Unite demands support for manufacturing in Darling's Budget

20 April 2009

Business

Unite has called on the chancellor to put manufacturing "at the heart of the Budget" when he unveils his plans for the rescue of the UK economy on Wednesday.

The union's calls come ahead of this week's Budget, which is widely seen as one of the most challenging and eagerly anticipated in recent history.

According to Unite, despite the perilous state of government borrowing, the government must not "shy away from continuing to invest in the future through effective economic stimulus packages".

"It would be a catastrophic mistake to reign in investment," the union said.

Joint general secretary Derek Simpson added: "Unions and employers are united in calling for Wednesday's Budget to contain measures to support manufacturing jobs through this recession.

"If these jobs go, they will not come back; supporting these workers is investing in Britain's future."

Specifically Unite is calling for "speedier access to credit from the banks to ensure immediate support for manufacturing business" and government support to manufacturing businesses "in keeping with the levels of assistance provided… by our overseas competitors".

However, as government borrowing has ballooned following the bank bailouts and VAT tax cut, Darling may have little option but to reign in spending and is widely anticipated not to announce any further major fiscal stimuli, potentially putting the government on a collision course with its biggest donor, Unite.

In the pre-Budget report, Darling predicted government borrowing would rise to £118bn next year. This is now expected to be nearer £150bn, with many analysts predicting a rise to £200bn over the next three years.

All eyes will be on the chancellor's predictions for the UK economy, following his wildly optimistic predictions in November that the economy would contract for only the first two quarters of 2009.

He said GDP contraction was predicted to fall by 0.75% and 1.25% in the first two quarters of 2009, before returning to growth.

In fact, economists believe the economy will contract by up to 4% this year – the deepest annual fall since the Second World War – with growth only returning in spring 2010.

Printweek.com will be updating readers live as the Budget unfolds with a panel of experts analysing what the announcements mean for printing businesses. Live updates will start at 12:15pm.