Yesterday’s summer statement by Chancellor Rishi Sunak, designed to lessen the impacts of what he called “a very significant recession” in the UK, has received a variety of responses from London politicians and business groups as the capital’s economy struggles to revive under eased Covid-19 restrictions.
Sadiq Khan has accused the Conservative government of “ushering in a new era of austerity” for local and regional government, claiming that cuts to council services, public transport and police and fire services are becoming inevitable, not only in London but across the UK. He also slammed the Chancellor’s decision not to extend the furlough scheme for sectors of the economy hit hard by the coronavirus, such as leisure, hospitality and the creative industries, which form a big part of London’s employment profile and are vital for attracting visitors.
The Labour Mayor said these industries “can’t afford a drop-off in government support, so the Government’s decision to wind down its furlough scheme and risk mass unemployment is shortsighted”. He welcomed “the range of new measures to support jobs,” but expressed a fear that “they will simply be insufficient to prevent an unprecedented increase in unemployment”.
A special £900 million government fund for local growth projects will benefit London only to the tune of £22 million, despite the capital having the highest poverty rate in the country and some of its poorest local authority areas. The whole of London has previously been excluded from the Theresa May government’s £1.6 billion Stronger Towns Fund, described when launched in March 2019 as being “targeted at places that have not shared in the proceeds of growth in the same way as more prosperous parts of the country” using a “needs-based formula”.
There was a less frosty reaction from business group London First, whose chief executive Jasmine Whitbread said “the Chancellor’s package to support jobs, infrastructure and boost consumer confidence will act as a shot in the arm at a time of considerable economic uncertainty”.
Whitbread accepted that the furlough scheme “must end” but said “businesses which can’t open through no fault of their own” should be given “targeted support” beyond VAT cuts and a 50 per cent “eating out discount” on diners’ restaurant bills during August. She also regretted theatres and arts venues not yet being given a timetable for reopening.
However, Whitbread welcomed Sunak’s “stamp duty holiday” for house-buyers in England and Northern Ireland – temporarily raising the threshold at which this tax must be paid by purchasers – is intended to stimulate the property market, including for first-time buyers.
Until the end of next March, the tax will not be payable on any home priced below £500,000 and will be less than before for more expensive ones – for example, stamp duty on a £750,000 house will fall from £24,286 to £9,286. Until yesterday, the tax applied to homes costing £125,000 and above, except for first-time buyers who were exempt for the first £300,000.
A graphic for the Evening Standard’s Homes and Property section, drawing on figures from the Land Registry and estate agent Hamptons International, shows that nearly all homes bought in Barking & Dagenham, where the average sale price is £298,620, will now be wholly exempt from stamp duty, as will 88 per cent in Bexley and 75 per cent in Hillingdon, compared with only 35 per cent in Islington, 17 per cent in Westminster and 12 per cent in Kensington & Chelsea.
The stamp duty change has also been welcomed by Conservative mayoral candidate Shaun Bailey.
In an initial response to the summer statement, London Chamber of Commerce & Industry chief executive Richard Burge said, “The Chancellor has once again shown a broad-ranging willingness to be creative” and welcomed “further measures introduced to assist the hospitality industry,” saying the meal discount scheme will complement Visit London’s Because I’m A Londoner campaign which encourages Londoners to return to consuming in their home neighbourhoods.
In a reference to quarantine rules for people arriving from overseas, Burge added: “Over the coming months it’s vital that London goes further and acknowledges the UK borders are once again open for business, with those in positions of London influence really championing the role that tourism and international trade will play in both the economic recovery of the capital and the country.”
Image of Chancellor from BBC News.
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