EEF, the manufacturers’ organisation, has published a six-point plan of direct government action, which will safeguard jobs and help to kick-start the economy, ahead of a jobs summit which Gordon Brown will hold in London today.
The organisation warned that manufacturing will contract by five per cent in 2009 and will not begin to grow again until the second half of next year.
Its proposals are:
• A comprehensive national loan guarantee scheme for bank lending to businesses;
• To minimise impact when credit insurance is withdrawn or reduced;
• Quantitative easing from the Bank of England to ensure long-term growth;
• The enabling of generous short-time working allowances and the provision of adult apprenticeships;
• Tax relief through cutting empty property rates and raising the annual investment allowance to £250,000; and
• The restriction of new regulation that obstructs businesses’ ability to proactively manage its way through the downturn.
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 sclerosis in the financial markets means the downturn will now be longer and deeper than expected.
“While 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.”
The release comes before a meeting planned for today where Gordon Brown will sit down with union officials and business leaders to discuss measures to help Britain through the current economic crisis.
One measure that has being considered is the provision of £2,500 to businesses for every person they take on that has been out of employment for more than six months.
The Federation of Small Businesses has released its own five point-plan which it says enable the creation of up to 400,000 extra jobs.
It says the government must cut payroll taxes; simplify access to public procurement contracts; declare a moratorium on business regulation; promote part-time work through tax exemptions; and simplify and promote apprenticeships.
When Brown opens the job summit at the Science Museum, London, later today, he is expected to tout advanced manufacturing and environmental technology as well as healthcare and education as potential growth areas in which to create more jobs.