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As we survey the economic wreckage of Covid-19, how can we rebuild local economies for the better?

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In the space of just a few months, the coronavirus pandemic has created an unprecedented economic and social crisis in this country.

Numbers on a government statistics release don’t do justice to the way in which this crisis has impacted working people.

Across the country, jobs are being lost, family incomes are taking a hit, sound businesses are failing and local economies are rupturing.

The emergency response has been largely national, with packages such as the Job Retention Scheme designed to support workers across the country.

But local economies have been impacted differently by the pandemic. That’s why our economic and social responses must be local too.

The biggest challenge in generations

The Office for Budget Responsibility has warned the entire UK economy might shrink by a third this spring.

The extent of damage to jobs and growth depends on the length of lockdown measures, which we support to protect lives.

If lockdown lasts for three months, the ONS warn that national output could fall by 13 percent this year. More than 2 million people could also lose their jobs by June.

Right now, over seven million people are on furlough, and more than 1.5 million new claims for universal credit have been filed since the crisis began.

Big numbers, big headlines, big picture, but no detail on what this really means for working people.

The crisis broken down

At the TUC we hear daily the stark reality of what this means for working people from our affiliate unions, who are working frantically to protect jobs and incomes.

Their testimony is corroborated by Citizen’s Advice , which estimated that 38 per cent of workers had seen their income decline by the beginning of May, with nearly one in 12 losing 80 percent of their household income.

That meant that 6 million people had fallen behind on a household bill, with 4 million falling behind on their rent, council tax or a telecoms bill - due to the impact of coronavirus.

Research for the Standard Life Foundation found that one in five consumers has used savings to make ends meet during the crisis.

And a quarter of businesses have temporarily closed.

National crisis, local consequences

Every part of the TUC region of London, the South East and the East of England will be severely impacted.

The ‘Centre for cities’ mapped where jobs were most likely to be affected in the short and medium-term. In every one of the local economies they looked, at least one in five jobs were classified as either vulnerable or very vulnerable.

That means severe disruption in the form of short-time working, furlough, or permanent job losses.

No local economy is immune, but the Centre for Cities research predicted that some local economies will be affected much worse than others.

Worst hit was Crawley in West Sussex, where 53,000 out of 94,000 jobs are classed as vulnerable or very vulnerable. That’s over half of all the jobs in Crawley, many of which serve nearby Gatwick airport.

A potential tsunami of job losses in the aviation sector has already begun. Gatwick has closed its north terminal and reduced runway hours for at least a month. British Airways has announced 12,000 potential job losses and the suspension of flights from Gatwick. And Virgin has earmarked 3,000 potential job cuts and signalled it will stop flying from Gatwick permanently.

Crawley has the highest share of employees in the aviation and aircraft manufacturing industry of any local economy in the UK. 18 per cent of its workforce is employed in the aviation industry and related sectors, compared to an average of around 1 per cent across British cities.

Forty miles away is Hastings – officially the 13th most deprived local council area out of 317 areas in England. Its economy is heavily dependent on the hospitality sector, including tourism, restaurants, visitor attractions and accommodation.

The hospitality sector contributes more than £660 million to the local economy each year in normal times, and more than 15,000 jobs in Hastings are dependent upon the sector.

But two-thirds of jobs in these sectors in cities are estimated to be vulnerable or very vulnerable to the impact of coronavirus. The agency responsible for promoting tourism in Hastings, 1066 Country Marketing, had to publicly urge people to ‘stop visiting the area, reminding them that all tourist attractions are closed’.

One size fits all won’t work

Every local economy needs an economic and social rescue plan and resources. Some elements are universal. But the impact of coronavirus on places like Cambridge, Oxford, Luton, Crawley and Hastings is different in extent and nature.

A one size fits all policy simply won’t work. The challenges going forward are different. The opportunities are different. And the solutions are different too.

That’s why the roadmap out of this crisis, both in terms of economic and social policy, must be locally designed and delivered, with business and trade union voices at the table.

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