Ahead of Small Business Saturday, the Labour Party 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.
A new analysis of official data reveals an estimated 390,000 small businesses are worried they won’t survive the next three months. More than 520,000 small businesses have seen turnover plummet by more than half – even before the second national lockdown was imposed.
Labour has also revealed that approximately a million small businesses do not have cash reserves to last beyond three months. Yet the vast majority of businesses required to close have received much smaller grants from the government than they did during the first lockdown – with most receiving either just a third or half of what they received in March.
The party estimates this could mean the 44,810 hairdressers and beauty salons, 8,515 hotels and B&Bs, 5,420 butchers, 985 toy shops, 2,455 greengrocers, 1,040 bookshops, 3,250 bakeries, 2,490 breweries and distilleries, and 3,140 automotive manufacturers are at risk across the country.
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. If this proportion is replicated nationwide, this would represent around 390,000 small businesses across the country.
- 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. This would represent over a million small businesses across the country.
- 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. This would represent more than 520,000 small businesses across the country.
Ed Miliband MP, Labour’s Shadow Business Secretary said:
“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.”