A second wave of Covid-19 will be a “knockout punch” to Britain’s beleaguered high streets with one in 10 stores at risk of never re-opening.
Some 12m square metres of floor space - equivalent to more than 400 shops the size of the flagship John Lewis department store on Oxford Street - will no longer be needed, according to property experts.
The warning comes as Rishi Sunak came under attack from Labour for putting more than a million jobs at risk.
Lamenting the creation of “Sunak’s scrap heap”, opposition MPs urged the Chancellor to rethink the Government’s Job Support Scheme, which will replace the furlough programme at the end of October.
Shadow business minister Lucy Powell said: “The Chancellor is consigning whole sectors of our economy to the scrap heap, damaging lives and livelihoods, and threatening the recovery.”
Companies in the hospitality and conference industries say they have no choice but to start making mass redundancies as Government support is withdrawn.
Retailers have lost £9bn in sales so far this year with almost 14,000 shops already permanently closed, the Centre For Retail Research found.
There is 125m square metres of overall retail floor space, both occupied and vacant and to let, in England and Wales according to Altus Group.
Professor Joshua Bamfield of the Centre For Retail Research said about a tenth of this space will need to be “repurposed” as it was no longer required by retailers, which have seen footfall disappear over the pandemic.
Amid fears of a resurgence of coronavirus in the UK and the implementation of stricter controls, Mr Sunak launched his winter economic plan last week. Retailers were left disappointed as the Chancellor did not extend a business rates holiday, which is due to end in April.
Industry bosses warned of a “looming threat” from the re-introduction of the £8bn-a-year business rates regime and urged Mr Sunak to commit to a fresh extension to “avoid unnecessary job losses and shop closures”.
Labour, meanwhile, said that the events, arts, leisure and sports sectors will be hit particularly hard. Those at risk of being “dumped on the scrapheap” included almost 500,000 people employed by night clubs, pubs and bars.
The creative, arts and entertainment sector supports 90,000 jobs and the sports industry almost 370,000 positions, MPs said.
At the heart of Mr Sunak’s plans is the Job Support Scheme. From Nov 1, for staff whose employers can only provide part-time work, the Exchequer will top-up pay for normal working hours for up to six months.
The Government’s contribution will be capped at just under £700, considerably lower than the £2,500 under the original furlough scheme. The new support measure will cost the Treasury a fraction of what it paid out for the furlough scheme.
The announcement followed pressure from trade bodies and unions over fears of a jobs cliff-edge as the tapered furlough scheme ended.
CBI chief Carolyn Fairbairn had sympathy with Mr Sunak, who is trying to mitigate a spike in unemployment without piling more pressure on to the public finances.
While admitting that the job support scheme “will not protect every job”, she said that the costlier furlough scheme “was becoming unsustainable”.
“The Chancellor is walking a tightrope,” Ms Fairbairn told Sky News. “[But] we think this, broadly speaking, a really strong package. “We have had many businesses [get] in touch with us saying how much they welcome the scheme.”
Calling all employers and employees: how are you coping with new lockdown measures? What does the future hold and what support do you need? Tell us by emailing email@example.com