Yahoo Finance Coronavirus: MP hits out at Amazon raking in '40% of £5bn' additional online spend
A UK Labour minister questioned what the government was doing to support online businesses impacted by COVID-19, noting that online retail giant Amazon (AMZN) received 40% of the additional money spent by UK consumers online during the pandemic.
UK shadow business minister Chi Onwurah told MPs: “Of the £5bn [$6.7bn] of new online spend because of the pandemic, 40% has gone to one website – Amazon,” PA Media reported.
Onwurah’s office told Yahoo Finance she was referring to data from retail insights firm Edge by Ascential published in June, which said a surge in online shopping caused by the pandemic was expected to add £5.3bn to UK e-commerce sales this year, to make a total of £78.9bn.
The report said Amazon was expected to benefit the most from this surge in demand, adding an extra £2bn in UK sales, totalling £31.1bn by the end of 2020, up from analysts' initial £29.1bn prediction prior to the pandemic.
Onwurah pointed out that “Many small businesses are afraid they won’t make it through the winter because of the lack of government support and they have Brexit, climate and technological change to deal with too.”
She went on to ask business minister Nadhim Zahawi, “What is the plan for small businesses to survive COVID-19 and build back smarter and greener?”
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She also urged the government to make firm commitments to local businesses, rather than vague promises.
Zahawi responded that the “Made Smarter initiative has been a tremendous pilot in the North West and we recently announced a further expansion with £300m – £147m coming from government and the balance coming from the private sector – to support technology adoption into manufacturing.”
Made Smarter, backed by the UK government along with big names like Rolls-Royce (RR.L) and BAE Systems (BA.L), was created following an industry-led review of how UK manufacturing industries can prosper through digital tools and innovation.
It aims to “accelerate the diffusion and adoption of digital technologies across the UK manufacturing sector.”
It is currently being piloted in North West England with plans to scale up across other regions.
According to the Federation of Small Businesses, at the start of 2020 there were 5.94 million small businesses (with 0 to 49 employees) in the UK, employing 13.3 million people, with a turnover of £1.6tn.
Many of them have been hit hard by the pandemic. Research by law firm Fladgate in October said its survey of 500 SMEs paints a “concerning outlook” for the backbone of the UK economy.
Some some small business leaders have also hit out against the UK government’s handling of the coronavirus, and the ensuing lockdowns.
Meanwhile, as Amazon has hugely benefited from the pandemic, with more people turning to online shopping, it has also drawn condemnation from politicians around the world, including the UK and the US.
In an open letter to Amazon chief Jeff Bezos earlier this month as part of a campaign called ‘Make Amazon Pay’, lawmakers including UK Labour Party leader Jeremy Corbyn, said: “The world knows that Amazon can afford to pay its workers, its environmental cost and its taxes. And yet – time and again – you have dodged and dismissed your debts to workers, societies, and the planet.”
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