Covid-19: Recovery of Central London Businesses

Part of the debate – in Westminster Hall at 11:00 am on 22nd June 2021.

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Photo of Nickie Aiken Nickie Aiken Conservative, Cities of London and Westminster 11:00 am, 22nd June 2021

The hon. Lady makes the clear point that tourist attractions in central London, whether in her constituency or in mine, are suffering due to the lack of international visitors.

Theatres in particular have a significant multiplier effect for the local economy. It is estimated that people who buy theatre tickets will spend up to five or six times more in the local economy, whether in restaurants, hotels or wherever. To remedy the situation, we should urgently address several areas in our recovery from covid-19, which will no doubt have a significant impact on the central London ecosystem.

First, and in light of recent decisions, I ask the Government to give due consideration to a Government-backed insurance scheme to help event organisers plan for the risk of covid-19-related cancellations. Indeed, UK Theatre’s May 2021 survey of members’ planned economic activity up until June next year on productions, both planned and currently running, was 67% of 2019 levels. Of that, 66% was planned for stage 4, which has now been delayed. Without a Government insurance package, theatres expect that proportion to fall to around 35% to 50%, which will be a devastating hit to both the sector and those who rely on its influence to draw in consumers.

Secondly, UK Music noted that extending the 5% VAT freeze on cultural tickets until the end of the financial year 2021-22 would go a long way to incentivise activity in the capital and support investment. Indeed, by keeping VAT low the Government will be allowing more money to be invested into venues, recapitalising and paying off pandemic debt—we know how much pandemic debt many of these companies have.

On another note, I am glad that the Government’s tourist recovery plan, launched this month, acknowledges that London is the gateway for international tourism and, as such, is an integral part of the wider UK levelling-up agenda. Support and investment for central London must reflect that and help mitigate its reliance on high-volume footfall from tourists and workers. In central London, international visitors account for 50% of all spending, even though they make up only 25% of visitors. With the international travel market not likely to start growing again until early next year—possibly into spring next year—shops will open with the return of all the costs that entails, such as business rates, rents and employee costs, but they will not yet have the major customer footfall spending money in their premises. That will put new pressure on businesses that have already exhausted their reserves.

How can we mitigate that? It could be as simple as allowing Sunday trading hours to be extended from 6 pm to 8 pm in the international centres of the west end and Knightsbridge in order to accommodate new patterns of opening hours. I raise this now because, prior to the pandemic, few theatre productions ran a Sunday matinee, for example. Now, however, theatres are increasingly looking at scheduling Sunday matinees and it is likely that Sundays could become as busy as Saturdays, and with that comes increased need for the consumer.

With most other global international centres—New York, Dubai, Tokyo, Beijing, Hong Kong and even Edinburgh—having no restrictions, we are at a competitive disadvantage in London. Allowing longer Sunday trading in an international centre would have a localised impact of up to £290 million net in additional sales, and 2,000 full-time jobs. That is not to be sniffed at. The support measures would cost the Government nothing but could mean the world to businesses in London.

I also urge the Government to work with businesses to seek new ideas and encourage more visitors, especially high-spending ones, to our areas. Most experts estimate that international tourism will not return to 2019 levels until 2023 at the earliest. The Government should do all they can to accelerate tourists’ safe return, with plans to promote London globally as a place to visit and do business.

On a similar note, how office workers react post pandemic will be important for business recovery in the capital. The Government need to do all in their power to stimulate a safe return to the office. Right now, only about 10% of office workers have returned to full-time work in central London, which is woeful. Business representatives from across my constituency, and from multiple sectors, all concur that they do not expect to see any big return until at least September—that is three months from now, and costs will be increasing from next week.

What I find most concerning about this situation is that the shortfall in workers returning to the office is due to a distinct lack of confidence in public transport and changing work practices. As we emerge from the pandemic, the Government must help by encouraging the return to work and encouraging confidence in the safe use of public transport. It is imperative for Government Ministers to encourage civil servants in their Departments to lead the charge and to come back to their desks. I appreciate that we will not see the same volume of office workers over the summer and into the autumn, but even seeing a return of working on a flexible basis—say, two or three days or week while we recover in the short term—would have a huge impact on the economy of central London. For that reason, I welcome this week’s announcement by the Government of the new flexible season tickets. Within London, we need a robust transport system that commuters are confident to use again, with the Mayor working constructively with the Government to ensure that is the case.

I will leave it there for now, because I am confident that London will recover from the covid-19 pandemic, as it has recovered from previous shocks, be they plagues, fires or world wars. I want to see London getting some recognition from central Government for the key role that it plays in supporting the UK’s economy, and we need that recognition to be married to a clear vision for business recovery in central London.