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Business verdict on Chancellor’s Pre-Budget Report

The Government has today announced its Pre-Budget Report (PBR), outlining measures to mitigate the effects of the economic downturn.

Baroness Jo Valentine, Chief Executive of London First, said:

“London First set out three tests against which to judge the Government’s plans:

– Will they strengthen or diminish London’s competitiveness against other world cities?
– Will they result in increased investment in London’s infrastructure – thus protecting skills and jobs now, while building long term economic capacity?
– Will the opportunity be seized to transform investment in London’s East End, afforded by the 2012 Olympics?

“The down-turn is sure to hit London hard, but the right decisions can help lessen its effect. Supporting London’s economy is about investing taxpayers’ money in projects that will pay back in the long run, through returns to the Exchequer.  Bringing forward spending on London’s Tube, Crossrail and other transport schemes on the backburner would be wise investments at a much-needed time. Why has Tube investment not been brought forward in the Government’s capital spending plans?”

“The Government has clearly identified the need for UK tax regime to be globally competitive. Tax relief on dividends paid by foreign subsidiaries of UK companies appears to be a positive step in this regard.  We cannot afford, especially in the current climate, to introduce anti-competitive moves which encourage companies to move abroad. Many London businesses will suffer from the change to empty properties business rate relief, due to the £15,000 rateable value threshold.”

Regeneration of London’s East End
“We hope that the accelerated investment in housing and regeneration programmes will ensure the maximum positive impact on East London of the 2012 Games. The long term benefits of regenerating East London are worth far more than a fortnight of sport.  We must invest in regeneration if we are to turn the tide for the neglected Lower Lea Valley.”

London First’s three tests for the Pre-Budget Report:

1. Invest in the Future:  Increase investment in London’s infrastructure for jobs now and London and UK economic growth in the longer term

– There are unfunded but viable transport schemes ready to go.  Government should invest in projects such as the East London Line extension (Phase 2), and bring forward work to fix the Tube, both of which will provide a return on taxpayers’ money

2. To 2012 and Beyond.  Commit to ambitious regeneration for East London which is kick-started by the 2012 Games

– Build in the local roads, bridges, schools and hospitals as the foundations for resurgent communities
– Separate the cost of two weeks of sport from generations of change for the Lower Lea Valley.  Don’t confuse the budgets or their aims.

3. Government action should support London’s competitiveness

– Tax and regulation policy must support recovery, mitigating for the short-term, as well as preparing for the upturn.  Any reform of banking regulation should not damage London’s competitiveness with other world financial centres. Similarly, Government should delay plans to charge business rates on empty properties.
Notes to Editors

London First is a business membership organisation whose mission is to make London the best city in the world in which to do business. London First undertakes this by mobilising the experience, expertise and enthusiasm of the private sector to develop practical solutions to the challenges facing London. London First also seeks to persuade central and London government to make the investments that London needs in its infrastructure

London First delivers its activities with the support of the capital’s major businesses in key sectors such as finance, professional services, property, ICT, creative industries, hospitality and retail. Membership also includes all of London’s higher education institutions as well as further education colleges and NHS hospital trusts. London First members represent a quarter of London’s GDP.

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