In a cheerful cafe on Sutton High Street recession seems far away, as staff buzz around and customers chat.

But listen in and the talk is of “doom and gloom’’, fears over jobs and what the future will bring.

Green Tree Cafe owner Miss Sarah Rickard said she has cut her staff by 50 per cent since September and now closes on a Sunday.

Miss Rickard said she was doing her best to counter the downturn but a hike in the council’s pavement licence’s and in business rates – which have increased 30 per cent over the last four years – were not helping.

She said: “Pavement licences went up about 50 per cent in October. They want to encourage a Parisian feel to the high street, but for small businesses that sort of cost is not helpful.

“These are worrying times – it’s survival of the fittest, but hey could do more to help.’’ At Travellers Zone, staff members who did not want to be named, said they were worried about their jobs.

One said: “We have had to shorten our opening times – opening an hour later and have decreased staff from three to two.

“I’m worried we will close and I’m worried I will lose my job.’’ Just opposite, shoppers stare into an empty Woolworths, vacant offices to let dot the bottom of the street, and at British Bookshops, Sussex Stationers manager Sharne Fidler said people were spending more cautiously.

The Sutton branch of Richard Mark menswear, in the St Nicholas Centre, is to shut for personal reasons rather than financial ones, but the closing down signs that line the windows reflect a certain foreboding nonetheless.

Opposition spokesman for finance and value for money, Councillor Tim Crowley, said forecast were worrying.

He pointed to an audit committee report from December, showing an increase in the number of houses repossessed and in the number of redundancies in the borough, with monthly collections for council tax and commercial rates for 2008 at their lowest last November.

The report also showed direct debit defaults to pay council bills have increased from 640 in 2007, to 1415 in 2008, an increase of 121 per cent.

“It shows a real lack of confidence among residents,’’ he said.

“People are struggling, they are looking over their shoulder and they are wondering if they have the money.’’ In response to the recession, Sutton Council developed a ten-point plan that included a free parking offer over Christmas and which saw an extra 2,340 motorists using the multi-storeys on Thursday nights and weekends compared with the same period in 2007 – an increase of 36 per cent.

A council spokesman said while the council couldn’t change businesses rates, it had launched a claim-back campaign with 214 companies so far claiming more than £217,000.

In February and March, small firms are being invited to free workshops offering business advice and support and the council and its partners are offering redundant employees advice on work, training and finance.

Coun Crowley said that while it was good the plan was put together, it needed further refining.

But Councillor Sean Brennan, leader of Sutton Council, said the council was continuing to develop ways to support the local economy.

He said: “The council has also set up a task force of community leaders who will work together in the coming months to find local solutions to the challenging economic situation.

“We want companies to know that practical advice, support and financial help is ongoing and I urge companies to get in touch and find out how the council and its partners can help.”

However, some high street stores remained oblivious to the headlines.

At hairdresser shop Headmasters a shop assistant said her business had not felt the pinch and Bar Room Bar assistant manager Steve Hurley said it was still too soon to tell how the credit crunch would affect his trade.

Time will tell how the rest of Sutton High Street will fare.

The council response

A spokesman for the council said: “We know local businesses are under pressure during the economic downturn and we are offering practical help with a 10-point economic recovery plan.

“The cost of pavement cafe licences in Sutton town centre was restructured last year following a review and comparison with other London boroughs, which found local charges were low.

“Previously licences cost a flat rate of £528 in Sutton High Street. The new rates are on a sliding scale depending on the size of the area used for tables and cost between £600 and £900.

“We are currently looking at a range of incentives to encourage more street trading in High Street. “An extensive £1.6m regeneration of the town centre will begin later this year and help transform the length of the High Street, with the aim of attracting more visitors and businesses.”

• Join our Listen to Business campaign and get southwest London the support it needs.