Our Mission

Last modified: 14th January 2022

The Central Activities Zone (CAZ) is the beating heart of London’s – and the UK’s – economy, as home to 4.4% of all UK jobs and a contributor of 7.8% of UK Gross Value Added (GVA) (ONS, 2020). 

While it is unquestionable that COVID-19 has affected every part of the UK, the pandemic has had a particularly devastating impact on central London, causing a significant drop in the number of people travelling in for work and leisure and increasing outward migration. Furthermore, the cost of doing business in the CAZ is substantially higher than elsewhere in the country, with average business rates in the West End amounting to £600,000.

As a strategic economic heart for London and the UK, recovery of the CAZ will be key. 
 
It is imperative that the Government goes further to support central London businesses, permitting them to continue to innovate and to demonstrate their world class skills and services, provide jobs, growth and investment and to lead recovery - by ensuring that the right measures of support are in place. The current pandemic has shed light on the challenges global cities face, and we must not constrain or impair London’s ability to demonstrate a sustainable recovery and its role as a leading global city. 

The crisis is not over and urgent action and support is required if London in particular, and other regional cities, are to financially recover, to provide employment and to help achieve the UK’s levelling up and Building Back Better agendas. 

This complex interconnected and interdependent ecosystem is also vital for the wellbeing of those living and working in London,

This complex interconnected and interdependent ecosystem is also vital for the wellbeing of those living and working in London,

This complex interconnected and interdependent ecosystem is also vital for the wellbeing of those living and working in London,

This complex interconnected and interdependent ecosystem is also vital for the wellbeing of those living and working in London,

Priority Asks: International Travel

 Inbound tourism to the UK, pre-pandemic, was worth £28.4bn a year in exports, making it the fifth most valuable export industry and the fifth largest tourism economy in the world [1] together with contributing to Britain’s soft power credentials and to the UK’s Global Britain ambitions. As an export industry, inbound tourism can significantly support and accelerate the UK’s economic recovery from COVID-19 as it brings valuable new money into the country and supports over 500,000 jobs[2] in cities and regional economies across the four nations. It directly impacts the Government’s levelling up agenda, driving growth in regional towns, cities, coastal and rural communities. 

Whilst hugely important, domestic tourism only moves existing money around the economy, yet inbound tourism delivers £28.4 billion in incremental exports and reduced the UK’s balance of payments deficit. In 2021, domestic tourism is supporting many rural economies – however city centres, such as Manchester and London, are unlikely to fully or quickly recover without inbound visitor spend. Cities are predicted to lose £18 billion this year due to a lack of inbound tourism. The survival and recovery of over 200,000 city tourism and hospitality businesses is dependent on international travellers returning to UK towns and cities. 

Inbound travel and tourism also drives international trade and investment in the UK, whilst additionally supporting international advocacy. A successful inbound travel and tourism economy will also assist delivery of the UK’s post-Brexit trading objectives, Global Britain ambitions and is a key component of our soft power strategy.

Foreign tourism is also essential for the survival of the theatre, arts and cultural sectors particularly in London’s West End; another major contributor to the UK economy, both in terms of overall tourist spend and VAT receipts to the Exchequer. This sector has been disproportionately affected by the pandemic. The entertainment and creative sectors are imperative for London’s viability as a global city.

To meet Government targets for inbound tourism in the Tourism Recovery Plan, we need to generate £10.83bn revenue this year rather than the £6.84bn predicted by Oxford Economics. We need initiatives that generate £4bn.

Regrettably there has been effectively a multiple language “Britain is closed” banner on our much-valued international visitors’ entrance. Government help is urgently needed to ensure the survival of inbound tourism and attracting foreign visitors, including business travellers and investors, in meaningful numbers. 

