Labour says many small businesses 'fear they will not survive Winter'

5 December 2020, 09:31

Labour leader Sir Keir Starmer during a visit to the Portsmouth Gin Distillery in Southsea, Portsmouth
Labour leader Sir Keir Starmer during a visit to the Portsmouth Gin Distillery in Southsea, Portsmouth. Picture: PA

By Maddie Goodfellow

Labour leader Keir Starmer has urged people to shop local on Small Business Saturday as research finds hundreds of thousands of small firms might not be in business by the spring.

An analysis of official data by the Opposition suggests an estimated 390,000 small businesses are worried they will not survive the next three months.

Labour said more than 520,000 small businesses have seen turnover plummet by more than half, even before the second national lockdown was imposed in England.

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It added that around one million small businesses do not have cash reserves to last beyond three months.

The party said it estimates that 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.

Shadow business secretary Ed Miliband 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."

A Treasury spokesman said: "We understand the pressure businesses and individuals are currently under, which is why we're helping them through the pandemic with a £280bn support package, which is among the most generous in the world."

"This includes grants for businesses forced to close of up to £3,000 a month, and grants of up to £2,100 per month to businesses which aren't closed but are severely affected by restrictions."

It comes amid the news that two out of three smaller firms and self-employed workers have had to stop trading at some point in the past six months because of the coronavirus crisis, new research suggests.

Covid-19 could cost small businesses up to £69 billion in total, estimated insurers Simply Business.

In a report to mark Small Business Saturday, the firm said many small business owners live in fear of the consequences another national lockdown would have on their business.

A separate study by American Express suggested that almost half of non-essential independent retailers believe the survival of their business is dependent on the sales they are able to make between reopening on December 2 and Christmas.

A record 17.6 million people supported small independent businesses on last year's Small Business Saturday, spending an estimated £800 million, said the finance giant.

Labour leader Sir Keir Starmer said: "Small businesses across the country have made a monumental effort during this crisis.

"They have stepped up when it was most needed, supporting their local communities and making huge sacrifices to help tackle the spread of the virus.

"Now we must repay them.

"This Small Business Saturday and beyond, we can all do our bit to stand by small businesses, by shopping safely where we live, including online, or ordering from local restaurants."

Michelle Ovens, director of Small Business Saturday UK, said: "Lockdown and the closure of non-essential shops has led to a compressed Christmas trading period for small retailers in a vital time for many small shops.

"We are optimistic that with shops now able to reopen and many small firms being really entrepreneurial about the tactics they use to attract shoppers - including making the most of Small Business Saturday UK - that they will be able to make up lost sales.

"Shoppers are also really keen to support small businesses more this year."