Labour has revealed that many of the small businesses reopening this week may not make it to Spring because of government failure to get a grip on the virus and shrinking government support.
This comes at a time when the vast majority of businesses required to close have received much smaller grants from government than they did during the first lockdown – with most receiving either just a third or half of what they received in March.
The analysis of the ONS ‘Business Impact of Coronavirus’ survey shows:
- 15% of very small businesses and 9% of small businesses have low or no confidence of surviving the next three months.
- 20% of very small businesses and 16% of small businesses saw turnover plunge by more than 50% over a fortnight survey period, before the second national lockdown was imposed.
- 10% of very small businesses and 6% of small businesses had no cash reserves, and a further 28% of very small businesses and 32% of small businesses had cash reserves to last them for under 1 month to 3 months.
Stephen Morgan MP, Member of Parliament for Portsmouth South said:
“Shops, pubs and restaurants, hotels and hairdressers, beauty salons and suppliers, breweries and bakeries, and many more small businesses of all kinds are the beating heart of communities across the country. They’ve adapted brilliantly in tough circumstances but many are struggling and facing a serious cash crisis after eight months of difficult trading conditions.
Many small businesses reopening this week may not make it to Spring because of the Government’s irresponsible choices, as new analysis reveals an estimated 390,000 small businesses are worried they won’t survive the next three months.
That’s why I will continue to stand up for our city’s small businesses and call on Ministers to protect businesses and save jobs, by setting out a proper plan to support businesses through the crisis”.
Labour are calling on the Government to recover jobs in every part of the country, retrain workers with an emergency programme providing help right now, and rebuild business with a support package that reflects the level of business need and severity of restrictions in different areas.
Labour’s Shadow Business Secretary Ed Miliband added:
“Small businesses are the beating heart of towns and cities across the country – shops, pubs, manufacturers, salons, suppliers and all those that make up the vibrant fabric of our communities.
Small businesses have stepped up during this crisis, whether helping to manufacture PPE and ventilators, offering free meals for children during half term, or changing how they work to keep people safe.
But they’re facing a cash crisis and being let down by shrinking government grants which simply won’t cover their rents and overheads. Unless Ministers change course we’ll see hardworking businesses go bust and high streets crumbling before winter is through.”
