'Many firms are telling us they are running out of cash,' Chambers of Commerce say as they urge Government to ramp up support for firms impacted by JLR crisis

In a letter to the Department for Business and Trade, the Greater Birmingham, Black Country and Coventry & Warwickshire Chambers – who collectively represent 5,000 businesses – say further measures may be necessary to help firms further down the supply chain.

Although the Government last week announced a £1.5 billion loan to support impacted businesses, it has not been made clear how firms will access the fund.

 In the meantime, JLR - which has large manufacturing bases alongside the M54 near Wolverhampton and Telford, as well as in Solihull - is reportedly finalising a deal to lend up to £500 million to its suppliers.

The letter from the Chambers – sent on Friday to Parliamentary Under-Secretary of State Chris McDonald - asks the DBT to clarify how the Government will work with Coventry-headquartered JLR to identify those who are in greatest need of support and how it plans to ensure the money reaches the most vulnerable businesses quickly and effectively.

It says: “We welcome the Government’s announcement of a £1.5 billion fund to support impacted businesses and the work you have carried out with Richard Parker, Mayor of the West Midlands to understand the severity of the situation.

“However, local businesses urgently need clarity on two points: 1) How will the Government work with JLR to identify businesses further down the supply chain, and ancillary businesses that sit alongside the supply chain, that have been impacted and are in greatest need of support? - and 2) What mechanisms will be put in place to ensure the money reaches the most vulnerable businesses quickly and effectively?

“Related to these two points, we will also need to consider whether the terms of the agreement will include any clauses related to supply chain benefit and how distressed suppliers can access the funding.

“Anecdotally, many firms are telling us they are running out of cash and have no guarantee of future sales.

“Whilst we will continue to raise awareness of HMRC’s time to pay scheme, if the situation worsens, further measures may be necessary.”

JLR has the largest supply chain in the UK automotive sector, which employs around 120,000 people and is largely made up of small and medium-sized businesses.

The Chambers’ letter said Government must learn from the collapses of MG Rover in 2005 and Carillion in 2018.

It recommends interventions such as financial and lending support through the British Business Bank and HRMC support through deferred tax payments, instalment arrangements and suspension of debt collection.

The letter adds: “Although not pursued in 2018, offering employer National Insurance Contribution payment holidays would also be worth exploring.

“We urge you to ensure the response to this crisis is as swift and comprehensive as possible, protecting thousands of West Midlands jobs and preserving the resilience of our region’s economy.

“As always, the Greater Birmingham, Coventry & Warwickshire, and Black Country Chambers of Commerce and our members stand ready to work with Government to design and deliver effective support measures.”

 JLR was reportedly due to resume some manufacturing production today (Monday) at its engine factory in Wolverhampton as it continues to recover from the cyber attack which happened at the end of August leaving production on pause since the start of September.