Government support favours London, say northern SMEs


A study of Downtown in Business members has found that small companies in the north don't feel as though they have been a government priority during the coronavirus pandemic.

The findings also show that job losses are likely across four in five businesses and that most feel as though recovery could take more than three years.

Downtown put its questions to businesses which employ between 10 and 50 people and have a turnover of below £5m. Those polled spanned its networks in Lancashire, Liverpool, Greater Manchester and Leeds.

Eighty-six per cent of the respondents believe that the government is favouring companies in London over those in the north. However, they did also view chancellor Rishi Sunak's response positively, with a majority rating measures such as furloughing as very good’ or ‘excellent’.

Frank McKenna, chief executive of DIB, said: "We wanted to understand what the ‘S’ within the SME sector was feeling through this crisis – and the results do not make for optimistic reading.

"It is interesting that northern businesses believe the government favour companies in the capital. There is a feeling that London-based firms have easier access to finance; and it did not go unnoticed that a large chunk of cash has been awarded to Transport for London in recent weeks."

There is a feeling that London-based firms have easier access to finance

Frank added: "What has perhaps not been acknowledged by northern businesses is that this cash has come with strings – nor perhaps is there a recognition of how important the capital remains to UK PLC."

The study also found that 81 per cent expect to make redundancies during the next twelve months and 73 per cent believe it will take them three years to get to the same level of trade that they were enjoying before lockdown.

Frank added: "I have heard people describing the aftermath of this crisis as comparable with the crash of 2008 or the recession of 1993. If these findings on redundancies are accurate, then what we will see is far worse than that. It feels more like a return to the 1980s.

"During that decade, Northern cities suffered a huge decline from which it took them years to recover. I hope that the government have a more ambitious and aspirational vision for our core cities than was the case back then.”

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