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Coronavirus: Six industries still crying out for help

Bethnal market flower stalls in London

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As the coronavirus pandemic continues, more and more sectors of the economy are feeling the strain.

And with banks under fire for denying emergency loans to some firms, it’s hardly surprising that the UK’s government is facing more calls for direct intervention.

The list covers big chunks of the country’s infrastructure and vital transport links, but also other, less obvious economic areas that are no less important to society.

But all of them have one thing in common: they fear that the coronavirus crisis will inflict lasting damage on them.

Airlines

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The aviation industry was one of the first sectors to petition the government for a bailout. As country after country has imposed restrictions on travel in a bid to halt the spread of the virus, airlines have been seeking state aid to avoid going out of business for good.

At the end of last month, a group of 38 MPs wrote to Chancellor Rishi Sunak urging him to take steps to support airlines during the coronavirus pandemic.

The move was backed by the airline industry, with Tim Alderslade, chief executive of Airlines UK, saying: “We are now entering the danger zone, and we urge government to change tack and start to engage on a sector-wide basis before it’s too late.”

Virgin Atlantic, for one, has indicated that it intends to ask for a government bailout worth hundreds of millions of pounds.

But so far, Mr Sunak has said airlines should find other forms of funding and not turn first to the government.

Road haulage

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Other forms of transport are also facing tough times because of coronavirus. The road haulage industry, which moves goods from warehouses to shops across the country, is the latest to seek more help from the government.

Richard Burnett, chief executive of the Road Haulage Association, told the BBC’s Today programme that he was hopeful about the prospect of aid.

“Government are definitely recognising how critical and how important we are,” he said. “We are keeping the country fed at the moment.”

But for one haulier, Andrew Howard, who owns Peterborough-based PC Howard, financial relief can’t come soon enough. He said that because non-essential shops had been closed, the firm was moving fewer goods.

“We are now moving our lorries only partly loaded, typically two-thirds loaded,” he told the Today programme, “and that means we are losing money every single day, every time we send a vehicle out.”

Ferries

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Ferry companies transport people and goods in and out of the UK. But because of the steep drop in passenger numbers, the firms are cutting back on services, putting essential supplies of food and medication at risk.

Those suspending their passenger services include P&O Ferries, which carries about 15% of the UK’s imported goods, including food and medicines. It is furloughing more than 1,000 staff, using the government’s job retention scheme.

P&O Ferries told the BBC that the company needs £257m to keep going. The BBC understands the company wants £150m of that to come from the government.

Bob Sanguinetti, chief executive of the UK Chamber of Shipping, told the BBC: “What we’re asking for is not a wholesale bailout, it’s for the government to share and underwrite some of the risk and the costs to allow the ferry companies to continue providing that vital, lifeline service to the country.”

Steel

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As manufacturers and construction firms shut down their operations, demand for steel has slumped. Industry group UK Steel has said that companies in the sector are “fast approaching a cashflow crisis”.

The lobby group says many steel producers fall outside the scope of existing emergency loan schemes and need more specific help.

Richard Warren, UK Steel’s head of policy and representation, told the BBC: “The key message is one of speed – we are looking for a solution that delivers the liquidity support as quickly as possible.”

He called on the government to amend and expand its current schemes to ensure steel companies could access the support available.

Horticulture

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Neil Alcock is the managing director of Seiont Nurseries in Caernarfon, north Wales

Springtime is here – and in normal times, garden centres would be doing a roaring trade.

But with all non-essential shops closed down, all those plants and shrubs can’t find their way to the public.

That’s terrible news for plant growers, who are seeing their assets rot away in front of them.

The Horticultural Trades Association (HTA) has warned that up to a third of producers could go bust. It is asking the government for financial assistance of up to £250m to help the industry avoid collapse.

Neil Alcock, managing director of Seiont Nurseries in north Wales, told the BBC that the firm had seen a downturn costing it about £100,000 worth of orders.

He added: “We had sold thousands of plants, but then cancellations came in from everywhere. No ifs, no buts, the whole retail supply chain stopped for us.”

Charities

From food banks to mental health experts, the charitable sector is providing plenty of people with support in these troubled times.

But charities themselves are reeling from the financial impact of the crisis, with Oxfam and Age UK furloughing up to 70% of their staff during the coronavirus pandemic.

Caron Bradshaw, chief executive of the Charity Finance Group, tweeted that the charity sector needed its own package of support from the government.

“Please recognise the impact losing charities – big and small – will have on our society,” she said, adding that charities were “essential to the fight to rebuild after this unprecedented disaster is over”.

“Charities are to society what bees are to the environment. We work away, often in the background, often unnoticed,” she said.

What next?

So what yardstick should the government use when assessing these competing cries for help?

Russ Mould, investment director at AJ Bell, said that a good rule for government aid should be “bailing out people, not bailing out companies”.

He acknowledged that the airline industry in particular had seen a “frightening and spectacular” collapse in demand, but added that people would argue that companies “should have been prepared for at least some kind of downturn”.

“Maybe you do help companies out, but you do need to get to the point where shareholders and creditors have taken a hit first,” he told the BBC.

“You can’t look as though you’re bailing out the 1% at the expense of the 99%.”

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