UK business calls on Chancellor to extend furlough to avert jobs crash

Boris & Rishi

Carmakers and aerospace companies have become the latest sector to ask for special treatment as lobbyists scramble for the ear of the chancellor before the furlough scheme ends next month.

Make UK warned of a jobs and research and development disaster, with the loss of skills putting the country at a disadvantage to continental competitors unless the scheme was extended for them.

Automotive and aerospace were the sectors most in need of an extension to the furlough scheme, the manufacturers’ organisation said, because they had been hit the hardest and because they supported the high-skill, highly paid jobs that were most important to economic recovery.

Individual sectors are starting to plead for more targeted help as it becomes clear that the job retention scheme, which has cost more than £35 billion so far, probably is not going to be extended. There have been calls to make the hospitality sector a special case to prevent job losses later in the year, while others have called for employers in arts and entertainment to be given a special boost.

Make UK contrasted the help given to pubs and restaurants through the Eat Out to Help Out scheme with its own plight. It warned of a second wave of job losses if there was no more help for manufacturers, with two thirds of members in its latest survey saying that they would or might make more redundancies in the next six months.

Stephen Phipson, chief executive of Make UK, said: “The protection of key skills should be a strategic national priority, as this will be the first building block in getting the economy up and running. Ensuring that those sectors that are at the forefront of technology and will provide the growth sectors and high-skill jobs in recovery should receive the greatest support possible.”

The organisation pointed to France and Spain, which have offered targeted help to sectors such as aerospace.

Under the job retention scheme, the government has met most of the cost of furloughed employees, but it started to phase it out last month. This month it pays only 70 per cent of wages, which falls to 60 per cent in October and then ends on November 1. The scheme has helped 1.2 million businesses to pay the wages of 9.6 million workers.

Aerospace companies and carmakers are the largest investors in R&D, spending £5.9 billion, or a third of the total, Make UK, which represents 5,000 companies across industry, said.

In its latest snapshop of activity in manufacturing, it said that business had improved since the worst of the pandemic, but 61 per cent of companies were still reporting a decrease in sales compared with last year and 50.7 per cent a fall in orders. Almost 70 per cent of respondents had at least one employee furloughed.

Some big manufacturers, including Rolls-Royce, Jaguar Land Rover and GKN, which makes parts for aircraft and cars, have announced job cuts.

Almost a fifth of small and medium-sized businesses say that they would not survive another lockdown, according to a study of 500 business owners. Another 32 per cent said that the impact would be worse than the first lockdown and another 34 per cent said that it would be equally bad. Only 5 per cent said that they would cope better this time, according to the survey from Simply Business, an insurer.