London’s Economic Recovery: Covid-19

Debate between Joy Morrissey and Felicity Buchan

Friday 23rd October 2020 Commons Chamber

[Felicity Buchan (Kensington) (Con)]

Thank you, Mr Deputy Speaker, for granting time for this Adjournment debate, and I thank colleagues who are in the Chamber; I am conscious that it is the Friday afternoon ahead of recess.

Reviving the London economy is critical, clearly for London but also for every single person in this country. London contributes a massive 25% of all tax to the Exchequer. Two small London boroughs—mine, Kensington and Chelsea, and neighbouring Westminster—contribute 10% of all business rates in the entire country, and London contributes £436.5 billion of gross value added. If we take the gross value added of Scotland and Wales and double it, then we get to London’s number. Ensuring that the London economy functions is important for people in Northern Ireland, the north-east of England, Scotland and Wales. It is critical.

Sadly, the London economy is suffering—in particular the central London economy. I think that there are two principal reasons for that. First, people are not commuting into work, and they are not coming in for cultural and social events at places such as theatres and restaurants. Secondly, there has been a massive decline in international visitors to our city. Let me take those in turn and look first at commuters.

[Joy Morrissey (Beaconsfield) (Con)]

Many people commute from Beaconsfield into London, and although we are not part of London, we benefit tremendously from the London economy. I thank my hon. Friend for being such a champion of London and its economy, because consumers and commuters who travel into London benefit just as much as those in inner London. I thank her for securing this important debate.

[Felicity Buchan]

I thank my hon. Friend for her kind words, and she makes a very important point. This is in the interests not only of London but of those who commute into London.

Let us look at the numbers. Morgan Stanley commissioned a survey in September comparing going back to work in the UK versus in France. In September, 34% were back to work in the UK, whereas in France the number was 83%. I have looked at the latest Greater London Authority data specifically for London, and only 41% are back in work—less than half of the people.

A second issue is the perceived lack of confidence in public transport—a lack of confidence that is quite wrong, to my mind. I hear that a lot from my museums, for instance, where footfall is dramatically lower. They attribute it to a lack of confidence in public transport. We need to get that confidence back, and we need to encourage people to come into central London. That is why I opposed so strongly what the Mayor of London did in extending the congestion charge to seven days a week and increasing it to £15. On the subject of the Mayor of London, he consistently talks down our great city. His job should be to inspire confidence, not to breed fear and nervousness.

Let me move on to international visitors. VisitBritain believes that numbers are down 74% on last year, which is a hit of more than £20 billion to the London economy. Again, it is all about confidence. We need to get those visitors back.

Clearly, London is in tier 2 measures, and I want to say how much I welcome the announcement from the Chancellor of the Exchequer yesterday to give additional support to constituencies such as mine that are in tier 2. I would also like to thank the Chancellor for his enormous financial support package across the country, greater than £200 billion. At the very beginning of the crisis, in the Treasury Committee, I called for a big, bold and decisive package of support, and, goodness, we have delivered that.

On the margin, I would say that London has not benefited from the support package as much as some other areas for very technical reasons. Grants to the hospitality sector, for instance, were given on the basis of having a rateable value of less than £51,000. Commercial property prices in my constituency are three times the national average, so businesses in my constituency with comparable cash flows and size to those in the rest of the country were not getting the grants that people in other constituencies were benefiting from. There is a similar case with the holiday on stamp duty. Clearly, that has been terrific throughout the country in giving people a holiday on property prices of less than £500,000, but just because of an accident of geography the average house price in my constituency is £1.25 million. Even in my ward, with the cheapest housing prices, the average price is £510,000. Very, very few of my constituents have benefited from the stamp duty holiday.

I also want to put it on the record that I am very concerned about the Government’s announcement that they will abolish tax-free shopping come 1 January. This might seem like a very esoteric subject, but international visitors to central London are critical for our economy. They spend a huge amount of money not only in our shops but in our hotels and restaurants, and they are highly mobile. If we make it less attractive for them to come to London by effectively putting a 20% increase on the cost of their goods, they will simply go to Paris or Milan. Especially as we are leaving the EU, we need to project an image of global Britain and to be encouraging international visitors. For the sake of the London economy and our high streets, hotels and restaurants, we need these spenders back.

However, let me look forward in a constructive way, because it is very easy to talk about the problems. How do we get the London economy going again? If there is one word I keep coming back to it is “confidence”. We need the confidence of commuters and the confidence of international visitors. How do we get that confidence? First, we have to get the virus under control: we need to get our numbers below 100 and to get the R rate down. If we do that, London can go back into being a tier 1 region. I would urge the Government to make that review as soon as the health statistics allow. We need to get London into tier 1 because London is the engine of our entire country. I would also strongly recommend that the Government review the 10 pm rule, again as quickly as the health statistics allow, because we need to support our hospitality sector.

We all need to work together collectively to get that confidence back and to reclaim London’s position as the finest capital city and the most prosperous capital city in the world.