Preet has written to the Chancellor, Rishi Sunak MP, in response to his Winter Economy Plan and on behalf of thousands of her constituents whose jobs are at risk as the furlough cliff-edge fast approaches.
Rishi Sunak has dismissed workers and businesses that are currently shut down or operating at hugely reduced capacity as “unviable” – even though they are doing the right thing and following government guidance to help tackle the coronavirus.
In her letter, Preet says:
"I have since been flooded with messages from constituents who work in sectors that cannot reopen and whose jobs will not survive the winter. According to your insinuation, that businesses that do not stand to benefit from the new measures are therefore ‘unviable’, the wedding industry, events, exhibitions, clubs, pubs, festivals and arts and sports venues have little role to play in the UK’s post-Covid economy. In my constituency, this puts a chilling 1,830 jobs at risk. These sectors contribute hugely to our local culture and economy, and it will be a mark of incompetence for the Government to consign swathes of good jobs and businesses to the scrapheap."
You can read the letter in full below.
Letter to the Chancellor in response to his Winter Economy Plan
I am writing to you in response to your Winter Economy Plan and the new public health measures that the Government has brought in both locally and nationally as it loses grip on the epidemic.
In your recent statement, you announced that the Job Support Scheme to replace the furlough scheme would only be open to those employers who offer their employees at least a third of their usual hours – impossible for those industries that are still closed.
I have since been flooded with messages from constituents who work in sectors that cannot reopen and whose jobs will not survive the winter. According to your insinuation, that businesses that do not stand to benefit from the new measures are therefore ‘unviable’, the wedding industry, events, exhibitions, clubs, pubs, festivals and arts and sports venues have little role to play in the UK’s post-Covid economy. In my constituency, this puts a chilling 1,830 jobs at risk. These sectors contribute hugely to our local culture and economy, and it will be a mark of incompetence for the Government to consign swathes of good jobs and businesses to the scrapheap.
Yesterday, the CEO of UKHospitality told MPs that the toxic cocktail of the 10pm coronavirus curfew, local lockdowns, rent debt and inadequate support will cripple muchloved venues. Nationwide, the hospitality industry still has 900,000 staff on full furlough and 400,000 on part-time furlough. A survey of their members late last month (before the introduction of new restrictions) predicted a staggering 560,000 extra redundancies by the end of 2020.
This is a dire warning which underlines the threat to jobs and livelihoods if the Government doesn’t wake up to what a jobs crisis at this scale will mean. The hospitality industry closed to keep us safe, was reopened to help the economy, and now faces restrictions on capacity and operating hours because the Government has failed to control the virus.
In the early days of the pandemic in Birmingham, the exhibitions sector stepped up to support the NHS by giving up vital floor space to create the Nightingale hospital, which is now sitting empty awaiting support and clarity about what comes next. This sector is now on the brink of collapse following the Prime Minister’s announcement that they will need to remain closed for at least a further six months. This coming just weeks before they were set to reopen, having already spent thousands preparing to get Covid-secure.
As you know, the arts is another sector that has been severely affected by the pandemic, with nearly two thirds of jobs still furloughed and this little changed from the peak of the crisis. Yesterday, ITV reported that you had suggested that those working in the arts should retrain.
The arts and culture industry in the West Midlands contributed £611 million in direct GVA to the regional economy in 2015, with a multiplier of 1.90 bringing that up to £1.16 billion. It has been a saving grace for many of us in lockdown. With the Commonwealth Games around the corner, the arts and culture industry will have a massive role to play in making this the massive placemaking and economic opportunity it should be for our region. It is simply a mistake not to support these sectors and the immensely talented people who work in them through this period. Yet, as the DCMS committee warned last month, with furlough ending “we can expect many cultural organisations to go out of business, never to return.”
The measures announced in the Winter Economy Plan do not come close to supporting people in these sectors. Analysis shows that the Job Support Scheme is 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 parttime. In addition, the interaction with the Job Retention Bonus scheme appears to create a January cliff-edge, where businesses can hoover up their bonuses and begin a new round of cuts.
Dozens of people working in the arts in my constituency who were excluded from SEISS support first time around have been ignored again – and those who haven’t been will see a reduction of support from 70% to 20% of trading profits, despite the persisting challenges in the sector outlined above. Already I have been contacted by one of my constituents who is eligible for the SEISS who came close to homelessness during lockdown. With the unpausing of the evictions ban, I would like to know what you would say to her now she faces that stark prospect again?
If the Treasury is serious about retraining, for example, why have you decided to not include incentives for employers around staff training within the Job Support Scheme? What do you intend to do beyond changes to employer incentives around apprenticeships, to boost training?
The reality is that Government incompetence has made this situation worse than it needed to be, with a Test and Trace system that is falling apart fuelling the prospect of ruinous further restrictions and lockdowns as the virus gets out of control. Neither the Government’s health or economic interventions are meeting these challenges.
It was only in March that you said you would do "whatever it takes" to preserve jobs through the coronavirus crisis. March is beginning to feel a very long time ago.
I urge you to revisit these measures to ensure that we can get on top of the virus and that my worst affected constituents are not left behind.
Preet Kaur Gill
Member of Parliament for Birmingham, Edgbaston