This article is more than 1 year old

This article is more than 1 year old

Three Labour frontbenchers have written a joint letter to the government to seek a package of support measures for UK manufacturers, saying continuing uncertainty over Brexit is causing huge damage to the sector.

Manufacturers support 2.7m jobs and contribute 45% of UK exports, says the letter, from the shadow business secretary Rebecca Long-Bailey, Peter Dowd, the shadow chief secretary to the Treasury, and Chi Onwurah, the shadow industrial strategy minister.

“At the heart of the industry are small and medium businesses who have the least financial flexibility and are therefore hit the hardest,” they say. “It is essential that they are not allowed to fail because of Brexit uncertainty.”

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The letter was addressed to the chancellor, Philip Hammond, and the business secretary, Greg Clark, both of whom are vehement and regular critics of a no-deal Brexit.

However, both seem likely to return to the backbenches once Theresa May steps down later this month.

Both the challengers to replace her, Boris Johnson and Jeremy Hunt, have promised to leave without a deal if necessary, with Hunt saying he would be willing to tell business owners whose firms went bust that it was a sacrifice worth making for Brexit.

The letter from the shadow ministers calls for “urgent action to protect British manufacturing in the face of ongoing Brexit uncertainty and changing Brexit dates”, citing worries raised by manufacturing firms and the industry representative body Make UK.

Amid a slump in business investment intentions, Make UK last month described the idea of the UK leaving the EU without a deal as “economic lunacy”.

The letter cites statistics showing that by February, manufacturing stockpiling had hit the highest ever level in any of the G7 major industrialised nations since records began, with surveys showing two-thirds of manufacturers considering stockpiling or already doing it.

“Those data, combined with a discrepancy between orders and outputs on a scale not seen in recent years, demonstrate clearly that manufacturers are responding to potential supply-chain disruptions by increasing buying activity and stockpiling,” the letter warns.

“This has serious implications for the financial viability of some manufacturers which are compounded by the fact that orders are on hold, with customers concerned that their goods may get stuck at ports or not able to pass the border.”

The shadow ministers say stockpiling put a strain on businesses’ cashflows, saying this had caused a dip in confidence.

“Cash tied up in stockpiled goods is money not invested in skilling workers, developing new technologies or increasing exports,” they say.

“We call on the government to work with unions, industry bodies and banks to ensure that a package of appropriate support is made available and that relevant authorities and financial institutions are encouraged to show forbearance to exposed businesses.”

On Friday, the Brexit secretary, Steve Barclay, told Sky News that it was impossible to rule out the idea that a no-deal departure could prompt a recession.

Asked whether May agreed with this, her spokesman said: “The PM has been clear that in the event of no deal, there would be disruption. But she’s also said that we are making preparations to keep that disruption to a minimum, and that work is ongoing.”