Great Eastern Street London from Shoreditch High Street

Representatives from businesses big and small will tomorrow appear before the London Assembly to discuss the issues facing retailers on local high streets in the capital.

With shop closures on already troubled high streets on the rise due to the recession, the Assembly’s Planning and Housing Committee is investigating what progress has been made on implementing planning policies to support small retailers.

There are almost 35,000 small retailers in London, between them providing more than 100,000 jobs. What does the future hold for these crucial elements of London’s economy?

Guests including Tesco and the Federation of Small Businesses will join representatives from two London boroughs to face questions including:

• - What are the benefits of, and the main threats to, small independent retailers?
• - Can chains and small shops co-exist in the same local shopping street?
• - Have shopping patterns changed so much that, inevitably, the days of the small shop are numbered?
• - Does the planning system do enough to help local councillors support small shops if they want to resist schemes for larger convenience stores?
• - What more could the Mayor do to support small shops through the London Plan?

Invited guests:

• - Nick Winch, London Policy Manager, Federation of Small Businesses
• - Emma Reynolds, Government Affairs Manager, Tesco
• - Councillor Tim Ahern, Royal Borough of Kensington and Chelsea
• - Jo Hammond, Town Centre Initiatives Manager, Royal Borough of Kensington and Chelsea
• - Stephanie Butcher, Brixton Town Centre Director, Brixton Town Centre Initiative

The Planning and Housing Committee meeting will take place at 10am on Tuesday, 10 November in Committee Room 5 at City Hall (The Queen’s Walk, London SE1).

Members of the public are invited to attend. The meeting can also be viewed via webcast at: http://www.london.gov.uk/assembly/webcasts.jsp

The findings of the review will form the Assembly’s contribution to policy development as part of the London Plan review process from now until the Examination in Public in the summer of 2010. The Committee will publish a full report of its findings early next year.

Retailers can expect the worst of the recession to hit in 2010 with over 5,000 retailers in the UK predicted to go out of business. Source: Industry Watch report by BDO Stoy Hayward LLP(2009); http://www.bdo.uk.com/bdo-stoy-hayward/live/news/2009/over-5-000-retailers-to-go-out-of-business-next-year.html

A small retailer can be defined as one that employs up to ten people; another common definition is less than 3,000 square feet in size.

In London in 2007 there were 34,708 small retailers employing 102,905 people. Small retailers account for 87 per cent of all retailers in London. Source: Office of National Statistics (2007): Annual business inquiry

Together, the reports represent the most ambitious mapping exercise of business growth in the UK, mapping the UK’s high-growth firms over almost a decade. The analysis reveals that just 11,500, or six per cent of UK businesses with 10 or more employees are classed as ‘high-growth’ companies. This small number of businesses has generated around half, or 54 per cent, of new jobs (1.3 million out of 2.4 million new jobs created by all existing businesses with 10 or more employees in the last three years).

The reports also reveal that these ‘super companies’ thrive across the country. The North West, Scotland and the East of England each host a high share of high growth firms, closely followed by the south West, Yorkshire and Humberside and the West Midlands. Almost a third of high-growth firms are located in Greater London and the South East.

These high-growth firms are packing a real punch as powerful generators of employment:  Jonathan Kestenbaum CE of NESTA

The UK also shows a healthy balance of high-growth firms across sectors, not only in high-tech industries. All major UK sectors contained between four and ten percent of high-growth firms. However, the balance between different sectors does appear to reflect trends in the economy in the period: the sectors with the highest proportion of high-growth firms were financial services (over nine per cent) and real estate and business services (around eight per cent), while the lowest share was found in manufacturing (three to four per cent).

Commenting on the research, Jonathan Kestenbaum, NESTA’s Chief Executive says: “These high-growth firms are packing a real punch as powerful generators of employment and revenue for the economy. This has important ramifications for policymakers who must shift their focus towards understanding how to maximise these critical businesses.’

The reports also found that:

• The UK had one of the largest shares of high-growth firms among OECD countries in 2002-2005. The UK is ahead of the US in terms of proportion of growth firms in a variety of sectors, in particular financial services, but not in manufacturing.
• Innovation drives growth: A common trait amongst high-growth firms is innovation. High-growth firms are disproportionately innovative, and it is this innovation which appears to cause their growth.
• It’s not just about start-ups: Although young firms are more likely to be high-growth, the majority of high-growth firms (70%) are at least five years old. Still, young high-growth firms are responsible for a fifth of the jobs created by high-growth firms.

