Ending furlough scheme in autumn will force more pubs to close, warns Labour

Pressure builds on Rishi Sunak to extend coronavirus economic measures

Rishi Sunak plans to end the furlough scheme in October (PA)

Ending the furlough scheme for all businesses this autumn threatens the future of high streets and nightlife that has been severely hit by the coronavirus crisis, Labour has warned.

According to an analysis by the party, more than 5,500 pubs and bars have closed since the Conservatives entered government in 2010 while the number has also fallen in every region of the UK.

Labour claims closures will accelerate in the coming months as the chancellor, Rishi Sunak, prepares to withdraw the furlough scheme – which is being gradually phased out – at the end of October.

The party also pointed to a survey by the British Beer and Pub Association last month that suggested 37 per cent of pubs cannot break even one month after reopening, as Covid-19 restrictions were eased.

The outlook is even bleaker for nightclubs across the country, with the government offering no potential reopening date for the industry, given the significant risk of transmission at such establishments.

Lucy Powell, the shadow business minister, said: “Pubs are a vital part of our high streets and social fabric in communities up and down the country.

“They have been hard hit by the pandemic, and Tory indifference and incompetence over the years means that many have gone to the wall.

“Ministers’ blanket approach to ending the furlough threatens the future of many more. The furlough scheme must be extended for hard hit sectors to save jobs now, and a hospitality and high street fund so local areas can target support at businesses still in distress.”

Her comments came as MPs on the Digital, Culture, Media and Sport Select Committee warned that the arts and leisure sector also face mass redundancies if the chancellor fails to extend the furlough scheme beyond October.

In a letter to Mr Sunak, the Conservative MP Julian Knight, who chairs the committee, said the scheme had been a “lifeline” for companies in the sectors, adding: “We’re making it absolutely clear to government that if furlough is cut off in October, not only will mass redundancies follow, but we can expect many cultural organisations to go out of business, never to return.

“We know that more workers in these industries depend on the scheme to pay their wages than in any other.

“Ministers should recognise their duty to provide ongoing support for people hard hit by this crisis and extend the help on offer to organisations facing restrictions on how they operate.”