Manufacturers call for furlough scheme extension

Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
·2-min read
Chancellor of the Exchequer Rishi Sunak during a visit to Peak Scientific in Glasgow, a Scottish manufacturer of gas generators for analytical laboratories. Photo: Andy Buchanan/PA Images via Getty Images
Chancellor of the Exchequer Rishi Sunak during a visit to Peak Scientific in Glasgow, a Scottish manufacturer of gas generators for analytical laboratories. Photo: Andy Buchanan/PA Images via Getty Images

Manufacturers have warned that Britain could lose crucial skills and fall behind international rivals unless the Chancellor grants a sector specific extension to the furlough scheme.

Make UK, the manufacturers group, said 62% of its members supported a manufacturing-specific extension to the government’s job retention scheme.

The group said an extension could help to stem a tide of redundancies in the sector, which risked erasing the industrial knowledge base built up over decades.

“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,” Make UK chief executive Stephen Phipson said.

Phipson said manufactures would provide economic growth and jobs as Britain enters the recovery phase, but said the sector needed “the greatest support possible” in the meantime.

Make UK said over 40% of its members had already laid off workers and a third of members planning to make cuts in the coming six months. Major manufacturers like Boeing (BA), Airbus (AIR.PA), Rolls-Royce (RR.L), Jaguar Land Rover, and Bentley have all announced thousands of job cuts so far this year.

READ MORE: Bank of England governor backs end of furlough scheme

A failure to protect the manufacturing sector would “leave us out of step with our major competitors and risk a loss of key skills when we can least afford to do so,” Phipson said.

Meanwhile, 9% of the UK’s manufacturing sector remain on furlough, according to the Office for National Statistics, which is below the economy-wide average of 13.2%. The job retention scheme is due to close in October.

Chancellor Rishi Sunak has resisted calls to extend the programme.

“I don’t think it’s fair to extend this indefinitely, it’s not fair to the people on it,” Sunak told Sky News last month. “We shouldn’t pretend there is in every case a job to go back to.”

Earlier this week Bank of England governor Andrew Bailey backed the Chancellor’s decision to end the economy-wide furlough scheme, saying more targeted policies were now needed.