Britain needs to recognise that manufacturing is the glue which holds the economy together, a Midlands Labour MP has warned.

Richard Burden, chairman of the House of Commons West Midlands Select Committee, said it was time to learn the lessons from the recession and admitted that the Government had on occasion been too slow to act.

Speaking to Business Voice WM at an event supported by Birmingham Business School and Forrest Research, Mr Burden, who represents Birmingham Northfield, said: "If ever we needed confirming the importance of manufacturing, the experience of the last year shows that it is part of the glue that holds our economy together.

"Business decisions and Government decisions need alignment. The speed of Government schemes to help businesses were, at times, too slow and business does not work like that. Government, like business, must also understand the process of risk.

"We need to rethink the long term relationship between industry and finance. We need to look at Germany at the links there between finance and its manufacturing base.

"But in the short term there are lessons from this downturn compared to the downturns in the 80s and 90s.

"It has highlighted the need for active intervention. Keeping people in work is really important and it was not always seen that way in previous downturns. The use of things like Train to Gain - one of the best programmes in the country - so you still invest in people during the downturn is also vital. Too many people have low skills. We are getting better in addressing this but we must do more."

Mr Burden said he was cautiously optimistic about the state of the economy.

"We need to keep our feet on the ground but there are some positive signs. Unemployment has gone down - the West Midlands no longer have the worst unemployment rate in England. The Purchasing Managers Index shows new orders are up.

"Over the last few months, there has been action to stimulate construction while the vehicle scrappage scheme has cushioned the impact of the serious downturn on the automotive sector.

"The prospects for the shape of recovery will have an international dimension as the US, China and India will be a key determinate to what happens here in the UK. I do worry about Conservative demands for quicker and deeper cuts as this seems to be very dangerous indeed for continuing the economic recovery. It is often the same Conservatives calling for cuts who are also calling for new investment."

Turning to the purchase of Cadbury by Kraft, Mr Burden said it showed we needed to re-think takeover legislation in the UK. This, he suggested, could involve the introduction of a "minimum time an entity or person has been a shareholder when takeovers are being considered".

Paul Forrest, of Aldridge-based Forrest Research, was critical of the regulators' role in the lead-up to the economic crisis. "Central banks should have noticed that the UK balance sheet had tripled since 1997."

Business Voice WM Executive Director, James Watkins, told the breakfast event: "We have been successful in getting action to help the construction sector. In December, Minister for the West Midlands, Ian Austin, launched our construction action plan that includes financial help so that building sites are not necessarily mothballed.

"We are now set to launch an action plan with regional development agency Advantage West Midlands that will help clothing and textiles - a sector that employs up to 20,000 people in the region."