Baroness Couttie is Leader of Westminster City Council and Chairman of The West End Partnership.
It is imperative, as Britain starts the process to leave the European Union, that we support and encourage those parts of our nation’s economy that have the opportunity to benefit from the significant changes that are about to occur.
London’s West End is one such area and it brings with it a model for other major city centres throughout the UK. The West End is already the powerhouse of Britain’s economy. This small district at the heart of London produces more value each year for Britain than The City and as much as the whole of Wales.
In just six hectares, the West End generates 15 per cent of the entire economic output of London and three per cent of the whole country’s.
This means jobs, economic growth and massive tax returns for the Treasury. Our one borough, Westminster City Council, produces eight per cent of the total business rate income for England and Wales.
There are some positive signs that the West End can do even better post-Brexit because of an influx of tourists. Already we have seen retail sales boom as international tourists take advantage of the fall in the value of the pound.
But the West End will only reach its full potential if it continues to invest in its infrastructure, public realm, and business developments so that it retains its position as the world’s top visitor and shopping destination against increasing global competition. The pioneering way in which the public and private sectors have come together to deliver this in Westminster is a model for regeneration in other city centres in England and Wales.
Tonight I will be speaking at a Parliamentary reception held by New West End Company, the Business Improvement District that brings together over 600 major retailers and property owners from Oxford Street, Bond Street, and Regent Street. Together we are promoting a new form of Tax Increment Financing (TIF) which, if approved by the Treasury, could be used to release much needed regeneration funds.
The West End Partnership, which pulls together public bodies, private sector, and the local communities, has created a costed plan of 19 major infrastructure, public realm, and environmental improvement schemes amounting to over £800 million. At the very least these are needed to accommodate safely and comfortably the additional 60 million visitors expected in the West End when the new Elizabeth Line opens in 2018. But more importantly, they use this once in a generation new transport opportunity to create a district that will be one of the best in the world, not just for international visitors but for Londoners and people across the whole of the UK.
Already we have identified over £400 million of the costs from both public and private sources. Our TIF scheme would allow us to raise the additional £409 million, funded over 15 years by the increase in business rate income, not from new buildings but from part of any increase in the value of existing properties caused as a direct result of this investment.
In relative terms the amount we are seeking to finance through the TIF is very small. Every year Westminster City Council raises over £1.8 billion in business rates. A massive 96 per cent of that is retained by the Treasury to distribute to other authorities around the UK. We keep only four per cent. The West End Partnership is seeking to retain just £40 million of that £1.8 billion each year to deliver this transformation.
And the benefit to the UK economy would be enormous. Over the 15 year period this investment will generate a net increase of £12.3 billion of additional value and over £3.8 billion of extra tax revenue for the Treasury.
Tonight’s Parliamentary Reception is an opportunity to showcase this new way of funding city centre redevelopment. If the Chancellor accepts our proposals then we hope that many more city centres will look at this model to grow their economies and take advantage of new opportunities as they arise.