Major Wales-based firms, including Corus and Corning Optical, announced large scale redundancies last year and the TUC wants fresh investment to revitalise the economy.

David Jenkins: 'Extra investment vital'

Wales TUC general secretary David Jenkins said the underlying economy in Britain was strong, but manufacturing firms needed support.

Mr Jenkins said the extra money proposed for Wales would see �30m going directly to the assembly, which should be targeted at the Welsh Development Agency and education learning organisation ELWa.

Low pay levels and poor investment were holding Wales back, said Mr Jenkins.

"We need to invest more in research and development, where we are woefully underspending, and invest more in training.

"We have moved into low-tech manufacturing, where we are vulnerable to world competitors. We now have to be smart to be competitive."

We need 'smart-support' to give us a high-wage, high-tech manufacturing sector

David Jenkins, Wales TUC general secretary

The forward-thinking TUC document recommends effective and targeted investment.

The report calls for funding to support industry in Wales in 2002 and beyond.

The TUC is also seeking full funding in Wales for large firm research and development (R&D) tax credit at a cost of �12m.

The budget submission highlights that Wales has the lowest spending on research and development per head of population in the UK.

Mr Jenkins has backed the report's call for training tax credits in Wales, at a cost of �9m.

The proposal has previously been highlighted in the TUC-CBI Skills Working Group report.

American-owned Corning Optical suffered job losses

The TUC is also concerned that departmental budget underspends should be addressed and cash reallocated if necessary.

Mr Jenkins added: "The Welsh economy needs at least an extra �51m so that our manufacturing sector can look to the future with confidence.

"The Wales TUC wants to see a world-class economy in Wales created through effective and targeted investment to tackle the productivity gap with our European neighbours.

"We need 'smart-support' to give us a high-wage, high-tech manufacturing sector."