Manufacturers can give region a new image

The Master Cutler said Hallamshire, with its concentration of manufacturing companies, should attract future investment because "it can make the money go further, make it work more efficiently and grow quicker".

James Newman was speaking on behalf of the Senior Warden of the Company of Cutlers, Bill Spiers, who was due to deliver a speech but was unable to attend the 374th feast through ill health.

Quoting Mr Spiers, Mr Newman criticised the previous Labour government and financial system for creating the "shambolic economic situation we now find ourselves in".

He called on Nick Clegg, the new deputy prime minister and Sheffield Hallam MP, to exploit his connections and understanding of manufacturing to help South Yorkshire.

Manufacturers would benefit from tax breaks for capital investment, a cutting of employment costs, a reduction in red tape and the provision of business support on a local rather than national level, he said.

Mr Newman argued that South Yorkshire's former Objective One status created a perception in the outside world "that this was a poor region, with employment difficulties, lost skills and a disjointed political leadership relying on grants to survive".

But well-publicised advances in the nuclear sector and the success of smaller advanced manufacturing companies here and overseas could help position the region as a contender for future investment from the government, Europe and the private sector, he added.

Mr Newman said: "This region, with its new-found optimism and public-private sector cooperation and common goals, can be one of those which can benefit from this changing world but it needs to change its image from one of reliance on handouts to one of growth, success and prosperity."

Guest speaker, Gavyn Davies, the former chairman of the BBC and an economic adviser to past governments, told guests that the new Conservative-Liberal Democrat coalition is "quite likely" to survive the full term, due to David Cameron's success in wooing the Lib-Dems, which could provide the stability that sustained economic recovery so depends on.

Mr Davies, now chairman of Fulcrum Asset Management, said deflation – falling prices – seems to be a greater threat than inflation, at least in the next couple of years.

He said the UK is not facing an imminent threat of a double-dip recession, with the economy recovering much faster than most people realise with official GDP statistics masking the more accurate picture found in business survey data which shows growth of 3-4 per cent per annum.

Some of this growth is due to postponed expenditure following the downturn, "but there are also signs of a more durable recovery in exports, consumer spending and capi- tal investment", added Mr Davies.

But he warned that the recovery so far has been based "to a worryingly large extent" on increased public sector indebtedness through government spending and quantitative easing.

"We do not yet know whether the government and the Bank of England will be able to repair their financial positions without pushing the economy back into recession," said Mr Davies.

The forthcoming spending cuts will be unprecedented for a British government and may well hinder growth, but restored confidence and private sector spending could offset the withdrawal of public funds, he said, drawing comparisons with similar – but less serious – situations in the early 80s and mid 90s.

A changing landscape

A decade ago, British manufacturing was being stuffed by a strong pound, indifference at the Bank of England and the rise of financial services, said Gavyn Davies at last night's Cutlers' Feast.

The good news for the Company of Cutlers in Hallamshire, he added, is that all of this has now changed.

Mr Davies said: "With the banking sector contracting, public spending being sharply cut, and tax rises hitting consumers, Britain will have no choice but to export its way out of trouble.

"It cannot do this without the success, profitability and expansion of the industries represented in this room."