Manufacturers call for furlough guarantee during any future lockdowns

Ahead of next week’s budget, industry body also urges government to extend Kickstart scheme and make improvements to statutory sick pay

Manufacturers have called for assurances that a furlough scheme will be made available to businesses in any future lockdown ahead of the chancellor’s budget statement next week.

In its submission to the government’s spending review – the results of which will be announced in the budget statement – Make UK, which represents the manufacturing industry, called for an extension of the furlough scheme, warning that continuing supply chain issues could hinder the sector’s growth.

“Not all industries are equal and not all are dealing with the same situations due to the pandemic domino effects that have exacerbated supply-side challenges,” the trade body said in its submission.

Make UK also called for assurances from the government that furlough would always be accessible during any future lockdowns, ensuring “confidence levels do not fall below a minimum level that enables firms to at least plan for the future should such restrictions return,” it said.

The publication of Make UK’s submission to the Treasury comes as the organisation's chief executive, Stephen Phipson, has been arguing against claims that the UK’s manufacturing sector is too reliant on low-wage foreign labour.

Speaking to the Guardian, Phipson said business has “moved on [from Brexit] and, government must do too”.

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“Growth is the right solution to making the most of the opportunities ahead of us and getting the job done,” he told the newspaper, adding that to encourage the necessary investment in technology and skills the government needed a “long-term vision for the economy that works with the grain of business to promote growth and wealth creation, not against it.”

Also in its submission to the spending review, Make UK called for the changes to statutory sick pay (SSP) to be expanded to give employees the right to claim from the first day of illness, rather than the fourth – an allowance that was made for coronavirus-related absences during the pandemic.

This would allow employees to protect their mental health and avoid longer absences in the future, its submission states.

The body also called for a year-long extension of the government’s Kickstart scheme, which funds employers to employ young people, beyond 2021 to help alleviate labour shortages, and called for the development of an online digital skills account for employees.

“With more and more employers and employees demanding more modular-based learning, a digital skills online account gives them the ability to upskill, as well as transfer those skills to other, growing sectors,” the submission said.

In its covering letter, signed by more than a dozen business leaders in the sector, Make UK warned that “job cuts are most likely when the economy starts to open again after a downturn because firms need the capital to reset”.

The letter added that the sector had a “key role to play in laying the foundations of our new economy” but lamented the increase in National Insurance contributions and income and corporation tax.

“We want to see the government set a bold, new, brave vision by backing manufacturing using the right policy levers in the next decade – and this includes focusing on creating a conducive business environment that unlocks further investment, rather than increasing the tax burden on business,” it said.