Tax help for the hospitality sector, an increase in the minimum wage and hikes in long-haul air travel are among measures affecting London announced by Chancellor Rishi Sunak today in a budget he described as being for “the whole United Kingdom” yet contained only one positive mention of its capital city
London was praised for being named the “best place in the world for green finance” but the only other reference to the capital, which produces nearly a quarter of the UK’s economic output, came when Sunak claimed to be extending “London-style transport settlements” to other city regions.
Sadiq Khan, responding the government’s spending review, also published today, has said it “takes London for granted” and expressed dismay that it contains no new transport funding for London, while additional money is being provided to other regions of England.
The Mayor’s disappointment was echoed by business group London First, which observed that “London itself won’t have the ‘London-style transport network’ the Chancellor says he wants for other parts of the country if it doesn’t get the cash it needs to keep services running”.
Think tank Centre for London made the same point, with chief executive Nick Bowes commenting that “‘London-style’ risks becoming code for slashed services and cancelled investment unless Transport for London gets the sustainable funding deal it needs”. TfL’s current short-term funding support arrangement is due to expire on 11 December.
London First also noted that the Chancellor “reeled off a shopping list-worth of towns and cities across the UK but barely mentioned the nation’s capital”. In section of his speech about “levelling up” Sunak said he was allocating the first round of bids from the government’s Levelling Up Fund, whose prospectus was designed in a way that almost excluded the capital. He mentioned Scotland, Wales and Northern Ireland as beneficiaries along with Aberdeen, Bury, Burnley, Lewes, Clwyd South, Stoke-on-Trent, Sunderland and Doncaster.
The British Museum, based in Bloomsbury, was named in a passage about “protecting our unique culture and heritage”, but this was primarily about “over 100 regional museums and libraries” being “renovated, restored and revived” along with £2 million to start work on a “new Beatles attraction” in Liverpool.
Marina Ahmad, Labour’s economy spokesperson on the London Assembly, accused Sunak of largely overlooking the capital, describing this as “an own goal” from a government which knows that “investment in the capital, especially its transport infrastructure, generates jobs and dividends for other regions in the country”.
But there was a warm response from Kate Nicholls, chief executive of business group UK Hospitality and co-chair of the London Tourism Recovery Board, to Sunak’s announcement of a one-year business rates discount for businesses in the retail, hospitality and leisures sectors.
Nicholls described this as “really good news“, though she also warned that “the devil will be in the detail” and repeated unheeded calls for the current lower VAT rate applied to the industry to be maintained to assist an “incredibly fragile” sector that is integral to central London’s hard-hit economy.
Ros Morgan, chief executive of the Heart of London Business Alliance, was another to welcome the business rates reform, but described the budget overall as “very mixed” from the capital’s perspective with “very little pro-London policy in there”.
Sunak drew criticism from Green Party AM Siân Berry for cutting air passenger duty on domestic plan flights, but disapproval from London First’s Adam Tyndall for bringing in a higher band for long haul international flights, which the Chancellor said produce the “most emissions”. On Twitter, Tyndall mockingly listed “some of the places we apparently want to do less business with”, including Singapore, Sao Paolo and “all of Australia and New Zealand”.
The national minimum wage for people aged 23 and over is to go up from its present £8.91 per hour to £9.50, but analysis by thank tank Centre for Cities shows that this will have its largest proportional effect in areas where the Conservatives need to win to retain their hold on power, with Burnley, Southend, Blackburn, Huddersfield and Doncaster, where at least 30 per cent of jobs will be required to pay higher rates, at the top of the list, and London, with only 11 per cent of jobs affected, almost at the bottom.
On London is a small but influential website which strives to provide more of the kind of journalism the capital city needs. Become a supporter for £5 a month or £50 a year and receive an action-packed weekly newsletter and free entry to online events. Details here.