Hewitt must kick-start regional aid to industry

Patricia Hewitt’s call to set up a ‘Manufacturing Summit’ next month looks on the face of it like a talking shop.

We all know what is really needed to get manufacturing moving, and it does not come cheap. It requires Gordon Brown and his Treasury advisers conceding to demands that manufacturers have been making consistently over the past three years. It’s about tax incentives, business rates, and the abolition of the climate change levy. And from the Monetary Policy Committee, it means further cuts in interest rates.

The figures announced this week from the EEF, which were compiled before 11 September, speak for themselves: pages of bar charts plunging downwards. Survey and official data point to continuing recession in engineering. And the contraction in our sectors looks set to run deeper than even the slump of 1990 to 1992.

So what can a Manufacturing Summit achieve? Well, it would be easy to dismiss it right now, sticking it in the same bracket as the handful of ad hoc meetings that Stephen Byers held during his time as trade secretary. The great and the good, jawing over the knowledge-based economy.

But the Hewitt versions may be a little different. Expect to see the usual grouping of business, unions, ministers and officials. The focus, though, will be on the Regional Development Agencies. With more say over how they spend their funding, and more money to spend, RDAs are in a better position than ever to do something for manufacturing. For some regions, manufacturing is already priority number one.

Advantage West Midlands, for example, running the Longbridge Task Force, has shown how effective targeted regional aid can be.

So Hewitt should now tell the RDAs to stop admiring their neatly-bound strategic plans, and to go out and start spending money. Right now. Today.

But she should also tell Gordon Brown that it is utterly pointless to inject support for manufacturing in the regions via the RDAs, only to syphon it back to the Treasury through the Climate Change Levy and other fiscal abuses.