Despite the Government’s rhetoric around extending the job support scheme for shut-down businesses, in reality the changes will not apply to the majority of shut-down sectors, putting close to one million jobs at risk.
Of more than one million jobs in shut-down and severely restricted sectors, only 73,250 people – those employed in nightclubs, and those in theatres or live music venues in Scotland and Wales – stand to benefit from the extension of the job support scheme. That’s 6.5 per cent, or less than one in every 15 jobs.
The small print in the Government’s announcement states that only businesses ‘legally’ closed because of coronavirus will benefit from the new economic measures.
Businesses shut in all but name because of strict public health measures, reduced capacity and trading include sports clubs, events, conferences, live music venues and theatres in England, cinemas, the wedding industry, and the many suppliers who will face the knock-on impact of closures but are not legally closed themselves.
Labour welcomes the climbdown on support for nightclubs, one of the only types of business facing a legal closure across the UK, but is issuing a fresh call to the Government to not write off these jobs and sectors as “unviable”.
The businesses and workers the Chancellor has dismissed as “unviable”, shut in all but name, that will not benefit from the JSS extension include:
- The events and conferences industry – including 142,000 event caterers, 11,000 exhibition organisers, and 18,000 people running conferences. The Events industry generated £70 billion of economic impact in 2019, with the exhibitions sector alone creating £11 billion.
- The creative, arts and entertainment sector including theatres and live music venues in England and cinemas – still shut-down or operating at reduced capacity – employing 85,750 people. Excludes theatres in Scotland and theatres/live music venues in Wales, which are legally closed or banned from having any audiences.
- The wedding industry – Sector bodies estimate that there are 500,000 people working in the industry and associated supply chains including caterers, florists, photographers, dressmakers, beauticians, and many more. The industry has been hit by new restrictions: the number of wedding guests has been halved from 30 to 15, which will hit at least 70,000 weddings. It has been estimated the UK’s wedding industry has already lost an estimated £4.8bn as a result of coronavirus, with 127,000 nuptials postponed to 2021.
- The sports industry – employing 369,000 people.
The above does not include those in supply chains, who will also be impacted by closures and restrictions. The majority of these businesses are likely to fail to meet the one-third threshold for access to the much less generous support of the original formulation of the Job Support Scheme, which requires major employer contributions and therefore risks mass redundancies.
Shadow Business Secretary Ed Miliband said:
“The Government has been forced into a climbdown about the principle of supporting shut-down, so-called “unviable” businesses and jobs.
“But there are massive holes in the new safety net. Businesses including weddings, theatres, cinemas, events, and many suppliers will still be left out on a technicality. They are not legally closed but they’ve been forced to shut in all but name.
“Ministers must urgently rethink their damaging sink or swim approach which consigns whole sectors of our economy to the scrapheap.”