A recent poll carried out by the Federation of Small Business revealed that the cost of both commercial and residential property is causing worry among the owners and managers of small firms.
More than half (56%) of the organisation’s 7,000 London members cite the rising cost of commercial space as a concern.
London’s soaring residential property market is also an issue for smaller businesses with 22 per cent of poll respondents saying the boom “has had a negative impact” on their ability to retain staff and a further 1 in 10 saying the need to increase workers’ pay to meet rising rents is limiting their ability to take on extra staff.
The poll’s findings helped inform a new manifesto published by the FSB today which calls on London’s next Mayor to lower the cost of doing business in the capital, boost investment in faster broadband and other infrastructure and secure London’s status as a major driver of the UK economy.
The manifesto also calls for a “root-and-branch reform” of the capital’s transport charging schemes, a new definition of affordable housing which is based on earnings and the creation of a new Deputy Mayor post with responsibility for small and micro businesses.
Sue Terpilowski OBE, London Policy Chairman at the FSB, said: “The spiralling cost of housing and business premises is a significant barrier to growth, and we are starting to see a ‘flight from the centre’ on the part of established independent small businesses – exactly the type of business that makes London such a special and vibrant place.
“The FSB are calling on the Mayoral and London Assembly candidates to say ‘ibacksmallbusiness’ and understand that they are the very fabric of our communities.”
Conservative mayoral candidate Zac Goldsmith, Liberal Democrat Caroline Pidgeon, Labour’s Sadiq Khan and Green party hopeful Sian Berry have all welcomed the FSB’s manifesto and pledged their support for the sector.
Mr Goldsmith commented: “London is a big city powered by small business – and as Mayor I will make supporting those businesses at every opportunity and as a priority.
“Small businesses are agile and entrepreneurial but they are also more exposed to the escalating cost of doing business in London – with house prices in particular hitting employees hard. So I look forward to working very closely with the FSB.”
“What I especially take from this manifesto is the huge concern that most small businesses in London have about the cost of housing,” said Ms Pidgeon. “The need to tackle the shortage of affordable housing in London is vital for both social and economic reasons.”
The LibDem hopeful said she disagreed with the FSB’s support for expansion at Heathrow airport but added: “On most issues, such as making is easier for small businesses to break into winning public sector contracts, improving broadband and introducing smarter Congestion Charging and improving London’s transport network we are very much on the same page.”
Mr Khan said: “I know that for small businesses, and those who run them, the cost of living and doing business in the capital can be a major barrier.
“It’s clear that the housing crisis is now a serious concern for London businesses. Not only does it make it more difficult and expensive to find the right staff, but it’s also having the knock on effect of making commercial rents increasingly unaffordable.
“I’ll make tackling the housing and workplace crisis my top priority as Mayor. And I’ll work with business to develop the infrastructure and skills that we need to support business now and in the future.”
Ms Berry commented: “Small and medium-sized businesses are London’s economic engine, generating more jobs and keeping more of their profits circulating in the local economy.
“Smaller firms already provide half Londoners’ jobs but small business owners rightly complain that high housing costs make it much harder for them to recruit and retain staff.”
“Housing is my top priority too. The current failure to provide new, truly affordable homes is driving people out of their homes and out of our city. If people can’t find decent places to live near where they work, it stands to reason that businesses will suffer.”
