Britain’s manufacturers need time to scale operations back up to pre-coronavirus levels and will be damaged by a cliff-edge end to pandemic support measures.
MakeUK, the trade body which represents manufacturers, has issued a three-point plan containing measures it says are needed for the sector which comprises 10pc of Britain’s economy to recover from coronavirus.
It warns that the sector is expected to be particularly hard hit by the Covid-19, with the Government’s own forecasters warning the UK’s industrial base will suffer a 55pc contraction in the second quarter.
MakeUK says that if the sector is to recover to its previous size, companies need breathing space while demand is boosted, supply chains recover and investment encouraged.
Stephen Phipson, chief executive of the association, said: “As we move into the recovery stage, the right response is to focus on supporting the sector with measures designed to stimulate demand and ensure manufacturers can get back to supplying the goods consumers want and our country needs.
“We are calling for a flexible recalibration rather than a cliff-edge shock by allowing the job retention scheme to continue its support but in a way that enables manufacturers to get back to work in a way that lets them recover as they bring staff back as order books grow and production levels and supply chains to return to normal.”
He added that a sudden halt to the job retention scheme coinciding with the easing of the lockdown “would be highly premature” and have “devastating effects” on employment level, with companies unable to pay workers whose efforts are not needed until demand returns to normal levels.
Mr Phipson added: “A more sophisticated, flexible and tapered approach to the jobs retention scheme would have a huge positive impact on confidence and ensure that the sizeable national investment in it is maximised, not wasted.”
MakeUK’s plan consists of three main areas:
- Boosting economic support, with “new for old” incentives which encourage companies to pump money into more modern equipment which boost productivity
- Flexibility about a return to work, with guarantees PPE will be available without denying the NHS of vital equipment, and encouraging staff with health and safety skills to come back to work in a staggered way to ensure workplaces are ready for a new environment, as well as a more realistic approach to health and safety.
- Boosting the industry’s resilience with work to understand supply chains and make them more robust, while encouraging R&D investment.