Invest or industry will die out, BCC warns Brown

The British Chamber of Commerce has called on the Chancellor to boost investment in Britain's struggling manufacturing sector or risk seeing it die out altogether.

In its submission to the Government ahead of the pre-Budget report on 27 November, the BCC also points to mediocre economic prospects for the UK and the likelihood that the Chancellor's predictions for UK public finances in his last budget were over-optimistic.

The BCC warns: "Despite a number of initiatives, business sees little improvement in manufacturing productivity in this country and the Government needs to be proactive and invest in remedying this, or British manufacturing will die out."

The pre-Budget report will lay the ground for the Government's full Budget in the spring, and will include the latest economic forecasts as well as future spending plans.

The BCC expressed concern about increases in national insurance due to be introduced next year, saying it would come at a time when businesses were facing rising premiums for general insurance.

The BCC's wish list for the pre-Budget report includes an increase in the research and development tax credit to improve productivity and a plea to restore the tax concession on share dividends. This was scrapped in Gordon Brown's first Budget and has been estimated to have cost Britain's pension funds £5bn a year.