Chancellor of the Exchequer Gordon Brown should allocate more funds to education and transport in next month’s government spending review, according to a submission by manufacturing trade associations published today.
The proposals – backed by 22 bodies including the Engineering Employers’ Federation and the Machine Tool Technologies Association – include a real annual increase in education spending of over 4% each year up to 2004/5; extra funding for modern and graduate apprentice schemes; and enhancement of higher level technician skills.
Transport spending should be doubled to around 2% of gross domestic product over the next 10 years to reduce costs and speed up delivery times, the organisations say.
But the document says the government should not allow overall spending to rise faster than growth in the economy as a whole. It warns that projected government borrowing could create upward pressure on interest rates and inflation.
Stephen Radley, EEF chief economist, said: `Decisions taken on spending will undoubtedly have a major impact on manufacturing businesses. It is clear that the government has a major role to play in supporting companies’ efforts to improve both productivity and competitiveness.’
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