Time to rattle Labour’s cage on aid for industry

A senior industrialist has urged colleagues and lobby groups to by-pass the Government budget process and start demanding urgent measures to help the UK manufacturing sector.

A senior industrialist urged colleagues and lobby groups last week to by-pass the lengthy budget process and start rattling the door of the Treasury now with demands for urgent measures to help the country’s manufacturing sector.

Tony Sweeten, chief executive of the Heckmondwike-based machine tool manufacturer 600 Group, and president of the Machine Tool Technologies Association, said the pre-budget submission, being prepared now in cooperation with around 20 other manufacturing trade bodies, should be brought forward in an attempt to circumvent the lengthy Budget process.

‘There should be meetings with ministers as soon as possible. If we wait for the Budget then it could be just too late for many companies,’ he said.

Sweeten said he detected an opportunity to influence a government that suddenly seemed more willing to listen to manufacturers. ‘Talking to ministers, I do actually feel more optimistic now – that we are going to get some action from the Government this time.’

But he said tough lobbying would be required. ‘There has to be no more pussyfooting about. It’s not a question of requests any more. It’s a matter of demands. We have already seen the dot com bubble burst and the problems faced by some of our blue chip companies. The Government cannot now just sit there and watch the disintegration of the manufacturing industry.’

The latest performance figures for the engineering industry showed that overall turnover fell by 6.6% in the three months to the end of July, hitting its lowest level for more than 18 months.

The machine tool industry itself suffered a poor first quarter and looks unlikely to make a recovery in the current three month period, according to National Statistics. Total sales fell by 6.7%, driven mainly by a fall in exports. Meanwhile orders at the end of July were down more than 11% on April’s figures, and showing a 25% drop against figures for the same period last year.

Last week both the CBI and the Engineering Employers’ Federation attacked the government for failing to give industry the backing it deserved. The CBI said the DTI was out of touch with the sector’s interests, weak in fighting its corner against other government departments and inefficient in administering initiatives to support business.

Business leaders want to see their message championed more effectively throughout government and less regulation imposed on their operations.

Softening attitude

But signs of a slight softening in the government’s attitude towards the hard-hit manufacturing sector were detectable to some last week with a pledge from a senior DTI official that his department understood the plight that many companies were in.

Speaking last week at the Hanover international machine tool show – the fourth largest industrial exhibition in the world – DTI engineering group assistant director Tony Keegan said that requests for enhanced capital allowances to boost investment were now ‘being taken seriously’ within his department.

Speaking on behalf of industry minister Brian Wilson, who was unable to attend the event for family reasons, Keegan said the government now accepted that UK manufacturers had been suffering. ‘We would be naïve to pretend that everything in the garden is rosy. Industry is now facing the most difficult conditions for a decade. Industrial production is weakening across the board.’

UK exhibitors, some of whom were visited by a delegation of DTI and trade association officials on the third day of the show, reiterated their calls for action over capital allowances.

‘The message I am getting from these companies is clear,’ Keegan said. ‘Companies are telling us that our main area is export, and we have been hit by the high pound or weak euro. We suffer ever-falling margins. They are paper thin. And we need the government to send out a strong message that will act as an encouragement to invest.

‘I am taking this message back with me, and will be asking for it to be included in any submission to the Chancellor. I can’t speculate on his response. But your messages are well-received, we have heard them before, and we are considering them very carefully,’ he said.