More than a third of a million small businesses may not survive through the winter, Labour has warned.
Analysis of official figures by the party’s shadow business secretary Ed Miliband suggested that as many as 390,000 small businesses are worried that they will not make it to the spring because of losses caused by the coronavirus pandemic and lockdown restrictions.
And around 1 million do not have cash reserves to last beyond three months, with some 16 per cent of the total saying that they have no reserves left at all.
More than 520,000 small businesses had seen turnover plummet by more than half even before the second England-wide lockdown began in November, said Labour.
Labour said the figures, taken from an Office for National Statistics business survey, suggested that businesses at risk of failing include 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
Speaking ahead of Small Business Saturday this weekend, Mr 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 spokesperson 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.”
The ONS Business Impact of Coronavirus survey found that:
– 15 per cent of very small and 9 per cent of small businesses have low or no confidence of surviving the next three months.
– 10 per cent of very small and 6 per cent of small businesses had no cash reserves, and a further 28 per cent of very small and 32 per cent of small businesses had cash reserves to last them for less than three months.
– 20 per cent of very small and 16 per cent of small businesses saw turnover fall by more than 50 per cent before the second national lockdown was imposed.
