More than two months since lockdown began, large parts of the capital’s vibrant and thriving economy remain on ice. In particular, the leisure, cultural and hospitality sectors, which are a cornerstone of our city’s success, are at the sharp end of the crisis.
Our buzzing night-time economy is on hold: the pubs, clubs and restaurants which play a huge part in this city’s status as one of the greatest in the world remain shut for the foreseeable future.
And although changes may be on the way for some businesses in the coming weeks and months, as we head into what would normally be a summer boom for the capital we need to take stock of the seriousness of the situation in which many firms now find themselves.
While entirely necessary to slow the spread of Covid-19, the lockdown has come at a cost: almost a quarter of London businesses are on the brink of collapse, according to City Hall’s research. These businesses must not be allowed to suffer for playing their part and following the rules.
The Government’s unprecedented support package, which includes grants for small businesses, ‘bounceback loans’ for SMEs and the Coronavirus Job Retention scheme, has helped many employers survive the lockdown so far.
Indeed, the furlough scheme has staved off mass redundancies, helping many firms to be ready to re-open when the times comes.
Likewise, the opening of the Self-employment Income Support Scheme – another area where the Mayor, Sadiq Khan, lobbied hard following the initial exclusion of freelancers from the initial offer – has been vital. More than £3 billion worth of claims have been made so far – a number set to climb further in the coming weeks.
But there is still work to do. We must give businesses the help they need to stay afloat and to support the capital’s economic recovery.
What we’re hearing from businesses, many of which pay their commercial rent quarterly, is that they expect crippling bills to come in June. Many don’t qualify for the financial assistance on offer, in part due to the higher rateable values of property in the capital – an unfair situation which we have called upon the Government to rectify.
The extension of the furlough scheme, with flexibility for part-time work, for which the Mayor had lobbied alongside business groups, was welcome. But from the start of August, businesses are being required to share some of the financial burden with the Government, with the very real concern redundancies and business failure will follow as a result.
This week’s figures from the Office for National Statistics offer a stark warning to us all, with the number of people claiming unemployment benefit in the UK soaring to 2.1 million in April – the first full month of the Covid-19 lockdown.
Many businesses are rightly concerned about the here and now, wondering how they might survive for the next few days and weeks. But it is abundantly clear that countless London firms will require further support to survive the continuing lockdown, phased exit and recovery periods which will follow.
Ministers need to continue to support small and medium-sized businesses which are struggling to pay rent and to make more companies here in London eligible for government support grants.
The Mayor and I will continue to do all we can to support London’s businesses, including the range of tailored support on offer through the London Growth Hub and our innovative Pay It Forward London scheme, which lets Londoners purchase goods and services from a range of companies in advance of the return to normal or near normal operation.
Time and time again we have heard the phrase ‘whatever it takes’. So far, we have seen an economic package the like of which we have never seen before in peace time.
But gaps remain, and if we’re to stave off the effects of what the Bank of England predicts will be the worst economic crisis in 300 years, the meaning of that claim will be tested. It must continue to underpin the Government’s approach, with the urgent introduction of further support for those businesses which desperately need it.