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The Mayor welcomed the Chancellor’s announcement yesterday of changes to improve the flawed and narrow Job Support Scheme. However, today’s figures demonstrate that the new measures and grants are only a sticking-plaster solution, with the collapse of tourism into London leaving many hospitality, retail and leisure businesses without any prospect of returning to normal levels of business for many months to come.
City Hall analysis of forecasts by VisitBritain show overseas tourists will spend £7.4 billion less on goods and services in London’s economic and cultural centre throughout 2020, while domestic tourists will spend £3.5 billion less.
This far outstrips the financial impact of the fall in commuters: City Hall estimates the loss in their spending will reach £1.9 billion – £1.4 billion from commuters living in London and £0.5 billion from those outside.
VisitBritain estimates the number of international visitors to the UK throughout 2020 will be 74 per cent fewer than in 2019, at 10.6 million. It also estimates that London as a whole will suffer from a reduction in international and domestic tourism spending, including transport revenue, of £20.7 billion in 2020 compared with 2019 levels (1).
The tourism industry is a vital part of London’s social and economic life: it accounts for as many as one in seven jobs in the capital and contributes almost 12 per cent of London’s GDP.
The new analysis comes as the Mayor commissions major new research into the impact of the pandemic on the ‘central activities zone’ (CAZ) – London’s economic and cultural heart – to identify the emerging trends across key sectors over the next few years and in the longer-term.
Along with the drop in tourism and commuters, the CAZ has also been affected by changes in how Londoners spend their free time. The situation is extremely dynamic as a result of the changing restrictions to tackle Covid-19, and so this research will seek to provide important clarity and a detailed evidence base which will then inform future recovery work and policies.
Sadiq has also urged the Government to scrap the 10pm curfew, which he argues became redundant when London and other parts of the country moved into Tier 2 and higher restrictions, which prohibit households mixing.
Sadiq is supporting hundreds of small companies through his Pay It Forward London scheme, through which Londoners can buy goods and services in advance from their favourite local and independent businesses struggling with the challenges of Covid-19. He is match-funding money raised through the scheme via his £1 million Back To Business Fund.
He is also calling on the Government to reverse its proposals to end duty-free shopping for tourists, in what would be a further blow to the central London businesses which benefit from the millions spent by visitors taking advantage of the scheme.
The Mayor of London, Sadiq Khan, said: “This analysis shows the eye-watering drop in the money spent by visitors in the economic and cultural heart of the capital – which is far greater than even the impact of fewer commuters travelling into the centre of the city each day.
“Clearly, this will mean many businesses are in danger of closing and many thousands of jobs will be at risk.