers of Commerce, and the Central London Alliance, called on the chancellor to draw up a “Marshall Plan” for London’s economic recovery.
They warned that almost a year of closures and “the absence of a path to recovery have created a genuine sense of despair among workers and business owners alike”.
The business leaders urged the chancellor to roll out a raft of support measures alongside his spring Budget on 3 March, including an extension of the furlough scheme beyond April.
Other key demands included an extension of the business rates holiday until at least March 2022, a delay to tax break deadline and an increase to the level of available grants “to better reflect the high costs of doing business in London”.
The letter also demanded targeted help for sectors that have remained shuttered since last March, such as a pledge to cover the cost of event cancellation if further restrictions are ordered, increased theatre tax relief and extended business rates relief for airports.
Richard Burge, chief executive of the London Chamber of Commerce and Industry, said: “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.”
It comes as the mayor of London this morning called on the government to appoint a dedicated minister for reopening the economy.
“Ministers still need to realise that many businesses remain at a crisis point,” Sadiq Khan said. He warned that “plans to end the business rates holiday and VAT cut in March and then the furlough scheme in April create a huge financial cliff-edge for employers.”
Data released earlier this week from the Institute of Fiscal Studies (IFS) earlier showed the hospitality-heavy capital has suffered the heaviest job losses of any UK region during the pandemic.
The number of London employees on payrolls dropped 5.5 per cent between February and December last year, according to the IFS — almost double the figure recorded in Scotland, which saw the second-highest number of job losses.
The think tank warned job losses could continue to balloon as the furlough scheme unwinds. The capital had the highest level of furloughed employees at the end of last year, with around 10 per cent of London’s workforce still on furlough in December, compared to eight per cent across the rest of the UK.