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TUC calls for £900m boost to industry


18/ 2/2002

The TUC today called on Gordon Brown to provide a £900m package of measures in April's Budget to halt the loss of jobs caused by the worst crisis in manufacturing for more than a decade.

In its Budget submission, the TUC said the chancellor should make industry his priority, with targeted steps to help firms through temporary difficulties and strengthen regional and local economies.

John Monks, the TUC's general secretary, said: "These recommendations look to the future. We want to see a world-class British industry created through effective and targeted investment to tackle our productivity gap.

"Old style subsidies and setting an objective of simply treading water will result in us slipping further behind. We need 'smart support' to give us a high-wage, hi-tech manufacturing sector that will trail blaze 'made in Britain' across the globe."

The TUC said that it wanted £540m spent on a boost for industry and the regions - £40m to be spent on the Sure Start employment programme in areas where the jobless total remains high, and the remaining £500m to be spent through the regional development agencies.

It said there was a case for short-term help to "prevent excessive loss of industrial capacity and the break-up of skilled workforces in the face of the slump in world trade".

Government figures show that over the past year, almost 150,000 jobs have been shed from UK manufacturing as output has been cut sharply. Investment in the third quarter of 2001 was down 13% on a year earlier.

The TUC also urged spending £200m on full funding for the large-firm research and development tax credit and £150m for the introduction of the training tax credits proposed in the TUC-CBI skills working group.

While welcoming public debate on whether higher taxes would be needed to fund increased spending on the NHS, the TUC opposed immediate tax increases as "misguided".

It said rises in taxes were not needed in the short term to keep the public finances on a sound footing, adding that the cyclical weakness in some tax revenue streams would be resolved once the economy picked up speed.

"The chancellor's fiscal rules will be met and the current public spending plans can be sustained in full in 2002-03 and 2003-04. Indeed, we believe there is scope for a modest increase in spending in 2002", the TUC said. It called on ministers to restore the link between the basic state pension and average earnings from 2003.

Mr Monks said: "Effective support for industry can no longer be managed from Whitehall. Regional development agencies and devolved institutions must be the strategic leaders in our future economic development. We need a bottom-up approach that provides substantial and flexible resources to regional and local initiatives.

"To maintain improvement in our public services we need not only long-term commitments to extra investment but the rolling over of under-spending in departmental budgets. When the chancellor announces spending plans for public services, these figures should be the same figures that are actually invested."

Guardian Unlimited © Guardian Newspapers Limited 2001


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