The mapping exercise has paved the way for NESTA’s next tranche of work which will analyse the levers of innovation and growth, focussing on what tools are at the government’s disposal to encourage innovative growth.

• The OECD definition is those companies with 10 or more employees which experience employment growth averaging 20% or more per year over a three year period.
• Moreover, this 6% of high-growth firms accounts for 49.5% of all the new jobs created by existing businesses in the UK (including those jobs created by microenterprises – businesses with fewer than 10 employees) over the six years considered in this study, or 43% in the past three years

Yet again London leads the way as the number one city for business – Boris Johnson

London was ranked the number one city for access to qualified staff and markets, for internal transport and external links and the number of languages spoken.

The Mayor said:

“Yet again London leads the way as the number one city for business. All these recent surveys make it crystal clear that the world’s attention is focussed on our capital, offering it an extremely bright future. We are working tirelessly to promote London as the top business and tourist destination and will continue to set the benchmark.

“We are pushing ahead with major infrastructure improvements, like Crossrail and the Olympics, and delivering programmes to increase the skills of our workforce so that companies investing in London have a pool of talent ready to employ. Therefore I urge all international and European businesses who want a base in the world’s best city for business to get in touch”.

European Cities Monitor is based on interviews with senior managers and board directors in charge of location for 500 of Europe’s largest companies. From this research it produces an overall ranking of which European city is considered by the business community to be ‘best for business’ and the ‘best city in which to locate a business today’. In addition to the overall ranking, 34 cities are ranked against a number of criteria such as quality of life, telecommunications, access to markets, availability and quality of staff, cost of office space and transport links.

London Councils’ Chairman Councillor Merrick Cockell

The government’s revaluation of business rates will prove hugely damaging to businesses in the capital as they try to recover from the impact of the recession, London Councils has warned.

In March this year, London Councils’ Chairman Councillor Merrick Cockell wrote to the Chancellor Alistair Darling, to warn him of the crippling effect that business rate rises could have on business in the capital – particularly during the recession.

One of London Councils’ chief concerns centred on the business rate revaluation, details of which have been revealed this week by Communities and Local Government.

Councillor Cockell warned the Chancellor that the rate revaluation would be flawed because it would be based on over-inflated commercial rental values dating from April 2008 before the recession began.

Since then, the capital has borne the brunt of the downturn and commercial rents have fallen considerably. However, businesses in the capital now will be forced to cope with rate rises set by an arbitrary – and artificially high – figure which bears little relation to the current rental values.

Forcing London’s small businesses to pay such high business rates as they struggle to come out of a recession will set back the capital’s recovery, and in all likelihood, prove damaging to businesses around the country.

London Councils’ Chairman Councillor Merrick Cockell said:

“Forcing London’s businesses to pay rates based on pre-recession values is short-sighted. The capital has already borne the brunt of the recession and introducing inflated rates at this time will really hamper their recovery.

“London remains the engine room of the British economy. If you prevent the capital’s businesses from recovering, the rest of the country will soon suffer. The Chancellor must urgently reconsider the impact of the business rate revaluation on the country’s economic wellbeing.”

The Mayor believes that proposals for an EU Directive to regulate the alternative investment market such as European hedge funds, could see the London sector move to more attractive bases like New York, Singapore, Hong Kong, and Geneva. Were this to happen, the UK would be denied the billions in tax revenues raised by the sector that pay for major infrastructure improvements and vital public services across the country.

At a crucial meeting with the Commissioner for Internal Market and Services, Charlie McCreevy, who is responsible for regulation of financial services, the Mayor will underline the huge impact that the current EU draft directive would have by seriously weakening London as the main European marketplace for hedge funds, private equity and venture capital. It would also substantially reduce the choices available for investors, put up protectionist barriers around Europe, and give a huge competitive boost to financial centres outside the EU – to London and ultimately Europe’s disadvantage.

The Mayor said: “In London alone, the private equity and venture capital industry directly employs around 7,000 people and we estimate a further 35,000 people are employed directly and indirectly by hedge fund managers. I have always said I’m in favour of proportionate regulation, where necessary, and that this industry must learn from the mistakes of the past and work to put its reputation beyond dispute. However, I strongly feel that this draft directive should be amended to ensure that we do not cut off a vital supply of investment funding at a time when the economy needs it most.

“The directive as it is currently drafted will have enormously damaging consequences for London, for the UK, and for Europe too. There is no suggestion or evidence that investment funds were in any way to blame for the financial crisis and it is difficult to see the justification for this level of regulation. This is the message I bring with me today from London and I’m confident that we’ll get a fair hearing in Brussels”.