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UK manufacturers call for equipment scrappage scheme

08 June, 2020

Make UK, the body that represents UK manufacturers, is calling on the government to introduce a scrappage scheme for old plant, machinery and IT equipment to incentivise cash-strapped firms to invest in automation and digitisation, and to help manufacturers recover from the effects of the Covid-19 pandemic.

The organisation is also lobbying for a government-funded scrappage scheme to encourage consumers to buy new environmentally friendly cars, and deliver “a much-needed boost” to the UK’s automotive industry. It suggests that a voucher-based system with the government contributing around £5,000 for each new car, would deliver an incentive for drivers to upgrade, with industry contributing the trade-in value of the old model.

Make UK believes that such scrappage schemes would give businesses the head-start “they desperately need as they struggle to replenish their decimated order books and get production up and running again”.

The trade body points out that up-front labour and raw material costs are affecting many factories which have been forced to close or run on lower capacity during the lockdown period. Others, which shifted to making sanitisers and medical equipment, also face considerable costs as they revert to normal production.

“The challenge faced by manufacturers as they start to rebuild their businesses and bring staff slowly back into the workplace is vast,” says Make UK CEO, Stephen Phipson. “Supply chains have been decimated and order books are in the worst state in decades. To survive, businesses will need to take every advantage they can of the latest technologies and equipment to boost productivity to get back on track in the coming months.

Phipson: we must emerge stronger and better equipped

“These initiatives will not only help businesses get back on their feet,” he adds, “but would, at the same time, tackle environmental issues which are important to Government as we work together to build a greener Britain.

“The UK’s manufacturing sector has always been agile and has shown in the last few months just how quickly it can adapt,” Phipson continues, “but as a growth-providing sector we must emerge stronger and better equipped to compete in the global trade environment to be able to do our bit effectively in the country’s economic recovery.”

In another initiative, Make UK is calling for the creation of a National Skills Task Force aimed at retaining key skills in industry by re-deploying employees, who have lost their jobs, to other companies and enabling them to be re-trained. A small scheme of this type was set up after the financial crisis, but Make UK believes there is now a case to establish a much bigger scale project on a national basis.

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