London Mayor Sadiq Khan has backed the demand for increasing the rateable value threshold for COVID-19 business support grants.
In a letter to Chancellor Rishi Sunak and Business Secretary Alok Sharma, Khan shared the concerns that businesses would need additional and ongoing support to survive the pandemic shock to the economy.
He called for further discretionary funding for local councils, rent compensation scheme and improved access to grants for small and medium-sized businesses.
Khan pointed out that the Small Business Grant Fund (SBGF) and Retail, Hospitality and Leisure Grant Fund (RHLGF) have only reached 26 percent of properties in inner London boroughs, compared to 50 percent across the rest of England, with the number still falling to 6 percent in the City of London and 12 percent in the City of Westminster.
“Nearly 30,000 struggling London businesses would have received grants if they were located anywhere else in the country,” he said. “These businesses are falling through the cracks, because of the value of their landlord’s assets, rather than the specific burdens they face.”
Khan urged the government to raise the rateable value thresholds for London-based applicants to £25,000 for SBGF and £150,000 for RHLGF with retrospective effect.
He said raising the threshold of RHLGF to £150,000, from the present £51,000, would protect an additional 13,800 businesses.
Campaigners have earlier pointed out that around 55,000 businesses across England and Wales were currently unable to access the RHLGF due to their business rates valuation falling between £51,000 – £150,000.
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The #RaiseTheBar campaign estimates a maximum of £1.36 billion in government support is needed to enable the RHLGF to support all 54,638 businesses falling within a business rates threshold of £51,000 to £150,000.
Khan said the two changes he proposed are estimated to cost around £750 million.
Recently, 86 Conservative MPs have written to the chancellor calling for the business rates threshold to be increased for business support grants.
Earlier, Shadow Chancellor Anneliese Dodds has written to the chancellor, detailing the urgent need to raise the threshold above £51,000 due to businesses operating in high-cost areas. Lucy Powell, MP for Manchester Central, has called for the business rates threshold to be increased in Prime Minister’s Questions on 22 April.
The campaign has also been able to garner support within the government, with Foreign Secretary Dominic Raab passing the request onto the Treasury following local concern in his constituency Esher and Walton.
Health Secretary Matt Hancock has committed to discuss the need during the daily government briefing on 27 April.
