A senior London business leader has told MPs the level of Government support available to firms in the centre of the capital is “laughable” and takes no account of the extra costs of operating in areas such as the West End.
Ros Morgan, chief executive of the Heart of London Business Alliance, which represents firms in and around Piccadilly, Leicester Square, and St James’s, said the help offered so far by Rishi Sunak “does not meet the realities of doing business in central London”.
Giving evidence to the housing, communities and local government Commons committee inquiry into supporting high streets, Ms Morgan called on the Treasury to abandon its “one size fits all” approach and allocate grants “to reflect the differences between areas, sectors and needs within the businesses community”.
There has been particular concern among central London businesses that the distribution of the first wave of discretionary grants was based on local population rather than number of businesses, which resulted in smaller handouts in areas such as the City if London and Westminster.
This ended up with businesses in Westminster receiving an average of £100 each. Ms Morgan said: “This is laughable. I know the intention was right, but the calculation is wrong.”
The latest £4.6 billion round of grant funding announced this month to support businesses through the current coronavirus lockdown “is a step in the right direction because it’s based on rateable value, but it’s a long way off the financial support that these businesses need, especially in central London, if they are to survive,” she said.
It is capped at £9,000 for a business with a rateable value of £51,000 or more but Ms Morgan said in the Heart of London area the average rateable value is £600,000.
She has asked the Treasury to revise how this grant is calculated adding: “What we want Treasury to do is remove the cap and replace it with something that reflects this relativity and of doing business in central London.”
Businesses in London are increasingly alarmed about what the see as a “cliff edge” in late March when rate relief, VAT deferrals and rent rollovers are all due to end. They will also start having to make repayments and pay interests on emergency Government-backed loans taken out early in the pandemic.
Ms Morgan called on the Chancellor to address the potential squeeze sooner than the spring Budget scheduled for March 3.