New analysis shows high streets are still under strain in the West Midlands as 820,200 furloughed workers start losing Governemnt support in a matter of hours.Analysis released today by the Labour Party shows:
- Footfall for key high street businesses is still down 40% on pre-pandemic levels in the UK
- 43.7% of businesses in the hardest hit sector still report being temporarily closed
- 820,200 furloughed workers in the West Midlands begin losing support in a matter of hours
New analysis by the Labour Party shows many businesses in the West Midlands still face significant challenges due to coronavirus.Google mobility data shows that footfall for retail and recreation businesses, including restaurants, cafes, museums and cinemas, is down 42% in the West Midlands compared to pre-pandemic levels. Meanwhile, footfall on public transport and around workplaces is still down 43% and 13% respectively.Meanwhile, the latest ONS data shows some firms have still not reopened, whilst a large number of those that have report lower turnover.A fifth of businesses in the food and accommodation sector have still not been able to reopen, including nearly 30% of SMEs. 43% of businesses in the arts, entertainment and recreation sector are also still temporarily closed, including nearly half of SMEs.Meanwhile, of those that have opened, 84% in food and accommodation and 72% in arts and entertainment report reduced turnover from pre-pandemic levels.In under 24 hours, these firms begin losing support from the Job Retention Scheme and will have to start meeting some of the cost of non-working hours for any retained employees (either fully or partially furloughed).This change risks handing furloughed workers in the West Midlands a P45;
- 820,200 people have been furloughed, equivalent to 32% of the workforce
- 120,200 workers in food and accommodation services, equivalent to 74% of the workforce
- 33,000 workers in arts, entertainment and recreation, equivalent to 63% of the workforce
Labour is calling on the government to reverse course and extend the furlough scheme so that it supports jobs in the worst-hit sectors and targets aid to struggling industries.This would put the UK in line with other major developed democracies, with many extending their versions of the Job Retention Scheme or similar wage subsidy schemes:
- France announced in July that their emergency wage subsidy scheme would operate for up to two years.
- Germany already benefited from an existing wage subsidy or ‘short-time’ work scheme, introduced after the financial crisis to prevent unemployment during downturns. The scheme was expanded in March, with these changes lasting until the end of the year. Workers can receive a subsidy for up to a year, meaning the government will be subsidising wages well into 2021.
- Australia recently announced that its Job Keeper wage subsidy scheme would be extended until March 2021 for the worst affected firms. The scheme was due to end in September, and is still open to new claims.
- Ireland announced last week that its temporary wage subsidy scheme would remain in place until March 2021.
Anneliese Dodds MP, Labour’s Shadow Chancellor, said:“The Chancellor’s refusal to abandon his one-size-fits-all withdrawal of furlough is a historic mistake that risks a python-like squeeze on jobs in the worst-hit sectors. The reward for months of hard work and sacrifice by people in the West Midlands cannot be a P45. “It’s not too late for the Chancellor to see sense, change course and support the businesses and sectors that need it most. But even if he does, there is still much to do.“That’s why Labour is today launching the Jobs Jobs Jobs campaign – to offer concrete, constructive proposals that would protect the economy and people’s livelihoods in the West Midlands. “The government should back viable businesses that are still impacted by Coronavirus, support the self-employed and come up with a plan to drive job creation as we emerge from the pandemic.“And it must ensure our NHS and care services are fully prepared for a second wave – because we won’t recover from this economic crisis until the government gets a grip on the health crisis.” Liam Byrne MP, Shadow West Midlands Mayor, said:“We need to pull together now like never before to get back on our feet.“But this fresh evidence just underlines how Government must step up to make sure our high streets do not become another casualty of Covid.”