Pressure on manufacturing a key headache for UK chancellor Rishi Sunak’s latest budget

LONDON, UNITED KINGDOM - November 10 2020: Chancellor of the Exchequer Rishi Sunak leaves Downing Street to attend the cabinet meeting.

With the ongoing coronavirus continuing to affect markets around the world, the fact job losses, uncertainty and business disruption remain a factor in the industry and all areas of the economy, is unfortunately not unsurprising.

But the latest sector development of redundancies at the UK’s Valeo Confectionery was particularly unwelcome amid the added complexities of Brexit that have placed a wide range of British businesses under pressure. It’s little wonder that all eyes will be on what UK chancellor may yet conjure from his economic emergency toolbox in the latest budget.

As far as this latest confectionery job loss case is concerned, it seems that despite some segments enjoying comparatively buoyant times as retailers record boom conditions of crisps, snacks and premium chocolate, it’s clearly not an even distribution across the full spectrum of confectionery. A drop in sales of traditional ranges, namely liquorice has been held responsible for the 37 jobs being cut at Valeo – with industry reports that the company’s parent business may well be up for sale itself, valued at around £1.5 billion.

These latest redundancies are especially troubling given the long-term trend within the sector that has seen considerable consolidation with the confectionery manufacturing market in the UK over the past three decades. With larger companies clearly able to absorb more challenging economic periods than most SME-sized operations, it’s again not too surprising that the UK is gradually losing some of its traditional names within the sector, which would be a particular loss if this is pattern continues to play out on its present path.

What can be done about it? Chancellor Sunak is facing the unenviable task of attempting to claw back Britain’s highest ever level of debt, presently standing at an eye-watering £2 trillion, having for the first time in over 50 years exceeded 100% of economic output, which had all-but made tax rises inevitable in this week’s national budget. As he delivered his plans this lunchtime, it appears this fate has in fact been avoided for now as ‘not the right time’.

While it’s fair to say the government has attempted to support business on a national level with the furlough scheme having already been extended to lessen the prospect of job losses- which is widely anticipated to be extended again (just confirmed to September) to fall in line with the ‘roadmap’ for ending coronavirus measures, far more direct and indirect innovation will be required to help bring about a badly-needed recovery.

We can only hope that comes to pass in a complex and challenging environment that continues to impact on all spheres of the manufacturing sector.

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