Godfrey Davis: A little help can yield a big return

Mulberry is an English luxury fashion brand, anchored by the quality and craftsmanship of our products and our heritage. We are truly passionate about being an English brand and our UK manufacturing is extremely important to us.

Last year we completed the extension of our Somerset factory, allowing us to increase UK capacity by 30 per cent and create 60 jobs. We are also opening a second factory in Bridgwater, Somerset. This project will create 300 jobs and more than double our UK capacity. Our investment in the new factory will be about £7.5m, with £2.5m coming from the Regional Growth Fund to support the training of new employees.

We are extremely grateful for this government support. Without this funding, our project would not have been financially feasible because as a listed company, we have an obligation to our shareholders to run the business on commercial principles. With no subsidy, it would have been impossible to justify the necessary investment in the UK when manufacturing costs abroad are lower.

We believe the Government should continue to invest in UK manufacturing. It does, however, have to be a smart investment that meets two criteria. First, it must generate new jobs and exports, so as to be socially and financially beneficial. Second, it must deliver payback to the Government (ie the taxpayer) in quick time because funds are in short supply.

In our case the Government can expect to recover all of its investment during the first year of operation, with increasing payback every year thereafter in the form of additional income tax, national insurance, corporation tax, savings on jobseeker's allowance and more investment by businesses in industrial skills and training.

Just as important as the revenue to the Exchequer are the social benefits to the local community and the preservation of the UK's vulnerable manufacturing base. We have seen too many instances of companies retaining design in Britain but moving production abroad – the Government must not miss the moment to safeguard "Made in Britain" as a contemporary reality and not just a historical memory.

Our second factory, which will make our iconic bags such as the Bayswater, will recruit extensively from the local area. We expect to start recruiting in May next year, with completion of the building expected the following month.

We are passionate about supporting the local community , a town with high unemployment, and will be working closely with Bridgwater College to identify suitable workers and organise pre-employment training. We already have a successful apprenticeship scheme in place and the new factory will double the size of that programme.

The risk for the Government in this type of investment is low and we would encourage further support to companies that both design and manufacture in the UK.

Godfrey Davis is the chairman of Mulberry