As Britain's manufacturing sector finally slid into recession, the government agreed to meet plastics and rubber industry representatives who have expressed growing alarm at the industry's mounting plant closures and job losses.
Patricia Hewitt, the government's new trade and industry secretary, has agreed to a meeting between the groups and her junior minister, Lord David Sainsbury.
The alliance of industry organizations, led by the British Plastics Federation, points to a string of layoffs and plant closures, including the announced shutdown of two plants by Valeo SA and another car-parts firm, McKechnie Vehicle Components. Both blamed the strength of the pound sterling.
The alliance, which represents processors, toolmakers and machinery suppliers, complained about a drift of customers away from Britain to the lower-cost economies of Asia and Eastern Europe.
The associations propose a seven-point plan designed to ``arrest further deterioration in competitiveness and profitability.'' Demands included withdrawal of the contentious Climate Change Levy energy tax, which they claim adds £60 million ($85 million) to processors' costs for electricity alone; an investigation into high gas prices; and a government investment program to reverse the drift of foreign firms leaving Britain.
The plastics and rubber industries generate annual sales of about £20 billion ($28 billion), exports of £5 billion ($7 billion), and employs 300,000, according to the alliance.
In addition to BPF, participants in the group include the Packaging and Industrial Films Association, the Flexible Packaging Association, the Gauge & Toolmakers Association and the Polymer Machinery Manufacturers and Distributors Association.
Hewitt said the government is proposing a tax credit to boost research and development. She conceded that the Climate Change Levy has raised concern in several sectors including plastics but noted that other European nations also are using energy or carbon taxes.
The associations welcome the proposed meeting with Lord Sainsbury.
``We want to work with government to help it really understand what is happening in this sector,'' said an alliance spokesman.
Plastics industry leaders remain concerned about the worsening business situation and feel government is not doing all it can to assist companies involved.