Lessons must be learned from recession – MP

GOVERNMENT schemes to support businesses were too slow to be implemented and put firms at risk during recession, a Labour MP has said.

Birmingham Northfield MP Richard Burden said lessons had to be learned and the long-term relationships between Whitehall and the business community rethought.

One strategy could be to look at Germany and adopt the model there, said Mr Burden, who is also chairman of the House of Commons West Midlands Select Committee.

Mr Burden, speaking to Business Voice West Midlands at an event supported by Birmingham Business School and Forrest Research, said Britain needed to recognise that manufacturing was the glue that held the economy together.

“If ever we needed confirming the importance of manufacturing, the experience of the last year shows that it is part of the glue that holds our economy together,” said Mr Burden.

“Business decisions and Government decisions need alignment. The speed of Government schemes to help businesses were, at times, too slow and business does not work like that. Government, like business, must also understand the process of risk.

“We need to rethink the long term relationship between industry and finance. We need to look at Germany at the links there between finance and its manufacturing base.”

Looking at recession, he said the need for active intervention was clear.

“Keeping people in work is really important and it was not always seen that way in previous downturns. The use of things like Train to Gain – one of the best programmes in the country – so you still invest in people during the downturn is also vital.

“Too many people have low skills. We are getting better in addressing this but we must do more,” said the MP.

Despite the fragile circumstances surround manufacturing, Mr Burden said he was cautiously optimistic about the state of the economy.

“We need to keep our feet on the ground but there are some positive signs. Unemployment has gone down – the West Midlands no longer have the worst unemployment rate in England. The Purchasing Managers Index shows new orders are up.

“Over the last few months, there has been action to stimulate construction while the vehicle scrappage scheme has cushioned the impact of the serious downturn on the automotive sector,” he said.

What should not be forgotten, he added, was that the shape of recovery would have an international dimension and what happened in the United States, China and India would all have a bearing on the situation in the UK.

“I do worry about Conservative demands for quicker and deeper cuts as this seems to be very dangerous indeed for continuing the economic recovery. It is often the same Conservatives calling for cuts who are also calling for new investment,” he added.