Sue Terpilowski is managing director of Image Line and also FSB Policy Chairman. Using her dual role she was a leading speaker at the Bank of England-Greater London Agency Inflation Report Economic Briefing at the end of last year. Her key note address at the November quarterly inflation meeting held by the London division of the Bank of England showed that London businesses confidence is down. It also showed signs that economy in London has lost a significant amount of momentum in recent months, amid financial market volatility and mounting concerns over the state of the world economy.
With a real insight into how London business works, Sue pointed out that economic growth across 2016 as a whole looks set to be discernibly weaker than in 2015, with some significant challenges for small businesses. Just over 57% of businesses have seen an overall increase in the cost of running their business operations in the past quarter compared to 13% who have seen a decrease. The cost of being a London business is now becoming a significant barrier to growth and companies taking on new staff. One of the key factors that are now making the cost of doing business significantly higher is the forthcoming business rates increases that London firms will to endure. The 2017 revaluation estimates suggest rents will increase by 30 per cent or more, making the difference between London and the rest of the country even starker.
Many of the largest increases in rents will be in the areas slightly outside the West End where demand has increased but space has been lost such as southern Hackney, Spitalfields and the Silicon Roundabout area where small start-ups are already being displaced by big business. The FSB is calling on the Chancellor to create an increased inner and outer London Small Business Rate Relief threshold that reflects the specific problems faced by small businesses in the capital. Sue said, “In inner London we believe the threshold should be £20,000 RV for 100 per cent relief tapering to £23,000. In outer London where rateable values have increased by a lower percentage, we believe the threshold for 100 per cent relief should be set at £15,000 tapering to £18,000. We have written to all MPs in London, asking them to lobby the Chancellor in the run up to the Autumn Statement and are urging them to support our campaign for fair #londonbisrates”
Ending on some good news, exports saw 12% net gain over the quarter and members have started to employ with 7% net balance increase over the quarter.
*Sue Terpilowski OBE is one of the most recognised figures in the FSB in London and has been advising and commentating on business for more than a decade.