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News Release |
Date: 9 April 2002
Embargo: Immediate
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Attention: Newsdesks
Welsh Manufacturing needs Budget boost, says TUC
With tentative signs of improvement in manufacturing output revealed today, the TUC is calling for an extra £51m of funding to help position Welsh industry for the global recovery. Official figures published today show UK manufacturing output rose 0.4% during February, yet the sector lost another 15,000 jobs the previous month and the TUC expects widespread job shedding to continue for several months to come.
All the recommendations in the TUC’s Budget Submission take account of the Chancellor’s fiscal rules and the impact on monetary policy (interest rates). It calls for:
· Funding for measures to support industry in Wales in 2002 and beyond, including a significant increase in funding to the National Assembly for Wales; at a cost of £30 million;
· Full funding in Wales for the large firm research and development (R&D) tax credit at a cost of £12 million. Wales has the lowest spending on research and development per head of population than anywhere else in the UK;
· Introduction of the training tax credits to Wales, as proposed in the TUC-CBI Skills Working Group report at a cost £9 million;
· The current public spending plans to be delivered in full - in order to maximise the economic impact in 2002. Departmental under-spending must be tackled and if necessary cash reallocated;
On taxes, the Submission welcomes the Chancellor’s opening up of the public debate about tax rises to fund improvements in the public services in the medium term but argues that immediate tax rises would be misguided. Tax rises are not needed in the short term to keep the public finances on a sound footing. The cyclical weakness in some tax revenue streams will be resolved once the economy picks up speed.
Wales TUC General Secretary, David Jenkins, said:
' The Welsh economy needs at least an extra £51m so that our manufacturing sector can look to the future with confidence. Wales has the lowest spending on research and development per head of population than anywhere else in the UK. This lack of investment in innovation by companies in Wales is a significant factor leading to low pay, and is holding back our economy. Alongside the CBI, we also want to see training tax credits introduced so that the high skill economy that we all aspire to can be made reality.
' The Wales TUC wants to see a world-class economy in Wales created through effective and targeted investment to tackle the productivity gap with our European neighbours. 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, high-tech manufacturing sector that will trail blaze ‘Made in Wales’ across the globe'.
Across UK breakdown of extra industrial aid
The TUC’s Submission calls for an extra £500 million for industrial and regional aid industry and the regions.
The current distribution formula would provide an extra £125 million to be allocated to the devolved administrations in Wales (£30 million), Scotland (£65 million) and N. Ireland (£30 million).
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Notes to Editors
· The Office for National Statistics today said manufacturing output rose 0.4% on a month-on-month basis during February. For details see: www.statistics.gov.uk/press_release/CurrentReleases.asp <http://www.statistics.gov.uk/press_release/CurrentReleases.asp>
· The Submission is focused on short-term Budget measures. The TUC is also making a parallel Submission to the Third Spending Review that will set out spending plans to 2005-2006.
· The manufacturing sector lost 150,000 jobs last year.
Contacts:
· Wales Media enquiries & bids for interviews on Budget day : Darron Dupre - 029 2034 7014 or email: ddupre@tuc.org.uk
· Other enquiries: Ian Brinkley 020 7467 1202 or email: ibrinkley@tuc.org.uk
Press release (700 words) issued 9 Apr 2002
