Mayor Sadiq Khan has urged the Government to support the capital as new forecast data from City Hall lays bare the devastation to London’s economic output from COVID-19.
Latest figures forecast the London economic output is set to fall by £44billion this year. The data also shows that London could see the largest fall in employment in over 20 years with the loss of a further 350,000 jobs in 2021, even with the hugely positive news about the COVID-19 vaccine.
Sectors identified as most at risk include hospitality, retail, leisure and construction. The Government’s recent Spending Review did little to address the true scale of the economic challenges the capital faces.
Businesses across the hospitality sector in London remain on a financial knife edge as they still lack the grants and Government support they need to stay afloat. The same applies to the capital’s retail, leisure and culture sectors. This is further compounded by the uncertainty for businesses around what kind of trade deal will be agreed between the UK and the E.U, and the impact of any deal on different sectors of the economy.
With spending by tourists in central London already expected to have fallen by £10.9billion this year as a result of the pandemic, the Mayor has criticised the Government’s decision to end VAT-free shopping for non-EU tourists in the new year. The change, which is set to come into force in just four weeks’ time, will end the decades-old duty free regime for travellers from outside the EU and make shopping 20 per cent more expensive for them.
Khan is also calling for an extension of the business rates holiday beyond March along with more support for jobs beyond what the Chancellor announced last week.
The Mayor has continued to urge Londoners to show their support for London’s high streets and hospitality venues as they make their decisions about where to shop this Christmas. Sadiq is encouraging people to support the capital’s businesses to help recover from the pandemic, but to follow the rules while doing so – wearing a face covering in shops and keeping a two metre distance where possible.
The Mayor of London, Sadiq Khan, said: "We had hugely positive news about the Covid-19 vaccine last week, but this data shows the devastation this pandemic has and could yet cause without more government support. Many businesses are still in danger of closing and many thousands of jobs are still at risk over the next few years.
“I’m determined to do all I can to support London’s economic recovery now, and in the years to come, and we continue to provide grants and support directly to business across the capital. But these sectors won’t be able to sustain pre-pandemic levels of employment until 2032 at the earliest. If the Government continues starving the capital of investment it will do nothing more than choke off our recovery from Covid-19 – both in London and across the UK. The country cannot afford to take for granted London’s economy firing on all cylinders and continuing to contribute billions to the treasury to fund the Government’s spending plans.
“Extending the business rates holiday and abandoning their decision to end VAT-free shopping is the kind of support our businesses need from Government right now, but we also need a longer-term plan to address the unprecedented jobs crisis this pandemic could yet cause.”