Sunday 27 September 2020 / 10:35 PM Lucy Powell

Sunak’s scrap heap – more than a million jobs at risk in sectors the Chancellor has dismissed as “unviable”

Sunak’s scrap heap – more than a million jobs at risk in sectors the Chancellor has dismissed as “unviable”

Labour has today accused the Chancellor Rishi Sunak of consigning whole sectors of the economy, which generate billions in tax revenue and employ millions of workers, to the scrap heap.

In his winter economic plan the Chancellor failed to mention businesses that are not able to operate, because they are either shut down completely or trading with hugely reduced capacity including: the weddings industry, events and exhibitions, major parts of the night-time economy, festivals, sports venues and theatres. There was no acknowledgement at all about their plight or the fact that they will be forced to remain fully or mainly closed for the next six months.

New analysis by the Labour Party, using Office of National Statistics employment data shows that more than a million workers are in these sectors simply dismissed as “unviable” by the government. None of the additional measures announced by the Chancellor last week will assist them. The government’s Job Support Scheme is only open to those employers who offer their employees at least a third of their usual hours – impossible for those industries still closed. The scheme is also fundamentally flawed because, for every two members of staff, it is cheaper for a company to bring back one member of staff full-time and fire the other, than to have two workers working part time.

The failure of the government to implement an effective Test, track and trace system means that these businesses do not have any idea of when they can safely reopen.

The businesses and workers on Sunak’s scrap heap 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 cinemas – still shut-down or operating at reduced capacity – employing 90,000 people.
  • 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 UK’s night life industry – including 69,000 people employed in nightclubs, and 428,000 people employed in pubs and bars. These businesses are either still shutdown or operating at much reduced capacity and now hit by a 10pm curfew.
  • The sports industry – employing 369,000 people.

Lucy Powell MP, Shadow Minister for Business and Consumers, said: 

“The Chancellor is consigning whole sectors of our economy to the scrap heap, damaging lives and livelihoods, and threatening the recovery. The failure of Ministers to ensure an effective Test, Track and Trace system means that many businesses have no idea when they can reopen. The decision to shut these firms out of the Job Support Scheme adds insult to injury.

“Labour has called for the government to come forward with an effective plan to recover jobs, retrain workers and rebuild businesses. This isn’t it. Even for those who can access it, the Job Support Scheme is badly designed and could lead to a wave of job losses, because the Chancellor’s sums do not add up for businesses. He must think again, before the jobs crisis reaches tipping point.”

Shadow Culture Secretary Jo Stevens said:

“The UK’s cultural sector is a critical part of our national identity – not to mention a valuable part of the economy.

“These are skilled, specialist jobs in an industry that had been growing until the covid crisis hit.

“So far the government has promised money to prop up our theatres and concert halls but it’s the people who work in them who are suffering and who are excluded from government help. The sector is braced for a winter of further job losses.”