INDUSTRY leaders are stepping up calls for the Job Retention Scheme to be extended to help the economic recovery.

Make UK has warned that skills could be lost, leaving the UK in the "slow lane", behind competitors.

The manufacturers' organisation said a survey of more than 220 companies nationally showed strong support for extending the furlough scheme, which is set to end next month.

Almost one in four respondents disagreed with the government's decision to end the scheme, saying it should be extended to critical sectors.

Make UK said an extension could help avoid a second wave of redundancies which the survey shows are in the pipeline.

More than two-fifths of companies surveyed said they have already cut jobs, while almost a further third revealed they intend to in the next six months. The aerospace and automotive sectors are those most in need of an extension, the survey found.

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Chief executive Stephen Phipson said: "The protection of key skills should be a strategic national priority as this will be the first building block in getting the economy up and running.

"Ensuring that those sectors which are at the forefront of technology and will provide the growth sectors and high-skill jobs in recovery should receive the greatest support possible.

"The starting point for this should be an extension of the Job Retention Scheme to those sectors which are not just our most important but who have been hit hardest. Failure to do so will leave us out of step with our major competitors and risk a loss of key skills when we can least afford to do so."

Meanwhile the CBI suggests the government should create a bank to help deliver infrastructure projects and support the economic recovery.

The leading industry group says the financial strain, caused by the Covid-19 crisis, must not be allowed to derail infrastructure spending plans.

Matthew Fell, chief UK policy director at the CBI, said: "Prior to the outbreak of Covid-19, businesses welcomed the government's commitment to deliver an 'infrastructure revolution'. The government must commit to an approach that gives confidence to investors and capitalises on the attributes of businesses and public sector establishing itself once again as a world class destination for investment."