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28 August 2020

If ministers don’t act, our aerospace and automotive industries are heading for a crash

The UK government has been silent while France, Germany and Spain allocate billions of euros to investing in the future.

By Lucy Powell

Time and again, ministers have received warnings from our world-leading manufacturers that a failure to provide sectoral support for businesses in distress will cost jobs and threaten our vital aerospace and automotive industries. 

Britain should be proud to be a leading player in aerospace and automotive manufacturing. These sectors, and their supply chains too, provide millions of high-paid, high-skilled jobs in areas of the country that need them most, outside the M25.   

Our country has led the world in aerospace and automotive development, from producing the world’s first commercial jet airliner, to today’s innovation in battery science, exporting technology and goods across the globe and contributing to a successful economy and prosperous communities. These companies power the engine of global Britain and our drive for a cleaner, greener future. 

Yet they are now faltering, and ministers’ failure to accept these sectors are being disadvantaged in the international response to the Covid-19 crisis means that the engine is sputtering, and we’re in danger of being overtaken, as our competitors across the globe pump-prime for recovery. 

It’s not just a lack of targeted sectoral support or measures to boost demand like those we’ve seen for the housing market, or hospitality, but that our global competitors are supporting their home-grown industries with such ambition that it is now significantly increasing the impact of the damage that companies face here. Cruising in the slow lane is a mistake in and of itself, but it also means our competitors will leave us further behind. 

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Many businesses in these sectors would have had full order books before the coronavirus pandemic hit. But automotive industry association SMMT reports that car sales are down by half for the first six months of this year. Aviation industry body ADS reported that aircraft orders were down 75 per cent in May compared to the same month last year. Now, through no fault of their own, many companies find themselves in jeopardy, and are crying out for help from a government that is failing to live up to the Chancellor’s pledge to do “whatever it takes” to see us safely through the crisis and take us back to the front of the pack.   

Yes, furlough support and the loan schemes have provided respite for some, but we have already seen thousands of job losses across both sectors: Rolls Royce in Derbyshire, Airbus in Broughton and Filton, GE in Scotland, and Bombardier in Northern Ireland, alongside those at McLaren, Aston Martin Lagonda, and at DHL for workers involved in making Jaguar Land Rover vehicles in the Midlands. 

[see also: Brexit isn’t done: What next for the UK’s car industry?

Labour has long called for more support for ailing industries in order to protect jobs, and improve our position relative to our international challengers. Promised investment in green tech should be delivered, and ministers should bring forward orders in the pipeline to save jobs now. 

In response we’ve had silence from ministers while France, Germany and Spain allocate billions of euros to overtaking us. €50bn of Germany’s stimulus fund is being targeted at clean transport and low emission vehicles, including doubling the purchase premium for electric vehicles to €6,000, pumping €2.5bn into e-charging infrastructure and battery technology alongside €Ibn for cleaner, quieter aircraft. France’s €15bn package includes funds to accelerate research into environmentally friendly technology, such as electric- or hydrogen-powered commercial jets, with an ambition to achieve a carbon-neutral plane by 2035 instead of 2050. Spain’s support package for automotive earmarked almost 70 per cent of funds to the sector’s “value chain”, alongside replacing older models with more energy-efficient vehicles. What’s more, schemes to protect employment have been extended to up to two years. 

Not only does this mean that we will fall behind on the clean and green technologies driving the future, but businesses will move investment to places with better rewards – other countries where there is more generous support and greater investment opportunities. We will see a brain drain from Britain unless ministers act. 

We want our manufacturers to succeed, to maintain and improve their world-leading position, and motor ahead to support our future prosperity. Unless ministers urgently change direction, the downturn will turn into a crash and manufacturers will be left running on empty, with communities and our country losing out. 

Lucy Powell MP is Labour’s shadow minister for business and consumers 

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