An extension to the government’s Job Retention Scheme is essential to protect highly-skilled jobs, manufacturers’ organisation Make UK has said.
Based on its latest tracking survey, the organisation calls for the government’s furlough scheme, which is due to close at the end of October, to be extended to critical strategic industrial sectors or risk the loss of key skills.
Meanwhile at the Labour Party’s online conference, shadow chancellor Anneliese Dodds outlined an alternative, three-step approach comprising a Job Recovery Scheme to enable businesses in key sectors to bring back more staff on reduced hours, with government subsidising a proportion of wages for the rest of the working week; a National Retraining Strategy to help people whose hours have been cut to increase their skills or to retrain in a new area; and a Business Rebuilding Programme to target government support to struggling but viable businesses.
Make UK’s latest Manufacturing Monitor tracking survey, published earlier in September, shows strong support from its members for an extension, with over 62% of companies either agreeing or strongly agreeing with the proposal.
Almost a quarter of companies (22.8%) said they disagreed with the government’s decision to end the scheme and that it should be extended to critical sectors, while 17% said it should be extended to any business. Another 18% said the scheme should end but another support scheme should be put in its place.
Make UK believes that an extension to the scheme might help avoid a second wave of redundancies which the survey shows are in the pipeline. Over two-fifths (42.4%) of companies asked said that they had already made redundancies. A further 30% said they intended to make redundancies in the next six months and another third (35.6%) said they may do.
Make UK argues that the aerospace and automotive sectors are most in need of an extension. They are at the cutting edge of technologies which will be vital to growth in the future employing many highly skilled, they are the largest investors in research & development, and are among the hardest hit by the pandemic, it said. Output in the automotive and aerospace sectors is forecast to fall by 33% (£4.6bn loss in value) and 14% (£1.1bn loss) respectively.
Similar schemes in Belgium and Germany have already been extended to the end of the year or the end of 2021. France has introduced a new long-term short-time work scheme in specific sectors where agreement between employers and unions can be reached.
Make UK chief executive Stephen Phipson 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. The starting point for this should be an extension of the Job Retention Scheme to those sectors which are not just our most important but who have been hit hardest. Failure to do so will leave us out of step with our major competitors.”
The CBI has also voiced the need for a successor to the furlough scheme.
Responding to Labour’s announcement, CBI chief economist Rain Newton-Smith said: “Labour clearly recognises the unrelenting pressure firms are facing. A focus on protecting jobs, upskilling workers and the need to support good businesses through this unprecedented crisis is sound and sensible. The [government’s] Job Retention Scheme has been a great success but for many firms the recovery still feels a dim and distant prospect. The UK urgently needs a new scheme that is more targeted, but still offers firms enough support to reach safer ground and keep more people in work. All parties agree that saving good jobs today is far better than picking up the pieces tomorrow.”
But she added: “Labour’s proposals risk adding red tape at a time when firms need to access support simply and quickly.”
Almost a fifth of companies are now at full operating levels (17.6%) while a further 28% are operating at between three-quarters and full capacity. Looking forward over a quarter (27%) expect to be at full capacity at the start of 2021.