Shadow Chancellor Ed Balls this afternoon called for immediate government action over the UK’s beleaguered manufacturing sector – based on Swindon’s success in developing as a modern industrial centre.
Speaking during a visit to the town, Mr Balls said Chancellor George Osborne had to act now to avoid manufacturing sliding further into recession.
He proposed a rescue plan for manufacturing based on backing research and development, encouraging more businesses to take on apprenticeships, an economic stimulus triggered by a reduction in VAT rate back to 17.5% in the Chancellor’s Autumn Statement next Tuesday and investment in universities.
He also called for a strong government commitment to push European leaders for a solution to the Eurozone crisis.
“Swindon has bucked the trend in terms of manufacturing over the past 15 years,” he said. “No town or city can escape the difficulties in the global economy and the problems in the Eurozone are clearly having an impact.
“But the Chancellor’s drastic deficit reduction programme is simply not working – and it’s damaging our manufacturing industry.
“David Cameron says you can’t borrow your way out of a recession but that is exactly what the Chancellor is having to do.
“I think sometimes people talk about manufacturing in the wrong way. There are some real manufacturing success stories here in Swindon but they are struggling. The government really should be doing more.”
A classic example was the way the South West Regional Development Agency (RDA) had worked with Honda to help it strengthen its supply chain, he said. Yet the government had abolished the RDA, he said.
Mr Balls spoke to Swindon Business News after visiting building society Nationwide’s Swindon head office to meet members of its graduate scheme and endorse its new employability programme which is helping young people bridge the gap between education and employment.
He said much more could be done to ease youth unemployment, which has risen 92% in Swindon since January, and called for a repeat of last year’s bankers’ bonus tax which brought in £3.5bn. This could then be ring-fenced to spend on creating 100,000 jobs for the young unemployment.
Mr Balls call for action on manufacturing came as the CBI reported a weakening demand and an expected fall in export orders.
