As we endure our third coronavirus lockdown there are mounting concerns of the potential cliff edge of job losses and businesses failures in the spring.
Businesses are financially and emotionally drained by the cycle of opening and closing and face a cashflow crisis as support measures like furlough and payment holidays start to unwind.
The Federation of Small Businesses predicted last week that 250,000 small business in the UK could fold without further help, saying the Government’s support measures had not kept pace with intensifying restrictions.
In Cornwall and Scilly we have been disproportionately hit because of our high dependence on the visitor economy and the impact on related key sectors like food and drink. We also have higher than average numbers of self-employed, many of whom have fallen through the support net.
According to Visit Cornwall, Cornwall’s tourism sector lost around £862m last year because of Covid. The loss of February half term this year will cost a further £67m. If we lose Easter as well then cumulative losses since the start of the pandemic will exceed a billion pounds.
Put another way, we will have lost £43 out of every £100 of visitor spend.
The issue was recently highlighted in a Commons debate by St Austell and Newquay MP Steve Double, who chairs the All-Party Parliamentary Group for Hospitality and Tourism.
He argued that tourism has a critical role to play in the economic recovery. Current support measures like the business rates holiday and VAT reduction should be extended for at least six months so businesses have the cash they need to reopen, he said.
He also urged an extension of repayment terms for Government-backed business loans to help businesses with cashflow and working capital. Otherwise they would clobbered with repayments at the precise moment they are trying to get on their feet.
And he asked that the Government’s Tourism Sector Deal be beefed up with the addition of a tourism recovery fund and the creation of tourism zones, telling Tourism Minister Nigel Huddleston: “I would like to make the case to the Minister that Cornwall, or at least the South West, should be one of the first areas to get that recognition and the support that goes with it.”
The LEP and our partners across the business community have been making these points to Government and our MPs for some time. Tourism is hugely important not just to Cornwall but to the wider region so it’s good to see that MPs will be discussing the creation of a tourism zone at the next meeting of the Great South West All-Party Parliamentary Group in a few weeks’ time. And of course we have just had the news that Cornwall will host the G7, giving us global publicity the money just can’t buy.
But it’s not just about tourism. Coronavirus has left few parts of our economy untouched. We need to focus on long term recovery and correcting the UK’s lopsided economy which has left many regions, ours included, behind.
The Government calls this ‘levelling up’ and has pledged to make it a centrepiece of its economic strategy, backed by a Shared Prosperity Fund to replace the EU funding we would have received to support our economy had we not left the EU.
We’re expecting more details about this in the Chancellor’s Budget on March 3, and more detail about a £4 billion ‘Levelling Up’ fund for infrastructure investment.
Without clarity on these longer-term economic support measures it’s difficult for businesses and investors to plan ahead and help shape recovery, and for the LEP to unlock our region’s economic potential, especially in emerging industries like clean energy, space and data.
Encouragingly, and despite the pandemic, there is no lack of ambition in Cornwall and Scilly. In the last quarter of 2020 we invited expressions of interest in future funding streams from businesses and organisations across our patch.
We have had a hugely positive response and now have a pipeline of projects worth three quarters of a billion pounds, with hundreds of millions of pounds of private sector investment ready to be unlocked if we can secure match funding from Government.
What we need now, and without delay, is for Ministers to make good on their ‘levelling up’ promises.
Mark Duddridge is Chair of the Cornwall and Isles of Scilly Local Enterprise Partnership.