The Society of Motor Manufacturers and Traders (SMMT) has called for a dedicated restart support package from the government to safeguard the jobs of those in the automotive sector.
A survey conducted by the SMMT revealed that up to one in six automotive jobs are at risk of redundancy due to the impact of Covid-19. Already, more than 6,000 UK automotive jobs cuts have been announced, while a third of all employees currently remain on furlough.
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SMMT is calling on the government to address this with a support package for the entire sector to help drive demand and ease cash flow. Measures including unfettered access to emergency funding, permanent short-time working, business rate holidays, VAT cuts and policies that boost consumer confidence would accelerate a sustainable restart for the market and manufacturing – a pre-requisite to the recovery phase, and to unlocking the investment needed to drive a green future for the UK.
Mike Hawes, SMMT Chief Executive, 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.”
Commenting on the current lack of any UK trade agreement following Brexit, Hawes 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.
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By GlobalData“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.”
The SMMT recently issued a joint statement with the Japan Automobile Manufacturers Association (JAMA) hailing a potential trade agreement between the two countries.
“In order to further enhance this long-term partnership, SMMT and JAMA believe that the conclusion of a new Japan-UK FTA based on the terms of the Japan-EU EPA – and its immediate implementation after the end of the transition period – would greatly benefit economic prosperity both in the UK and Japan,” the statement said.
