Sadiq Khan has said the Government is in “listening mode” over his plea to extend the business rates holiday for another year.

After the coronavirus pandemic hit the UK, business rates for retail, hospitality and leisure businesses in England were halted until the new financial year starts in April.

In a joint submission to the Government’s business rates review, the Mayor of London has joined with councils in the capital to call for an extension to 2021/22.

It comes following fears thousands of jobs could be lost in London and across the country.

Sadiq Khan visits West End
The mayor fears jobs could be lost in the capital when the business rates holiday ends (Stefan Rousseau/PA)

Speaking to the PA news agency in central London on Friday, where he visited Air Edel Studios in Marylebone, Mr Khan said: “The indication from the Government is they are in listening mode.

“They’ve seen what countries across Europe have done because we have told them.”

He urged the Government to follow countries such as Germany, France and Spain in giving further support to businesses.

Mr Khan added: “We’ve made our observations quite clear on a cross party basis that these businesses need support.

“And actually, if the Government is serious about giving a helping hand to business, the best way to do it, is to support them during this difficult time.”

Raising concerns that thousands of jobs could be lost, the mayor’s office said a rates holiday would provide support to businesses who have suffered a drop in footfall due to the coronavirus crisis.

Mr Khan said: “Businesses across London continue to struggle from the impact of Covid-19.

“If the business rates holiday comes to an end, I worry any employers will have no choice but to make more people unemployed.

“Many large retail, leisure and hospitality businesses – accounting for thousands of Londoners’ jobs – are taking important decisions for the next financial year right now, so certainty over the business rates holiday is needed urgently.”

He also called for an extension to the business rates holiday for childcare providers, which he said are “crucial” in allowing Londoners to return to work.

The New West End Company, which represents 600 businesses in London’s shopping district, said reintroducing business rates in April 2021 would be the “final blow” for those already struggling.

Chief executive Jace Tyrrell said: “The result will be more business closures and potentially 50,000 job losses, severely diminishing London’s appeal to visitors, investors and global talent.

“We appreciate the support that the Government has given to businesses so far but it is clear that the impact of Covid-19 is going to last much longer than originally anticipated.”

Mr Khan and London Councils, which represents the capital’s 32 borough councils and the City of London, are also urging ministers to make a series of reforms to the system as a whole.

These include devolving the power to set business rates and making the system simpler for all businesses to understand.

Councillor Clare Coghill, London Councils’ executive member for Business, Europe and Good Growth, said: “Despite Government’s welcome initiatives, many businesses remain fragile, still reeling from the long-term impacts of Covid-19. There is still a need for targeted emergency support.

“Ending the business rates holiday too soon will destabilise too many companies, leading to closures, job losses and a shrinking economy both in London and across the rest of the country.”