The UK 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 as removing the current security restrictions on loans, to protect significant numbers of highly skilled jobs and critical supply chains across all regions of the country.
The call was mas made by Make UK off the back of the widespread damage being caused to industry by Covid-19. Its latest Manufacturing Monitor (published May 29) showed that almost three-fifths of manufacturers now believe it will take more than 12 months for trading conditions to “return to normal”.
The government was right to focus on the immediate need to protect individuals and jobs through the Job Retention Scheme, according to Make UK; however, a more radical approach is now needed to protect the internationally competitive position of key strategic sectors and companies.
This should include ensuring that companies are able to access capital to service debt incurred to survive the lockdown and grow in the future.
Unless direct financial support is provided over the months ahead, as well as significant hurdles to loans being 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.
In particular, Make UK said such support should be targeted at the aerospace, automotive and steel sectors which have 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 noted that such support is essential in those regions of the UK which have a high dependency on these key sectors and would therefore suffer disproportionate economic harm should they not survive.
Make UK chief executive, Stephen Phipson, commented: “While the support schemes in operation are providing significant support to the economy there are some sectors and companies who are fundamentally sound businesses and were trading positively before the pandemic.
“Instead, however, they have now been driven to the cliff edge by the nature of this crisis and may not survive without direct government intervention.”