CHANCELLOR Gordon Brown is being urged to arrest the decline in manufacturing investment when he delivers his budget next month.

The Engineering Employers' Federation (EEF) made the plea after releasing figures showing a dramatic fall in manufacturing investment.

According to thsoe figures, last year saw one of the sharpest falls in manufacturing investment since records began -- worse than during the deep recessions of the early 1970s and 1990s.

It has joined forces with 23 manufacturing bodies to submit to the Chancellor a list of recommendations which it believes will help the industry.

The EEF's survey suggests that business investment is unlikely to grow this year by anything close to the Government's projection of three per cent.

And it estimates that in the first three-quarters of last year, manufacturing investment fell by close to 15 per cent against the same period a year before.

Andrew Semple, external affairs manager with EEF North West, said: "While North-west manufacturers are pulling out all the stops to be ready for economic upturn, the increasing costs of tax and regulation, along with growing uncertainty, are constraining vital investment decisions.

"In these circumstances, the Chancellor must not add to manufacturers' costs.

"He must also introduce measures to build confidence and support investment decisions vital to our future growth."

The EEF's submission, 'Turning the tide: reducing costs, raising investment' is available from www.eef.org.uk

Pay settlements in the engineering and manufacturing sector fell to 2.4 per cent in January from 2.5 per cent in December.

The federation's shopping list

THE EEF's submission, made in conjunction with 23 manufacturing trade bodies, has called on the Government to:

Introduce capital allowances of 100 per cent for small manufacturing employers now and 35 per cent for larger firms over the medium term -- and extend capital allowances to leased assets.

Improve access to negotiated agreements, whereby companies obtain discounts on the Climate Change Levy (CCL) in return for meeting energy efficiency improvement targets.

Accompany the proposed landfill tax with a plan to increase participation in recycling schemes.

Ensure any increase does not hit the industry excessively.

Pursue the inquiry into Employers Liability Insurance, which should eventually be reformed.

As part of its brief to develop an educated and skilled workforce, the EEF also wants the Government to increase modern apprenticeship funding to meet a current shortfall.