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37% of manufacturers think recovery will take at least a year

09 November, 2020

A survey of almost 200 UK manufacturers has revealed that more than a third (36.8%) believe it will take then longer than 12 months to return to normal trading, with more than a quarter (26.8%) thinking it will take 6–12 months. Just 26% of companies expect to be at full operating capacity by the start of 2021.

The survey was conducted by Make UK, the organisation that represents UK manufacturers, to back up a new economic action plan it is proposing which, it says, will help business and industry to steer a path through the long haul of the Covid crisis.

The three-point recovery plan, called Prepare, Implement, Lead, includes proposals for the current lockdown period, an exit strategy, and long-term economic and industrial recovery. Make UK says that the proposals will help place the UK on an equal footing with its international rivals.

The organisation is also offering to lead the manufacturing sector working with Government – as it did on the Ventilator Challenge – to build robust capacity for mass regular testing of the UK population. It would identify areas that need extra measures to deal with Covid-19 outbreaks and avoid future waves of damaging national lockdowns.

“Government has already done a huge amount to support business but, as we move into second lockdown, manufacturers and wider industry need a clear strategy that ensures we prepare, implement and lead from the start to prepare for the long-term,” says Make UK CEO, Stephen Phipson. “Businesses need as much certainty and stability as possible during these challenging times. Moreover they need consistency of support.

“The current piecemeal and ever-changing model of support is not giving firms sufficient time to plan and prepare,” he adds. “Consistent, longer-term support that mirrors our international competitors is now needed.”

As part of its action plan, Make UK is calling for an Industry Action Group that will feed weekly impact and intelligence data into the Government's Cobra committee on the level of support needed to protect businesses, employees and communities. It also wants Government to work with the UK’s trading partners to ensure that the country’s borders remain open for goods and services, and to protect key freight routes.

Make UK says its three-point plan will help industry to steer a path through the Covid crisis

This needs to be followed by a clear exit strategy with agreement between industry, scientists and the Government on when lockdown ends, including a fully functioning test, trace and isolate system.

Looking forward, as well as securing a good deal with the EU that avoids the “disastrous” prospect for industry of leaving without one, Make UK says that the Government must set out a “ready to go” strategy to fire up demand and help repair the economic damage.

To improve skills and create jobs, Make UK suggests that Government should:
• introduce an amnesty on National Insurance contributions and other employment taxes;
• establish a National Skills Taskforce to help redeploy skilled engineers and technical workers who have found themselves unemployed; and
• reform the Apprenticeship Levy to help arrest the sharp decline in new starts.

To boost investment & innovation, the Government should also:
• double the r&d tax credit and make it more accessible to SMEs;
• extend the temporary increases in investment allowances due to finish at the end of the year; and
• roll out 5G immediately across all parts of the UK.

Finally, to mitigate cash flow challenges and sustainable debt management, the Government should:
• waive business rates immediately for the manufacturing sector and reduce the costs of business rates in the long run; and
• introduce financial instruments that allow manufacturers to manage their debt sustainably.

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