Fears new Government help will not be enough to prevent job losses South Tyneside
South Tyneside’s leaders have given a nervous reaction to Government measures to help save jobs and protect businesses announced today.
Chancellor Rishi Sunak has confirmed a range of measures worth £30billion designed to keep people in work, including cutting VAT to 5% on hospitality, entertainment and tourism.
A £2.1billion "kickstart scheme" to create more jobs for young people, a stamp duty holiday for house buyers, and the ‘Eating Out to Help Out’ scheme providing 50% discount on dining from Mondays to Wednesdays in August were also outlined in the Chancellor’s speech in the House of Commons on July 8.
But while help was welcomed, South Tyneside Council chiefs remain nervous the measures will not be enough to prevent widespread suffering in the borough.
Councillor Ed Malcolm, Lead Member for Resources and Innovation at South Tyneside Council said: “Whilst we welcome a plan to protect and create jobs, the Chancellor fell short on bringing forward measures for long term sustainable economic growth.
“Since March, there has been a three per cent rise in unemployment in South Tyneside, a 10% fall in job vacancies and 16,000 residents are on furlough schemes, many of which are in high-risk sectors. I only hope that in the coming months, the measures announced today will help our businesses to protect existing jobs, create new ones and support our young people into work.
“The job retention bonus is a very modest step but will be a welcome announcement for our businesses bringing staff back to work in a covid secure environment. However, it does not guarantee those people’s jobs after January 2021.
“It also does not address the issue of demand. All businesses need customer confidence to ensure that demand is there for their products and services, not to mention the capacity that businesses have lost in becoming covid secure.”
Coun Malcolm said South Tyneside has been “disproportionately affected economically” by coronavirus for a number of reasons.
He said as a coastal community heavily reliant on tourism, which has been hit hard, news of the VAT cut would be welcome – but the “success of ‘eat out to help out’ remains to be seen”.
“We will of course support our businesses in signing up to the government scheme when it opens next week,” he said.
“What the public need is confidence. People are understandably nervous to go out and spend, that is why, as a council, we have worked hard to support our high street to reopen. The government had an opportunity to get customers to start spending again but seem to have held back.”
It will set out a list of interventions and projects needed to help the borough bounce back from the economic shock of the pandemic.
“As a council who has already committed to be carbon neutral by 2030 we welcome green initiatives that can support our residents to be more energy efficient. However, the UK is already behind in the race to decarbonise and must go further. We have a real opportunity to increase investment in the low carbon economy - and capitalise on them. Creating better, greener jobs for the North East,” said Coun Malcolm.
“The Chancellor promises that nobody will be left without hope, I fear that many already have been.
“Aside of the immediate pressure created by the pandemic, as a council we still need the Government to address the ongoing issues around longer term sustainable funding for local authorities.
“As the Chancellor announced – this is a plan for now. I only hope that his plan for the future goes further.”