CLA Asks:

    • Lock in the 12.5% VAT rate for hospitality and tourism.
      The Treasury has already seen the genuine benefit in terms of driving demand. If the UK, and London in particular, are to recover, we need to be able to ensure the UK can compete with European holiday destinations and is attractive for both domestic and international visitors. The UK is currently losing its international competitiveness. Long-term, and post-Brexit, it is crucial that the UK competes internationally, and the Government has already demonstrated that VAT is a key lever for Government to drive growth. Doing so will also enable sector businesses to create 125,000 jobs, rebuild their balance sheets, boost investment, avoid damaging price increases and accelerate the UK’s post-pandemic economic recovery.
      Hospitality in particular remains incredibly fragile, facing myriad critical issues. Rising utility bills, wage bills and food and drink prices have resulted in 13% inflationary costs which businesses are having to absorb in parallel with navigating severe supply chain issues and chronic staff shortages. Given this toxic cocktail, the most effective way the Government can support this sector would be to maintain the current lower 12.5% VAT rate for the next financial year. 
    • Restore tax-free shopping for international visitors indefinitely.
      A significant component in keeping the UK competitive for international visitors and in helping drive a recovery of tourism in London and in other major UK cities.  Such restoration will result in a substantial nett economic benefit.
    • Provide sector-specific support, such as the Tourism Export Recovery Fund presented to the Treasury on the 1 July this year. The Government’s help is urgently needed to ensure the survival of the inbound tourism sector responsible for attracting foreign tourists in meaningful numbers. The proposal is for a £45 million fund to secure £28.4 billion of exports for the Treasury, which can be viewed here.

    Central London Businesses

    We must not underestimate the capital’s economic firepower and its importance to assist in the rescue of regional economies. The Government should aid survival and recovery in the capital to fund the previously recognised and valued investment elsewhere in the country. The significant fall in central London footfall numbers (up to 95%), particularly from workers, needs to be addressed, assisting Central London and its businesses to get back on their feet and continue to make a positive contribution to the UK economy.

    CLA Asks:

      • Root and branch reform of business rates, to ensure industries share the burden equally.
        Significant reform is needed on the inequitable business rates system based on the value of bricks and mortar (a 21st century window tax). This is an opportunity for businesses, Central London’s recovery and the wider economy.
      • Provide a three-year additional revenue support package for Transport for London together with a longer-term permanent funding solution.
        To safeguard services, and to facilitate more innovative and flexible ticket models and help accelerate the return to city centre workplace. A long term, permanent funding arrangement from central Government is also needed that reflects the benefit of TfL and Global London to the wider UK economy. This funding mechanism should be comparable in scale and remit to those for our competitors- namely New York and Singapore.
      • Freeze or cut rail fares in 2022.
        To help sustain a return of office and other workers in an environmentally sensitive manner and remove a cost disincentive from commuting into Central London, supporting the green agenda.

        Measures to support economic recovery

        As we look ahead to the reopening of our economy, those businesses that survive will have been dealing with the impacts of the pandemic for two years. The impacts of job losses and prolonged periods of furlough are a growing worry for the workforce. 

        The need to support and invest in sustaining London’s global competitiveness should not be underestimated. London has consistently ranked as one of the world’s most attractive cities to live, work and do business. Its unique set of circumstances require a tailored response. Sustaining this position is key to the UK’s competitiveness and reputation, and the CAZ is a vital part of its offering.

        The loss of footfall and international travel has left many businesses either unable to open at all or unable to make a profit outside of lockdown. According to the GLA, the footfall at cultural facilities in the CAZ has fallen to around half of pre-COVID-19 levels. Even before the second lockdown, the CAZ was expected to lose out on £10.9bn in tourism expenditure in 2020. Additional support will be needed to encourage the revival of business and commerce in central London, giving long-overdue recognition to the role of arts and culture.


        A failure to act now risks the future of the UK’s economy, global status and the closure of hundreds of thousands of businesses providing jobs and livelihoods in London and across the country. Businesses bring life and heart to communities across the country but after 18 months of desperate struggle due to the pandemic, many businesses and employers are battling huge challenges. By responding positively to CLA asks the Government can assist businesses to bounce back, keep the UK and its offering affordable for customers, provide jobs, assist in levelling up the UK, Building Back Better and stimulating a sustainable recovery from the pandemic. 
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        [1] WTTC
        [2] Tourism Alliance




        PREVIOUS ASKS: To read the Central London Alliance Asks for 2021, please click here