The mayor of London, Sadiq Khan, and London Councils have joined together to urge the Government to extend the business rates holiday and help protect thousands of jobs in London and across the country.
Businesses in the retail, hospitality, leisure and childcare sectors are currently benefiting from 100% relief from business rates for the 2020/21 financial year, in order to help them recover from the impact of the Covid-19 pandemic.
However, the holiday is due to end next March and Khan said many London businesses are “fearing for their future” if they have to begin paying business rates again before they regain financial stability
As part of a joint submission to the Government’s business rates review, Sadiq and London Councils are calling for an extension to the current business rates holiday to 2021/22.
Khan said such a move would provide crucial support to businesses reeling from a huge drop in footfall and lack of public confidence due to Covid-19, with the retail, leisure and hospitality sectors the worst hit.
Business groups such as the New West End Company (NWEC) have warned that ending the business rates holiday in March could lead to the loss of thousands more retail jobs without further urgent support from the Government.
Sadiq and London Councils are also urging ministers to make a series of urgently needed reforms to the business rates system to support the capital’s long-term economic recovery and empower local areas, including devolving power and accountability for raising the taxes needed to provide local services.
Khan said: “Businesses across London continue to struggle from the impact of Covid-19. If the business rates holiday comes to an end I worry many employers will have no choice but to make more people unemployed.
“Many large retail, leisure and hospitality businesses – accounting for thousands of Londoners’ jobs – are taking important decisions for the next financial year right now, so certainty over the business rates holiday is needed urgently.
“What’s more, many childcare providers are reliant on the current business rates holiday, and they are crucial in allowing Londoners to return to work.”
He added: “But beyond this, local government leaders across the capital are united in calling for long-term reform of business rates system too.
“Devolving control over setting and retaining business rates will be an important part of securing London’s long-term economic recovery and will have a similar impact on other towns and cities.”
London Councils’ executive member for Business, Europe and Good Growth, Cllr Clare Coghill, said: “Throughout the pandemic, London boroughs have supported their local businesses. Despite Government’s welcome initiatives, many businesses remain fragile, still reeling from the long-term impacts of Covid-19. There is still a need for targeted emergency support.
“Ending the business rates holiday too soon will destabilise too many companies, leading to closures, job losses and a shrinking economy both in London and across the rest of the country. That’s why we are urging Government to continue the discount, particularly for SMEs and those in the most at-risk sectors.
Chief executive of the New West End Company, Jace Tyrrell, added: “The reintroduction of business rates in April 2021 will be a final blow for many businesses already struggling to meet costs as they await the return of international and domestic visitors and larger numbers of people back in their offices.
“The result will be more business closures and potentially 50,000 job losses, severely diminishing London’s appeal to visitors, investors and global talent. We appreciate the support that the Government has given to businesses so far but it is clear that the impact of Covid-19 is going to last much longer than originally anticipated.”