Why Leeds and Yorkshire are faring better during lockdown crisis

Just under half of the region’s firms are operating at below 50 per cent capacity, data from Lloyds bank showed with confidence in the manufacturing sector having seen the sharpest decline, with the retail, construction and services sectors registering falls as well.

Despite the slump in activity, business leaders in Yorkshire displayed some of the highest levels of optimism in the UK, something one Lloyds boss attributed to the resilience of the region’s economy, with Leeds’s professional services sector - worth an estimate £19.8 billion and employing over 300,000 people across the city region - cited as being less exposed to the effects of the crisis.

Of the 73 per cent of businesses that reported disruption to their supply chain during April, nearly a third expected the situation to improve within three months, while just 4 per cent expected it would take more than 12 months to return to normal.

Paul Varley, regional director for Yorkshire & the Humber at Lloyds Bank Commercial Banking, said: “Despite the negative confidence reading, Yorkshire firms are some of the most confident in the UK, which demonstrates the scale of the impact that the pandemic has had on firms UK-wide.

“It’s testament to the resilience of Yorkshire firms that optimism hasn’t fallen as sharply as the national picture. Anecdotal feedback from the research showed that certain industries perhaps less exposed to the pandemic than others, like Leeds’ professional services sector, may be holding up overall sentiment.”

The news comes after Chancellor Rishi Sunak threw a lifeline to thousands of small business owners in the form of loans worth up to £50,000.

Mr Sunak said the “bounce back loans” would be interest free for 12 months with the Government guaranteeing 100 per cent of the risk.

However the Chancellor rejected calls for the Government to underwrite other coronavirus loan schemes with a 100% guarantee, insisting his new plan would “carefully target” the level of state support at those who need it most.

The loans will be available from 9am next Monday, with “no forward-looking test of business viability, no complex eligibility criteria, just a simple, quick standard form for businesses to fill in”, he said.

The loans are the latest Government intervention to prevent the UK economy from foundering during lockdown.

Forecasts have warned of a severe slump in economic activity owing to the Covid 19 shutdown, with the Office of Budget Responsibility forecasting that the UK economy could shrink by as much as 35 per cent and shed two million jobs.

Ministers have already allocated £15 billion of support in response to the economic devastation caused by the virus and the lockdown measures, and Mr Sunak warned of more tough times to come.

“We should be in no doubt about the seriousness of the economic situation,” Mr Sunak said.

“The Office for Budget Responsibility has published a scenario showing that the coronavirus will have very significant impacts both at home and in the global economy.

“More than 1.5 million new claims have been made to Universal Credit.

“Over four million jobs have now been furloughed.

“Survey evidence suggests a quarter of businesses have paused trading.

“These are already tough times. There will be more to come.”

Reaction

The Government loans to small firms were hailed as “transformational” by the leader of Britain’s largest business organisation who said the move could save thousands of companies from going to the wall.

CBI director-general Dame Carolyn Fairbairn said: “Sole traders, micro-firms and entrepreneurs will now have a simple route to fast finance to stay afloat, without red tape or time-consuming checks.

“Thousands of businesses could be saved by this lifeline. Banks now need to continue their work in overdrive to get the loans flowing faster.

“It’s good to see the Chancellor listening to business, proving that where there’s a need to adjust schemes, he will do what it takes. It will be vital to maintain this approach in the months to come.

“Every job saved today will ensure a faster recovery tomorrow."