New analysis shows high street still under strain in the North East and Cumbria as over 329,000 furloughed workers start losing 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
- 7% of businesses in the hardest hit sector still report being temporarily closed
- 329,500 furloughed workers in the North East begin losing support in a matter of hours
New analysis by the Labour Party shows many businesses in the North East and Cumbria 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 24% in Cumbria, 34% in Middlesbrough and 42% across Tyne and Wear, compared to pre-pandemic levels.
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 North East a P45;
- 329,500 people have been furloughed, equivalent to 30% of the workforce
- 58,700 workers in the food and accommodation, equivalent to 74% of the workforce
- 16,200 workers in arts, entertainment and recreation, equivalent to 71% 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.