Why manufacturing is key to post-pandemic recovery

As the UK emerges from the Covid-19 crisis, the manufacturing industry should be front and centre of the government’s strategy.

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The Covid-19 crisis has been like no other in our lifetimes. We have seen the tragic loss of life as a result of infection as well as the terrible effects this virus has had on people’s jobs and livelihoods. We have seen the government move quickly to support both people and businesses, paying salaries and guaranteeing loans.

This was made possible by a great coming together of trade unions and business organisations with the state to agree the best way forward, secure jobs and protect businesses. While this crisis has sadly seen the worst happen to some, it has also brought out the best in so many, with the NHS and other front-line services risking their lives to keep us safe. 

British industry has also stepped up, keeping the economy going and enabling front-line services to do their jobs through the provision of manufactured goods. Industry has responded admirably to this call, from the Ventilator Challenge consortium led by Dick Elsy and the High Value Manufacturing Catapult to the myriad manufacturers who produce personal protective equipment (PPE) or who have adjusted their production lines to be able to do so. 

For too long, successive governments of all colours have looked too much to other sectors to drive our economy, but in crisis we have seen the true value of manufacturing, and it is so much more than just the economics; it is the beating heart of the country. 

It is imperative as we look to restart our economy and emerge from this crisis that British industry is front and centre of the government’s strategy. This will mean taking a practical and business-led approach to easing the financial support currently in place, supporting businesses in getting their staff back to work and focussing fiercely on the future to ensure we are in a better place after the recovery than when we entered into it. 

As we move beyond the immediate crisis and into the recovery phase, government must be cognisant that this recovery will not be linear, and therefore will have to act accordingly. This will mean taking a staggered approach to returning to “business as usual” and, as we adapt to this new normal, government and industry must collaborate to enable economic growth.

The most pressing issue is financing the recovery. The government has acted quickly and emphatically to protect jobs and businesses, but industry will not go back to normal overnight. Indeed, much of British manufacturing has only shut down due to dropping demand or interrupted supply.

This means that returning to work will take time and be costly, posing a challenge when many businesses have used up their cash reserves as they kept production running in spite of plummeting orders. The potential for a phased return, different ways of working and slowly growing order books will mean that businesses will need ongoing support and government cannot just turn off the taps. 

However, even if we get the finance right, we cannot even begin an economic recovery without making sure people are safe and that they are can be supported through the return to work and in case of any recurrence or spike in the virus. A non-linear return to work seems likely, but this will mean government will need to take a matched approach to support it. Manufacturers need to get back to doing what they do best and adding value to the economy but they may also need to enact social distancing while doing so.

This will require government to think creatively and consider different ways of working such as supporting short-time or part-time employment to enable businesses to meet demand but also keep their workforces safe. And while we hope we will beat it this time, if there were to be a second spike of the virus, businesses may need access to the furlough scheme again, so government will need to be prepared to maintain it if required.

Getting the financial situation and the safety and security of workers right is key. This will only be possible with continued partnership between employers, unions and government. But as we look to kick-start the economy and boost demand, government must also focus on what comes next. We have seen how important manufacturing has been in supporting the economy in this time of need, but in the future, government needs to make sure that our manufacturing capacity not only meets the needs of the economy in normal times, but that it is ready to meet any future crisis, too. This will mean carrying out a mapping exercise of our current capacities and assessing where investment is needed.

It is also important to understand how businesses can be supported to upgrade their production to meet extreme demand in as short a period of time as possible, and what government can do to enable and support that. But industry also needs to be underpinned by research and development, and it is crucial that, as we look to recover, we protect that spend and capacity.

While this crisis has been extremely testing on almost every level, as we look to the future there is much to be positive about in the world of manufacturing. British industry has once again stepped up and demonstrated its value beyond raw economics, and the government has enabled this vital work by supporting both workers and businesses. If government works with industry to get the financing of the coming recovery right, while also continuing to protect workers and support business, manufacturing will once again flourish. Harnessing Britain’s manufacturing potential has never been more important.  

Jack Dromey MP & Mark Pawsey MP are co-chairs of the All-Party Parliamentary Manufacturing Group (APMG)

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