Manufacturers take their woes to chancellor

Industry bodies have given up on the DTI, despairing of its ability to stand up to the Treasury, and have begun taking their concerns direct to chancellor Gordon Brown instead.

And this tactic appears to be paying off, MTTA president Tony Sweeten told an audience of senior industry figures this week.

Manufacturers will ask the chancellor to launch a 10-year strategy to rebuild the UK’s industrial base in the March Budget. Sweeten said, ‘We will urge the chancellor to say he will not allow manufacturing to drop below its current 18 per cent of GDP, and to launch a strategy to rebuild it to over 20 per cent.’

Sweeten said : ‘The Treasury is now throwing back at us statistics that show it is actively researching the various scenarios associated with the success or failure of manufacturing, including its effects on employment, balance of payments and many other areas.’

He called on the chancellor to rebuild confidence by introducing permanent 100 per cent first-year capital allowances for plant and machinery and a tax credit for training. But he said there was much manufacturers could do to make themselves more competitive, by investing in training and new technology. ‘We have a clear choice before us: to talk ourselves ever deeper into recession, or to take the actions we need to make ourselves ever more innovative, productive and competitive,’ he said.

Trade secretary Patricia Hewitt urged manufacturers to keep faith that the industry has a viable future, despite recent heavy job losses. Manufacturers risked damaging the industry by talking it down, she said.

The CBI insisted there is still room for a further quarter-point interest rate cut, as it released its Quarterly Industrial Trends Survey, revealing manufacturers are cutting prices to hold on to customers as both export and domestic orders fall.

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