HOWZAT

“We will pursue a new, more active industrial policy to drive growth and create the high-value jobs of the future,” said Lord Mandelson, the business secretary, who recently praised France’s industrial strategy. “We will invest to ensure that Britain can lead in the new industries of the global economy, ensuring broadband access for all by 2012 and working towards a nationwide high-speed broadband network by 2016,” he said.

“We will ensure that Britain’s economy is underpinned by a world-class modern infrastructure and that we have world-leading capabilities in the “network” industries of the future — low carbon, biotechnology, life sciences, digital, advanced manufacturing and financial services.” Mandelson’s officials insist these are not merely warm words and that the government is serious about rebalancing the economy.

The federation says the need to revive manufacturing is urgent, given Britain’s £92 billion trade deficit last year and the prospect of a smaller contribution to both growth and government revenues from financial services.

Its manifesto is directed not only at manufacturers themselves, who it says need to be more ambitious and raise their game, but also policymakers.

Apart from creating a climate for innovation and enterprise, it had some specific demands for government, including establishing an “industrial bank” tasked with investing in the future, a £1 billion innovation “prize” for the commercialisation of low carbon technologies, more strategic use of procurement in new and emerging industries, and progress on improving the business environment, specifically the tax system, regulatory burden and skills infrastructure.

The federation, as it concedes, is following a well-worn path in calling for a revival of manufacturing’s importance in the economy. Its new document is prefaced with an introduction from an earlier one, published in 2001, warning that Britain’s relative manufacturing decline could not be allowed to continue.

Yet it has. Official figures published last week show that the sector’s weight in the economy has slumped to just 13.3%, a modern-era low. Experts can think of no example in an advanced economy where the share of manufacturing has reversed its long-term decline.

UK manfacturing has changed beyond recognition in recent years but its overall performance has been weak, and in common with other countries it has been hit hard by the global recession.

Although output has shown recent signs of stabilising, it is currently no higher than it was at the end of the recession of the early 1990s.

Even before the downturn, its overall growth rate was a fraction of the rest of the economy; output in 2007 was just 4% higher than in 1997, a 10-year period in which a million manufacturing jobs were lost.

Even so, some of Britain’s top industrialists are cautiously optimistic.

“There are some things we are very good at — aerospace, defence, pharmaceuticals,” said Sir Kevin Smith, chief executive of the engineering group GKN. “There continues to be signficant potential to develop this part of the industrial base.

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