A key priority for SMMT, our members and the industry as a whole has been ensuring the promised provision of liquidity from the government to businesses materialises promptly. That funding is starting to flow, with important government-backed schemes opening this week helping to support industry and automotive businesses nationwide.
The Coronavirus Large Business Interruption Loan Scheme is now open for applications to provide a much needed cash injection to businesses with a turnover of more than £45 million. The smaller CBILS scheme is beginning to pay out but we still have concerns about all these schemes and some onerous criteria around cash forecasting, solvency tests and, in some cases, the requirement for investment grade credit ratings.
On a positive note, the Coronavirus Job Retention Scheme opened its online application portal this week, providing support to firms who have had to furlough staff. With more than 140,000 companies applying on the first day and no apparent system failure, the efforts of all involved should be applauded. Furthermore, the scheme has now been extended until the end of June, and we would like to see further evolution in terms of flexibility as the industry restarts to ensure the continuation of a vital source of funding whilst industry deals with likely demand and supply fluctuations.
Access to finance and liquidity remains one of the most critical issues for business and we continue to raise the matter in daily calls with government ministers and officials. Cash in the bank is more important than ever and the pressures on cashflow will intensify as the sector begins to start up again. Additional support measures such as business rate relief and National Insurance holidays would still be welcome, and are just two of the issues SMMT raised again with ministers on a call this week.
The wider sector’s next challenge will be delivering that safe, sustainable and successful restart. In mainland Europe, production and retail is beginning again in some markets and we saw only yesterday announcements of the likely timing for some UK production facilities. This is vitally important to the companies themselves but also to the economy and society but must be matched with an early opening of automotive retail to ensure we have cleared any backlogs and can stimulate demand for these products.
SMMT is engaging with members and government to get measures in place to support this. This will help put the industry in a position where it can deliver for the economy again, supporting the long-term competitiveness and productivity of a sector that is critical to supporting jobs and communities right across the country.
One thing the crisis has highlighted is just how integral transport and mobility is to society in ensuring essential supplies can be delivered and critical workers and services can do their jobs. New Motorparc figures released by SMMT on Tuesday revealed that vehicle ownership in the UK has now topped 40 million, with many passenger cars, supermarket delivery vans and trucks, ambulances and more still in use supporting the country through the pandemic.
To help facilitate the supply of some essential vehicles and equipment, we were pleased to see government’s announcement this week of a temporary Individual Vehicle Approval (IVA) scheme. Given the DVSA is under severe pressure with much reduced resources, the use of technology to help increase IVA capacity is very welcome and comes after considerable constructive discussions between SMMT, Government and members. The scheme will go live on Monday, and you can find out more here.
IVA and how to apply for the temporary scheme is the subject of a webinar hosted by SMMT and DVSA on Wednesday 29 April at 10:30 to 11:30. To register, and submit questions in advance, please email SMMT here.
Meanwhile, our weekly coronavirus webinar on Tuesday 28 April will address industry restart, furlough and finance and I encourage you to register by visiting our online COVID-19 hub. Here you’ll also find all of the latest government support, business advice and guidance.
