Letter: Restored faith in manufacturing

Sir: We applaud John Major's endorsement of the view that an efficient manufacturing sector of sufficient scale holds the key to the long-term prosperity of the nation ('Major sets out his revolutionary credentials', 4 March).

This view, long held in Cambridge, has until now been largely rejected in government circles. In his interview, Mr Major argues that a fundamental change in attitude is required to rebuild our manufacturing base. Recognising the problem is, however, only half the battle. To restore our manufacturing base will take decades. It will take more than his proposed revamping of the export credit guarantee scheme and boost to education and training. Above all, it will require the maintenance of a competitive exchange rate and the provision of fiscal incentives to encourage investment in manufacturing and its supporting infrastructure.

One test of Mr Major's commitment to manufacturing will be his willingness to hold down the real exchange rate to the more competitive level to which it was unceremoniously driven on Black Wednesday.

Another will be his willingness to implement the kind of interventionist package promoted so vigorously by Michael Heseltine from outside the same Cabinet in which Mr Major, we now learn, was a minority supporter of manufacturing.

Yours faithfully,

ALAN HUGHES

BOB ROWTHORN

Faculty of Economics and

Politics

University of Cambridge

Cambridge

5 March