Manufacturers issue government with help plan

The manufacturers’ organisation EEF made the call following last week's unprecedentedly poor industrial production figures and what it said was the need to protect key sectors and their supply chains. The organisation’s latest annual manufacturing report shows that despite the significant improvement in the sector’s productivity performance in recent years, where it has outperformed the rest of the economy by more than two and a half times since 2003, manufacturing will contract by over 5% in 2009 and is unlikely to grow again until the second half of 2010. In addition, EEF is urging government action to address the problems in key industrial sectors on the back of its figures predicting a further 10% decline in the automotive sector’s output this year. EEF chief economist Steve Radley, said: “This year was already going to be challenging for manufacturing but, the combination of the global downturn and continued schlerosis in the financial markets means the downturn will now be longer and deeper than expected. Whilst reductions in interest rates will kick in at some point we cannot afford to wait. The unprecedented speed of the downturn since last autumn is hampering companies’ ability to adjust and government must put measures in place as a matter of urgency." EEF told the government it must take decisive action to restore access to credit via a comprehensive national guarantee scheme, increase the supply of money, introduce more flexible and generous short-time working allowances and a renewed focus on adult apprenticeships, restore empty property relief and freeze business rates for 12 months, raise the Annual Investment Allowance to £250,000, and put a stop on unnecessary new regulation.