Report urges cash aid for manufacturing firms

February 18, 2009

By Alan Jones, Press Association

Emergency funding should be extended to manufacturing firms if the Government is serious about helping the "real economy", a new report urged today.

The Work Foundation said that because the strength of the UK's financial services sector was now in question, manufacturing represented one of the best chances for an economic upturn.

Companies should be given the same access to funds as the support announced for financial services, it was argued.

Ian Brinkley, associate director at the Work Foundation, said: "The question needs asking - what are we going to live on in the future? Modern manufacturing is once again facing a battering from the recession, but it would be a big mistake just to write the sector off.

"We need to preserve as much of the industrial base as possible because once it is lost it is near impossible to get back again. Despite the mythmaking around the demise of manufacturing, the sector remains extremely important for jobs, exports and GDP."

Manufacturing in the UK had been transformed in recent years and deserved more support for research and development, said the report.

Ministers were pressed to introduce a short-time working scheme to help manufacturing firms avoid making job losses in the current recession.

TUC general secretary Brendan Barber said: "This is an extremely welcome report that shows the importance of manufacturing not just to today's economy but to our post-recession future.

"Other European countries know the importance of today's high-tech manufacturing firms keeping skilled teams together during the recession. This is why the Government must act to help firms keep their greatest asset - the skills and knowledge of their workforce - through the recession."

Derek Simpson, joint leader of Unite, said: "I'm glad to see that the Work Foundation is joining our campaign to support manufacturing during the recession.

"Unite is urging the Government to learn the lessons of past failures to support manufacturing and begin a programme of emergency support for strategic industries of which car production is most certainly one.

"We are calling for a £13 billion fund to be made available to provide interim relief for producers and to cover employment costs during the crisis period.

"We need a strategic support package from Government, similar to the support provided by the German, French and Swedish governments to their manufacturing sector, We can't afford to let a short term problem deprive Britain of the skills we will depend on to compete in the world economy in the long term."