A group that represents more than 200 companies from the metalforming sector believes the Chancellor has missed an opportunity to protect thousands of manufacturing jobs by not implementing industry stimulus packages and failing to adopt a reverse job retention scheme.
The Confederation of British Metalforming (CBM) is urging the government to stop delaying support that key sectors will inevitably need if they are going to recover from the economic shock of Covid-19.
President Steve Morley said latest talks with its members underlined the need for urgent support to the automotive and aerospace sectors, who have seen volumes fall off the cliff overnight.
Suppliers to the car sector were broadly in favour of a similar scrappage scheme to the one seen in 2009, while manufacturers of parts for airplanes are predicting an 18-month lag until some form of recovery is seen.
The CBM is also calling on the Chancellor to look at a reverse job retention scheme that would see the money used for furlough given to employers to subsidise wages to take staff back on and then the financial support tapers off as work increases.
Morely commented: “There were some very welcome measures introduced in the statement, but we don’t think they went far enough to support manufacturing, who are dealing with an unprecedented fall in demand.
“We need to kick-start two vitally important sectors in automotive and aerospace and there were no real packages announced that will do that last week. The scrappage scheme was one option, but I’m led to believe HM Treasury are sceptical on how effective the previous scheme was.”
He continued: “So if this isn’t an option then we need to potentially look at a substantial widespread VAT cut to get the market moving and this decision needs to be taken sooner rather than later.
“There’s so much potential in automotive, especially with the way the UK is leading the rest of the world in electrification and driverless technologies.
“The same applies with aerospace and the best way we can get this going again is for Government to get people safely travelling by air. We’re not sure air bridges are enough on their own.”
Reverse job retention scheme
The CBM has been a strong advocate of a reverse job retention scheme and this was presented to the government through BEIS, but it appears to have fallen on deaf ears.
This was based on transferring some of the support being used for furlough workers and instead giving it to employers to bring people back so they can get them contributing to the business and the economy.
The financial support could be reduced over an agreed period of time, but importantly gives firms breathing space to get people working again without the prospect of paying their full wages straight away.
“We believe this approach has the potential to save thousands of manufacturing jobs,” added Steve.
“The job retention bonus favours the larger firms who have 100s on furlough and I’m not convinced £1000 is a big enough incentive to stop companies from making the cuts. We needed a longer-term, more structured approach that delivers job security and gives businesses time to plan.”
On a positive note, the CBM welcomes the ‘Kickstart’ scheme and the incentives for apprenticeships that will give industry a boost.
Its members have already openly quoted that this will underpin their appetite and search for apprentices, and it’s hoped this new support will reverse what has been an alarming downturn in apprenticeship uptake this year.
Morley concluded: “As a body that represent British metalforming, we also want to see an embargo on British jobs being exported. Even now work is still being resourced out of the country and it needs to stop.
“We need a strong emphasis on reshoring work to the UK. With state aid rules associated with Europe ending in December, the time is right to move on this and develop incentives to keep work here, while also bringing other contracts back to these shores.It’s time to get the gloves off, stop the talking and actually walk the walk.”
*Image courtesy of KimberMills