UK motor industry calls for Covid-19 'restart' package

Britain’s motor industry has called for a bespoke government “restart” package as it warned one in six jobs in the sector could be at risk from the impact of the coronavirus pandemic.

The industry added to the weight of those calling for a cut in value added tax, which Finance Minister Rishi Sunak is reportedly considering, and a possible car scrappage scheme.

With 30% of auto workers on furlough, the Society of Motor Manufacturers and Traders (SMMT) said the need to safeguard jobs was a major priority. It also warned of the damage a possible hard Brexit on top of the pandemic could cause.

A survey of SMMT members found that around 24,000 jobs were at risk of redundancy.

“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,” said SMMT chief executive Mike Hawes.

“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.”

Hawes urged the government to consider measures such as unfettered access to emergency funding, permanent short-time working, business rate holidays, VAT cuts and “policies to boost consumer confidence” and drive demand.

“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,” he said.

Graham Hoare, chairman of Ford of Britain, said a scrappage scheme would give a more targeted boost to demand: “A VAT change would be helpful but we’re looking to get people with older vehicles into the showroom.”