Aerospace, Automotive and Steel sectors with critical supply chains highlighted
The Government is being urged to provide direct support to key strategic manufacturing sectors and companies to ensure their short-term survival through the pandemic, as well remove the current security restrictions on loans, to protect significant numbers of highly skilled jobs and critical supply chains across all regions of the UK.
The call was made by Make UK, the manufacturers’ organisation on the back of the widespread damage being caused to industry by Covid 19 and its latest Manufacturing Monitor published last Friday showing that almost three fifths of manufacturers now believe it will take more than a year for trading conditions to return to normal.
According to Make UK, the Government was right to focus on the immediate need to protect individuals and jobs through the Job Retention Scheme. However, moving forward into the recovery phase, Make UK now believes that a more radical approach is needed to protect the internationally competitive position of key strategic sectors and companies which were trading positively before the pandemic. This should include ensuring that companies are able to access capital to service debt incurred to survive the lockdown and be able to grow in the future.
Given the extent of the damage inflicted to date is so severe that unless direct financial support is provided through the intervening period of the next year, as well as significant hurdles to loans be removed, Make UK believes major companies may be damaged to such an extent that they will not be in a position to take people off furlough and will resort to substantial redundancies. Make UK has called for a National Skills Taskforce to be set up to retain key skills in the sector with its latest survey showing a quarter of companies plan to make redundancies in the next six months with less than a third currently ruling them out.
In particular, Make UK believes such support should especially be targeted at the Aerospace, Automotive and Steel sectors which have very long supply chains and would therefore also see the benefits. This support would be in line with policies being adopted by Governments to support key sectors in competitor countries.
Make UK believes such support is also essential in regions of the UK which have a high dependency on these key sectors which would suffer disproportionate economic harm and a failure to provide the much needed levelling up of economic performance.