Hospitality businesses are already severely impacted and disproportionately affected by the reductions in commuters and other visitors and travellers into London. Many local businesses and their employees are crippling under the weight of the pandemic and associated restrictions.
Every week matters to these businesses. The catastrophic impact on London is reflected in the city having the second highest unemployment rate in the country in the third quarter of this year at 2020 at 6%. It has also seen the largest decrease in workforce jobs among all UK regions, at 104,000. And the most recent furlough scheme statistics show that the capital had the highest take-up rate in the UK (13%).
These figures show the extreme situation London is facing and the potentially irreversible damage to its hospitality infrastructure and unique economic ecosystem. London now needs special, targeted and sectoral support.
With Christmas, one of the hospitality sector’s most important times, almost upon us, it is absolutely imperative that the Tier 2 rules and guidelines are implemented appropriately yet safely, allowing people to enjoy the city, boosting its economy whilst supporting the overarching objective of supporting public health.
It is essential to always bear in mind that when London does well so does the rest of the country, because the economic benefit of a thriving London stretches well beyond the capital. Central London hosts 1.9 million jobs and generates GVA of £211 billion, along with 19% of England’s total business rates revenue of £4.6 billion.
It is important to stress that hospitality businesses, venues, theatres, arts and cultural organisations have been imperilled through no fault of their own. Despite considerable efforts to provide secure environments and conscientious efforts to keep the public safe, they have thus far been rewarded by inconsistent and incoherent directives and muddled thinking, creating uncertainty and making it impossible to plan ahead.
Currently there is no persuasive evidence that the city’s public transport systems or hospitality venues have been responsible for any increase in transmission, cases, hospitalisation or fatalities. Lives and livelihoods should be protected on the basis of clear, transparent and relevant data and unambiguous local evidence.
Movement between tiers requires immediate and complementary financial and job support. The decline in inbound visitors, commuting workers and restrictions on live events has already had a disastrous effect, but additional restrictive measures without appropriate government support will be catastrophic.
On behalf of Central London businesses and the hospitality sector, I urge the government to set out substantial sector-specific support to help businesses most affected across the hospitality, retail, leisure, travel and tourism sectors including:
- Maintaining the business rates holiday for a further 12 months.
- Extending the deferral of all tax liabilities due in July 2020.
- Removing the obligation to pay interest on late payment on such liabilities.
- Extending the VAT cut to beyond March 2021 for hospitality businesses.
- Extending the threshold for hospitality grants beyond £51,000.
- In the absence of evidence underpinning its effectiveness and considering its detrimental impact, lifting the curfew for the hospitality and leisure sectors, though re-set to 11.00 pm, entirely.
- Reversing the decision to abolish VAT refunds for overseas visitors and extending this to European visitors.
- Targeting support for arts and culture by increasing theatre tax relief and providing tax relief to supply chain businesses that supply the arts and culture sector.
- Expediting trials of pre-departure flight tests with the aim of relaxing UK border restrictions and reducing the need for or duration of quarantine on entering the country.
- Working with Transport for London to reintroduce the Night Tube, pause the Congestion Charge and provide flexible ticketing for workers who choose to work from home part of the week.
- Implementing a local London test, track and trace system. With this in place we can balance tackling the virus with giving businesses, their employees and their customers the confidence they need to start building back our economy.
To boost confidence, the government must urgently set out with absolute clarity the support that businesses will be receiving up until the second quarter of 2021. Businesses do not just want support, they absolutely need it because of the lack of footfall and demand as a direct consequence of the pandemic and the government’s response to it.
The present circumstances are very challenging, but we can move forward and arrive at safe solutions which enable us to live and work with the virus today and in the future, emphasising and reiterating what we can do – not simply what we cannot.
Tony Matharu is founder and chairman of Blue Orchid Hotels and a member of the Central London Alliance, a group of businesses and associations seeking government help with bringing visitors back to the heart of the capital.
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