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Motor industry calls for government help to avoid heavy job losses

Date: 23 June 2020   |   Author: Sean Keywood

The UK automotive industry needs more support from the government as it seeks to recover from the effects of the coronavirus pandemic, according to the Society of Motor Manufacturers and Traders (SMMT).

The organisation says a member survey has found a third of automotive workers are still currently on furlough, and up to one-in-six are at risk of redundancy.

The SMMT, which is today holding its annual International Automotive Summit (this year taking place online), therefore says the government needs to come up with a support package for the entire sector, including measures such as unfettered access to emergency funding, permanent short-time working, business rate holidays, VAT cuts and policies that boost consumer confidence.

SMMT chief executive Mike Hawes said: "UK automotive is fundamentally strong. However, the prolonged shutdown has squeezed liquidity and the pressures are becoming more acute as expenditure resumes before invoices are paid. A third of our workforce remains furloughed, and we want those staff coming back to work, not into redundancy.

"Government's intervention has been unprecedented. But the job isn't done yet. Just as we have seen in other countries, we need a package of support to restart; to build demand, volumes and growth, and keep the UK at the forefront of the global automotive industry to drive long-term investment, innovation and economic growth. 

"Support delivered now is an investment in the future of one of Britain's most valuable assets. Investment that we will repay many times over."

Despite the clearly pressing issue of coronavirus, the SMMT has also not forgotten about the difficulties the industry could potentially face from Brexit. 

In fact, according to Hawes, Brexit is: "Still the biggest threat to the long-term future of the industry."

He said: "Covid has consumed every inch of capability and capacity and the industry has not the resource, the time nor the clarity to prepare for a further shock of a hard Brexit. 

"That's why we do need to 'turbo charge' the negotiations to secure a comprehensive free trade agreement with the EU that maintains tariff and quota free trade.

"With such a deal, a strong recovery is possible, we can safeguard the industry and our reputation as an attractive destination for foreign investment and a major trade player."