REGIONS that depend on industries most affected by the Covid-19 pandemic are at risk of suffering from deepened inequality if the government does not extend its furlough scheme, Labour warned today.

Retail has been the sector hardest hit by mass redundancies since the pandemic began, with manufacturing and aviation also badly affected.

Tens of thousands of job losses have been announced and more redundancies are expected in these sectors, yet they have received no tailored support for when the government’s jobs-retention scheme is scheduled to finish at the end of October.  

Labour is warning that ministers’ “indiscriminate severing” of furlough support risks further entrenching regional inequalities, with local economies written off by the government as Britain enters a recession. 

Britain already has the worst regional inequalities in Europe, and without targeted action they are likely to get even worse, the party said.

Labour’s shadow business minister, Matthew Pennycook, said: “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 east Midlands, which includes Britain’s textile hub of Leicester, has the highest percentage of its workforce in manufacturing (13 per cent), new research by the party shows.

The West Midlands, Yorkshire and Humber, Wales, England’s north-east and north-west follow, with 10 to 12 per cent of their workforce in manufacturing.

London, in comparison, has only 2.2 per cent of its workers in manufacturing. 

But the capital is the most likely affected by the huge hit to aviation and the travel industry, having the highest proportion of workers in that sector.

More than 10 per cent of workers in the north-west of England are in retail — the highest proportion in the country — while Wales and the north-east come in second and third. 

Mr Pennycook said: “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.”