London has been “hollowed out” amid the pandemic, which has pushed people away from city centres faster than ever before, London mayor Sadiq Khan has said.
Covid-19 restrictions and economic uncertainty has made penny pinching Brits more reluctant to make use of the capital’s bars, restaurants and theatres, he added.
“It’s been hollowed out because people are working from home, leisuring from home, eat at home. That poses a potential existential threat to cities,” Khan told The Times.
“If you’re an investor or a business person, you choose London rather than Frankfurt because of the activity in the centre: pubs, bars, restaurants, theatre, live music.”
But the UK’s recovery relies on London’s recovery, Khan explained, as national GDP eeked out a 0.1 per cent rise in July, according to the Office for National Statistics.
“If you look at all the businesses in the borough of Westminster, they pay more in business rates than all the businesses in Birmingham, Bristol, Liverpool, Leeds, Nottingham, Newcastle, Manchester and Sheffield added together.
“So, if the centre of London doesn’t come back in a big way, it’s a big problem for the country.”
The government’s decision this month to hike National Insurance in light of slow economic growth has been criticised by analysts.
Julian Jessop, Economics Fellow at free market think tank the Institute of Economic Affairs, said when the country’s GDP figures were released that “now is clearly a bad time to be ramping up the tax burden even further.”
Jessop urged government to encourage spending to boost growth, but added that although the July data was “disappointing”, it should “only be a pause before a renewed acceleration.”