London is a great city and will flourish with hope and stability

Karim Fatehi OBE, CE0 of London Chamber of Commerce and Industry (LCCI), talks to Sarah Dale about the challenges of 2024 and LCCI’s drive to support businesses across London to a prosperous 2025.

It was an extra special New Year celebration for Karim Fatehi.

tirelessly, along with his team, to listen to the London business community, talk to ministers and drive a positive future for LCCI members.

“It’s been a challenging 2024,” he says.

“Frankly, I would say the Government underminded the impact of the Budget on businesses. The changes in National Insurance and the Employment Rights Bill are good for job security, pay and for a good working environment, however if you put the pressure on small businesses, it has a negative effect. As it is times are really tough for small businesses and they cannot afford the extra costs of National Insurance and business rates.

The CEO of London Chamber of Commerce and Industry was awarded an OBE in the King’s New Year Honours list for services to international trade. He has already held the honour of an MBE since 2012 and is proud to have received the latest accolade.

“I have always been an advocate for international trade, especially in the past 15 months I’ve been really pushing hard on the things that matter,” says Karim, who founded United Corporation, an engineering procurement management company in the oil and gas sector in 1995.

“It is good to be acknowledged, and it shows it doesn’t matter how small you are, your contribution is noticed.”

Karim is a successful business owner and an influential and committed advocate of business in London. He took the helm of LCCI in October 2023 and since then he has worked

“Businesses are being more cautious with reduced investment and a freeze on hiring, even redundancies. Businesses will need to focus on retaining and upskilling existing members of staff but of course we also have skills shortages.

“Businesses want clarity. It’s a very tough time. When I talk to business owners, they are telling me their businesses are becoming less profitable due to rates and extra increases. Increased costs are creating cashflow problems and businesses are delaying investment in sustainability, innovation and technology. Some people’s bills are doubled. How do we protect businesses? How do we bring about hope and prosperity?

“We need to remain focused and hopeful but we need to get the Government to help us –95 per cent of businesses in the UK are SMEs and they are also the hardest hit.

“We need to work harder. We need growth, growth, growth. I tell everyone that we have to plod on.”

However, Karim says there are some positives resulting from the Budget.

“I understand the Government inherited a big deficit,” he says.

“But I’m hopeful when it comes to international trade. It was good to hear many businesses like Rachel Reeves and support her plans to boost trade. This is a positive but on the whole the Budget is a concern. The Government needs to listen to businesses. I do support their vision but it is not reasonable for SMES to go out of business or struggle.”

LCCI’s key focuses to support and grow the London economy, as set out in its Programme for Government 2024, are:

1. Promoting London as a global city and international trade

2. VAT-free shopping for international visitors

3. Arts funding in London

4. Equality, diversity and inclusion and removing barriers

5. Women and free trade agreements

6. Skills and apprenticeships

7. Police funding and business crime and the impact on London’s economy and growth

8. Business visas and immigration

9. Affordable housing in London

10. Transport links and Transport for London funding

Promoting London as a global city

The LCCI recommends that the Department for Business and Trade provides continued and targeted support for exporters and potential exporters to reach new markets and unlock opportunities for international growth.

VAT-free shopping

The removal of VAT-free shopping for international visitors is “effectively a tax on tourists” and London’s international competitiveness and attractiveness has taken a “dramatic nosedive” as a result.

The VAT Retail Export Scheme was abolished in 2020, discouraging international visitors to visit London as a shopping destination, which in turn has hit tourism, travel, hospitality, and food and beverage businesses. London is now seen as 20 per cent more expensive than its European counterparts, such as Paris and Milan, and the LCCI is lobbying for a reversal of the decision.

Arts funding

London is the third busiest city for film making in the world – behind Los Angeles and New York – and the industry contributes £18 billion to the economy and continues to grow. The creative industries generate £10 million every hour, accounting for one in six jobs in London and contributing £52 billion annually to the local economy. Cultural tourism to London alone brings in £7.3 billion per year, however, funding for London’s cultural institutions has been cut by £50 million a year for 2023-26 in favour of funding projects outside London. The LCCI is urging the Government to look for long-term funding for the arts.

Equality, diversity and inclusion (EDI)

Karim says that London’s strength as a global city is rooted in its diversity, however discrimination continues to impede the life chances of many, including those aspiring to establish businesses.

The LCCI’s report, Ethnic Diversity in Business: Removing Barriers Impeding Business Success, highlights the challenges faced by ethnic minority-owned businesses and suggests a catalogue of measures to remove barriers including in education, venture capital and procurement.

Women and Free Trade agreements

Trade agreements are essential for economic growth, increasing trade and creating job opportunities, however, despite women making up nearly half of the workforce, they face significant barriers to fully participating in international trade, such as unequal access to education, finance and markets. The LCCI recommends that the Government implements a series of measures including more support for women entrepreneurs and ensuring women are included in trade-related decision making at all levels.

Skills shortages, apprenticeship levy reform and business visas

“We need an agile training programme when we talk about skills,” says Karim.

“I believe that businesses are a crucial driver for our country post-pandemic, post-Brexit, for our economic recovery, but without access to adequately skilled workers, they will not be able to deliver the growth needed.”

The LCCI found that 60 per cent of all London firms who tried to recruit in Q1 2024 experienced difficulties.

“We have worked very hard for the apprenticeship levy reform,” he says.

"While immigration needs to be effectively managed, it is crucial to prioritise and support skilled immigration that contributes to London's growth and addresses the shortage of skilled workers. The Government should consider revising or removing restrictive immigration rules for business visas to ensure businesses can access the talent they need to thrive.”

Reducing business crime and working with the police

“We have done a lot of campaigning and worked with the police on reducing business crime and we have a very strong working relationship with the Metropolitan Police,” says Karim.

“If you have safety and reliability, it will lead to more inward investment. If we don’t engage with the police, how can we expect their support and how can they police when they are fundamentally short of officers and funding? We have to listen to each other and work together.”

Affordable housing

The LCCI’s London Business 1000 survey in 2023 found that 50 per cent of companies said the cost of housing had a “negative impact on their ability to recruit and retain workers”.

“The cost-of-living is very high in London compared to the North-east, for example, and there is always a shortage of affordable housing,” says Karim.

“I am really grateful that the Government has recognised that. We need greater provision of housing in London – and the related infrastructure and accessibility – to ensure we can get the workforce into London.”

Transport links

“We need a proper route from London to the Midlands, North and Scotland,” says Karim, who also works with Chambers across the North-east and in Kent, as well as forging links in Dubai and India.

“Across the country, we all have the same objective of growth, but London is absolutely pivotal to all destinations – across the country and globally.”

The year ahead

“We’re excited about our growth plan and have more announcements due shortly,” he adds.

“We want the Government to address all the concerns that businesses are facing and we continue to have direct engagement with the Government, stakeholders and the London Mayor, Sadiq Khan.

We are the voice of London business; we now have 10,300 businesses in the Chamber's business community".

“I’m excited about 2025 and I know we have a huge amount of work ahead of us but we are all committed and look forward to a prosperous 2025.

“London is a great city and it’s always buzzing here. It is a city of trust, which will flourish with hope and stability. We have had very turbulent times, but we are on the right path.”