June 20, 2008 | posted by Michael Baxter in London |

Six out of ten business leaders in London fear the city’s competitiveness is under threat – double the number of a year ago – or so a survey from CBI/KPMG out yesterday revealed.

Business leaders were less than impressed at reforms to non-dom taxation. Eight out of ten executives said the announcement of the £30,000 fee and the way the proposals were chopped and changed had tarnished the UK’s reputation.

The credit crunch is also afflicting companies in the capital, with four in ten respondents saying it has become harder to raise money – and many expect it will get more difficult.  Worryingly, almost one-third (31 per cent) of executives fear they will have trouble raising finance over the next six months, up from 9 per cent a year ago.

There are some positives though: despite fears over competitiveness, 90 per cent still view London as a favourable place to do business, though only 37% of respondents describe it as ‘very good’, compared to 46 per cent  a year ago.

The tube was cited as the top priority for transport investment. And nine out of ten respondents said the poor state of public transport was affecting their business.

Two-thirds (64 per cent) also said London’s roads are getting more congested, with roadworks and changes to traffic light phasings blamed as the main causes.

Seventy-two per cent of executives complained that they are currently unable to fill some skilled job vacancies – but they are hopeful the new migrant points system will help.  And though the number of employers expecting skill shortages to cause them problems before the end of the year is lower than a year ago (81 per cent), 61 per cent still fear it will happen.

Richard Reid, London Chairman of KPMG Europe LLP, said: “While huge investment is being made to modernise the tube, other programmes such as Crossrail require a definite timetable to become a reality, and further investment is required for surface rail. Transport is key to attracting and retaining staff and maintaining London’s world class status.

“Tackling skills shortages will be helped by education authorities equipping students with basic and employability skills that businesses need, not just paper qualifications.”

But, just for once, let’s finish on a positive note.  Mr Reid said: “It is worth noting that as many of London businesses are optimistic as pessimistic about the next six months.”