Economic output in London set to fall by £44 billion this year and we could see the highest rate of unemployment in the capital for over 20 years in 2021, with the loss of 350,000 jobs.
Hospitality, retail, leisure, the cultural sector and construction are sectors which continue to be hit hard by the pandemic, with many businesses across the hospitality sector in London on a financial knife-edge, according to the office of the Mayor of London. Critics say the Government’s recent spending review did little to address the true scale of the economic challenges which the capital faces, as many businesses still lack the grants and Government support they need to stay afloat
Spending by tourists in central London is estimated to have fallen by £10.9 billion this year as a result of the pandemic and uncertainty about what kind of trade deal will be agreed between the UK and the EU (if any) is also compounding the impact of Covid-19.
The Mayor of London, Sadiq Khan, has criticised the Government’s decision to end VAT-free shopping for non-EU tourists in the new year, which will end the decades-old duty free regime for travellers from outside the EU and make shopping 20 per cent more expensive for them.
The Mayor 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.
Country ‘cannot afford’ to take London for granted
The Mayor, Sadiq Khan, said:
“We had hugely positive news about the Covid-19 vaccine last week, but this data shows the devastation this pandemic has caused 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 2023 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.”
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