Ed Miliband has declared that small businesses have been “let down by shrinking government grants” during Covid as analysis shows that 390,000 small businesses are worried they will not survive the next three months.
Speaking ahead of ‘Small Business Saturday’, the Shadow Business Secretary responded to new data from an Office for National Statistics survey that revealed over 520,000 small businesses have seen their turnover fall by more than half.
The research found that 15% of very small and 9% of small businesses have low or no confidence of surviving the next three months, and that 28% and 32% respectively currently have cash reserves that will not last three months.
Miliband commented: “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 personal protective equipment 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.”
The call from Miliband follows Anneliese Dodds this week urging the government to use the £1.3bn business rates relief returned by supermarkets to support businesses and individuals to get through the winter.
Labour has repeatedly called on the Prime Minister and Chancellor to abandon what party figures have described as a “one-size-fits-all” approach and pursue a more targeted attitude to business support in the pandemic.
It warned on Monday that the latest business grants schemes to be introduced by the government in the pandemic will “level down” the poorest areas and “betrays some of the most deprived communities under the toughest restrictions”.
The party highlighted that through the ‘additional restrictions grant’, which makes a one-off £20-per-head payment to councils, some of the poorest areas will receive the same or less funding than the richest despite being set to go into higher tiers.
It also pointed out that the £1,000 payment announced by the Prime Minister last week for ‘wet-led’ pubs in Tiers 2 and 3 does not make up the shortfall between the local restrictions support grant and the original small business grant.