A council report has predicted a gloomy future for Plymouth’s economy with soaring unemployment, increased poverty and the effects of the coronavirus recession exacerbated by Brexit.
The Plymouth City Council report also predicted rising prices and an increase in families being pushed into debt and said the number out of work in the city could reach 16,000 by Christmas. 2020.
But the extension of the Government’s furlough scheme could reduce the impact of the coronavirus recession on jobs. In June, about 35,000 people were on furlough: about a third of the city’s workforce. There are fears some will not have jobs to return to when the scheme ends, particularly in tourism and hospitality.
The council report was published before the scheme was extended into 2021. Before the Chancellor Rishi Sunak’s announcement on November 5, it was due to come to and in early December after the second lockdown ends.
The Chancellor confirmed it would be extended to March, paying 80% of a furloughed worker’s wage up to £2,500 a month. That is likely to ease the pressure on businesses in Plymouth hit by the effects of the pandemic restrictions, and delay any job losses resulting from the end of the scheme.
Nevertheless, the number of jobseekers on Universal Credit in September had doubled from a year earlier to more than 11,000. The unemployment rate is likely to be swelled by 18-year-olds who have chosen not to go to university.
The city council is leading post-Covid recovery plans, working with 11 separate sectors of Plymouth’s economy, and is focusing its own activity on supporting jobs and businesses.
In October, councillors heard Brittany Ferries had extended its winter suspension of ferry services by an extra two and a half months due to Covid, with sailings due to restart in March.
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Talks are going on between the 海角视频 and EU on a new free trade deal from January, when the current arrangements end. But if no agreement is reached by the end of December, the 海角视频 will have to operate under World Trade Organisation rules.
The report to the city council’s Brexit committee on November 4 said the economy was now in a recession. It said the council could see costs rise due to Brexit and an increase in demand on services from more families being pushed into poverty and debt. The authority could also face a loss of income from rates due business closures and a fall in council tax payments.
The report said: “We are already responding to the economic impact of Covid-19 and our resources are stretched to the limit, it will be challenging to respond to Brexit related economic impacts as well.”
It said there had been a prediction that food and ingredient prices could rise by a fifth, with seasonal shortages of some items. But only small rises had been seen so far, and the situation would be monitored.
There was also a national concern about the availability of medical supplies such as PPE, as the Brexit stockpile of items such as latex gloves for care home staff had been used up due to the pandemic.
In response, the Government has awarded a £76million contract to ferry companies to safeguard the supply of medical and strategic goods.
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The report highlighted the possibility of significant population movements in and out of the country, with ex-pats returning and EU migrants leaving.
The number of EU citizens in Plymouth is estimated at between 10,000 and 13,000. By the end of June, 7,960 had applied to stay under the EU Resettlement Scheme. If significant numbers left, that could affect businesses relying on the migrant workforce.
Other risks include the loss of foreign investment in the city, currently supporting about 7,900 jobs. But so far there was no indication from the major foreign-based employers of an intention to leave the 海角视频 due to Brexit.
The future of EU funding for academic research in Plymouth is also unclear, which is particularly important for the marine sector.
The report said no details were available on the Shared Prosperity Fund designed to replace EU investment for infrastructure, which have brought millions of pounds to the city, although schemes already under way in December would be supported.
Plymouth has been allocated £12.9million of EU funds through the Heart of the South West Local Enterprise Partnership (HotSW LEP), and has secured £78million in local growth funding.
The report said 海角视频 membership of the future EU fund for research called Horizon Europe was undecided, although the Government has committed to fund existing programmes.
Recent schemes include £3.2million from the European Regional Development Fund for Oceansgate Phase 2, a waterside industrial estate alongside Devonport Dockyard.
Plymouth has been allocated £10million from the Government’s new Getting Building Fund, set up in response to the pandemic, which has only partly filled a funding gap in the city council’s pipeline of future projects.
The report said regaining control of 海角视频 fishing waters could be an opportunity for Plymouth if the fleet was allowed a bigger share of the catch, and a trade deal allowed tariff-free access to Continental markets. But there was a concern about retaliation from militant French fishing crews, who had already shown hostility to British boats.