Coronavirus: West End could be wiped out by pandemic, warns City Hall

Saleha Riaz
·4-min read
The report noted that central London has suffered a significant reduction in footfall due to the COVID-19 pandemic. Photo: Getty Images
The report noted that central London has suffered a significant reduction in footfall due to the COVID-19 pandemic. Photo: Getty Images

Further lockdowns in 2021 as a result of the pandemic could result in the death of the West End, a report published by London mayor Sadiq Khan said, adding that tourist spending in the capital was down by £11bn ($15bn) last year.

The report said it “predicts that in the worst-case scenario, with continued, repeated lockdowns, 97% of the economic output of West End arts and culture could be lost.”

In even the best-case scenario, 10% of economic activity could be lost. Overall the sector employs 26,000 across London’s global business, commercial and cultural centre, referred to as the Central Activities Zone (CAZ).

Despite covering only a tiny fraction of its landmass, the CAZ is home to 4.4% of UK jobs and some 60% of all UK box office revenues are derived from West End audiences, the report explained.

The West End is a mix of retail, homes, culture, dining, entertainment, visitor accommodation and offices. It has twice as much retail floorspace than the City and the East. It also makes up more than half the entire land area of the CAZ.

City Hall analysis of forecasts by VisitBritain showed that consumer spending in central London by overseas tourists was £7.4bn lower throughout 2020, while domestic tourists will have spent £3.5bn less.

Many businesses and jobs in CAZ are facing an “existential threat” due to more people working from, the need to socially distance, restrictions on hospitality and venues, and the collapse in tourism, the report said.

Another sector that faces continued challenges is retail, with COVD-19 accelerating the impacts already being felt from increased online shopping and the added impacts of reduced footfall due to home working and reduction in tourism.

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In the long term, though, the study said central London is well placed to recovery strongly with the right policies in place.

According to the report, people returning to the CAZ once the pandemic is over will give retail, hospitality and culture sectors a much-needed boost, but there is a risk that many venues will have closed permanently before then.

It said London’s night-time economy may need to expand with shops, museums and essential services extending their opening hours in response to Londoners’ changing working habits.

Khan called on ministers to extend the business rates holiday beyond March and the furlough scheme beyond April otherwise more business owners could decide close permanently, he warned.

Khan also said that once the coronavirus vaccine has been widely administered and restrictions lifted, the UK will require “the biggest tourism campaign the country has ever seen,” with a particular focus on the capital.

Highlighting London’s importance, the report said the capital’s economy accounts for a quarter of the UK’s total economic output and before the pandemic contributed a net £38.7bn to the Treasury.

Latest figures show that Westminster Council collected £205m more in business rates in 2019-2020 than Manchester, Liverpool, Sheffield, Newcastle upon Tyne, Birmingham, Leeds, Bristol and Nottingham City Councils combined.

It also showed department store Selfridges paid more business rates in 2019-2020 than 19 shire districts collected individually.

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Before the pandemic, London was due to generate more than £10bn in gross business rates, a third of the national total.

Khan said: “When London thrives, the whole country thrives, so supporting our city’s businesses to survive the coming months will be absolutely vital. This must include the continuation of the furlough scheme, the business rates holiday, and the hospitality VAT reduction.”

“Our economic recovery as a city and a country will require the biggest tourism campaign that our city and country has ever seen, alongside the restoration of tax-free shopping for international visitors. Ministers can’t take for granted that once restrictions are lifted things will simply return to normal,” he added.

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