LPA also renews calls for greater fiscal devolution to support infrastructure delivery and business rates reform
The London Property Alliance (“LPA”) which represents over 400 real estate developers, investors and advisors across central London, has added its voice to calls for Government to reinstate tax-free shopping for tourists as new analysis suggests the capital is losing ground to rival European cities.
Analysis shows that visitors to Bond Street, Regent’s Street and Oxford Street from the Gulf area has edged up (by 1%) in 2023 versus 2022, but shopping expenditure is down 17%. Meanwhile, data from Global Blue, suggests that US visitors to Europe are spending more in rival cities, with total spend in the UK up 101% in 2002, versus 198% in France.
Ahead of the Autumn Statement on 22 November, the LPA has called for the Office for Budget Responsibility to undertake a full analysis of the economic impact of restoring tax-free shopping in London and across the UK, and also review the extension of Sunday trading hours in the West End to support its international retail offer. The West End is the largest retail area in the UK and an extension of Sunday trading would generate an additional £340million per year in sales, according to local business improvement districts NWEC and the Knightsbridge Partnership.
These form part of five keys asks from the LPA to drive economic growth in central London, which include business rates reform and fiscal devolution.
Charles Begley, Chief Executive of London Property Alliance, said: “Central London supports over 3 million jobs, is home to innovative and world-leading business clusters and generates almost a quarter of England’s total business rates income.
“But we face a variety of urgent challenges which puts London at a significant disadvantage to our European peers. The success of central London should never be taken for granted and we need a growth plan to enable the UK capital to fulfil its economic potential as a global city.
“The reinstatement of tax-free shopping is an easy lever for the Chancellor to pull, which alongside longer-term measures to unlock complex retrofit projects, devolving more fiscal powers to local government and reforming business rates will help ensure London retains its position as a leading, sustainable global city.”
The LPA is calling for Government to bring forward further fiscal devolution to the Greater London Authority and boroughs, including the retention of a greater proportion of the c. £5.2bn annual business rates revenue generated in the capital [DLUHC, 2022], and flexibility to adopt additional taxes and levies to fund much-needed infrastructure projects to keep London moving.
The LPA cites the success of the Elizabeth line, whereby approximately two-thirds of the cost was funded by farepayers and London businesses, and which has served as a catalyst for the development of modern sustainable office space, with 51% of all take-up in 2023 for buildings within 10 minutes of a Crossrail station.
The LPA has also highlighted the need for Government support to unlock ‘complex and intensive’ projects to retrofit older and historic buildings in central London, or risk the city centre becoming blighted with vacant and unlettable buildings.
It is estimated that three quarters (74%) of office stock in the core commercial districts of the City and West End will not Minimum Energy Efficiency Standards by 2030, with Savills estimating that 83% of all UK retail space, including London’s renowned shopping streets, also requires significant upgrade in the same period to avoid becoming unlettable and so-called ‘stranded assets’. The LPA is calling for a capital grant scheme to unlock complex projects and support London’s path to net-zero by 2030.
The LPA has also renewed its call for fundamental reform of the outdated business rates system to ensure it is fit for a 21st century economy.
