Government strategy for containment will make business support vital, says Logistics UK

Wednesday 23 September 2020

Prime Minister Boris Johnson’s announcements on the future strategy to tackle COVID-19 abandons plans for economic growth, in favour of containing the virus, according to Logistics UK.  And while the ambition of Mr Johnson’s plans is laudable, the business group’s Chief Executive David Wells is challenging government to provide support for sectors of industry still reeling from the impact of the virus and subsequent lockdown on revenues and employment.  Without further intervention from government, he is concerned that plans for recovery will fail and thousands more jobs will be put at risk:   

“After initial stimulus from plans such as Eat Out to Help Out, and the stamp duty holiday, growth in the economy is faltering and delivering little or no uplift in revenues,” he said.  “Without improved revenues, businesses will be unable repay loans and deferred tax payments, while faced with taking on increased costs as the furloughing scheme ends.  Forget the credit crunch – without a strong, consistent recovery in economic activity, businesses are now facing a cash crunch and their survival is in doubt, particularly in sectors such as hospitality and events where any prospect of growth has now stalled. The Government must act now to support those sectors hardest hit by the downturn in the economy to avoid a further avalanche of redundancies, as businesses adapt to cope with the government’s new strategy for economic decline. 

With the latest unemployment statistics showing a 4.1% increase in those out of work in the three months to July, and government support for employers being phased out by the end of October, Mr Wells is warning that the future success of UK PLC is now under threat: 

“Without further support for businesses which have kept the UK trading during the worst months of the pandemic, the recent flurry of redundancies from big brands like Marks & Spencer, John Lewis and Easyjet will only be the tip of a fast-approaching iceberg,” he asserted.  “Logistics is the perfect barometer of the nation’s financial health, since our work affects every area of the economy and the health of our industry is directly linked to that of the nation as a whole. 

“Our members are the organisations which deliver what the country wants and needs to keep operating, from schools and hospitals to retailers, factories and homes. If all areas of our industry are to survive the impact of a second wave of the virus, and the government’s new strategy which prioritises containment of the virus over economic recovery, then plans to support businesses must be an urgent  priority, so that redundancies, spiralling costs and business closures do not heap more misery on those charged with keeping the nation stocked with goods and services on a daily basis."

Logistics UK (formerly FTA) is one of the UK’s leading business groups, representing logistics businesses which are vital to keeping the UK trading, and more than seven million people directly employed in the making, selling and moving of goods. With COVID-19, Brexit, new technology and other disruptive forces driving change in the way goods move across borders and through the supply chain, logistics has never been more important to UK plc. Logistics UK supports, shapes and stands up for safe and efficient logistics, and is the only business group which represents the whole industry, with members from the road, rail, sea and air industries, as well as the buyers of freight services such as retailers and manufacturers whose businesses depend on the efficient movement of goods.