Government 'writing off Yorkshire' by withdrawing furlough, a report by the Labour Party warns

The Government has been accused of "writing off Yorkshire" as the region is set to be hit hard by manufacturing industry redundancies when furlough support is withdrawn.

The Government is not doing enough to support jobs, the Labour Party said. Pic: Stefan Rousseau/PA Wire

There are 284,000 people working in manufacturing in Yorkshire and the Humber, almost 12 per cent of the workforce in the region – the second highest proportion in the whole country.

The furlough scheme has protected 40 per cent of manufacturing jobs in the region during the pandemic but when it finishes at the end of October, research by the Labour Party suggests there will be a flood of job losses.

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Manufacturing body Make UK has warned that more than half of manufacturing companies plan to make redundancies in the next six months, which follows 8,500 manufacturing redundancies already in the UK.

Matthew Pennycook MP, shadow business minister, said: “The government is writing off Yorkshire as the country enters recession, with the figures suggesting these communities will be disproportionately hit by the jobs crisis.

“Labour is calling for the government to u-turn on its damaging blanket approach to withdrawing furlough, which fails to consider the circumstances of different sectors or the impact on the communities that have a proud history in these industries.

“The government needs to do right by these communities and businesses, and see them through the crisis by targeting support, not pull the life raft away while the storm is still raging on.”

As well as manufacturing jobs being at risk, many of the region’s other industries are likely to suffer, including the 221,000 people working in retail and 173,000 people working in hospitality.

With the forced shutdown of these businesses at the start of the pandemic, many companies were still eligible for rent payments and other outgoings and could not absorb the costs, which meant they were forced to close or took on levels of debt they may not recover from.

The region has benefited from more than £742 million through the Coronavirus Business Interruption Loan Scheme as of August 2020, the government said.

Jonathan Reynolds, shadow work and pensions secretary, said: "Every job lost is a tragedy and we must do all we can to safeguard people's livelihoods.

"We are in the midst of a jobs crisis right across the UK, but these figures show certain areas are more at risk than others. The Government's 'one size fits all' approach will see some communities hit harder and they must adopt a more tailored approach now if we are to avoid further job losses."

Labour said that with the furlough scheme being wound down, the Government should target support at the hardest-hit sectors.

The UK already has the worst regional inequalities in Europe and without targeted action, this is likely to get even worse, said Labour.

A Government spokesperson said: “We have acted quickly to deliver one of the most generous and comprehensive packages of support in the world worth an initial £160 billion for all sectors - including the manufacturing industry.

“This includes supporting nearly 750,000 jobs in Yorkshire and the Humber through the furlough scheme - which manufacturers across the region have used to support 40 per cent of their staff.

“Through the Local Growth Fund we are already investing £1.3 billion across Yorkshire and the Humber to support local economies, expand business operations and create jobs.”

Statistics released by the Department for Work and Pensions also show the number of people claiming Universal Credit in the region has reached 482,510 a rise of more than 80 per cent from February 2020.

Across the UK, 5.5 million people now claim the benefit, a 90 per cent rise nationally.