Thousands of jobs could be created at MG’s plant in Birmingham – but only if the Government backs industry, shadow Chancellor Ed Balls tells Local Government Correspondent Neil Elkes

Chinese premier Wen Jiabao focused the eyes of the world on the MG car plant at Longbridge during his high-profile visit last week, bringing with him hopes of billions of pounds of new trade and investment between China and the UK.

A few days before his public tour, shadow Chancellor Ed Balls had also been visiting the factory to admire the production of the new MG6 model.

Coming as £1 billion of new trade and investment between the two countries has been announced, it might seem difficult for Mr Balls to argue that the coalition Government is treading a risky path with the British economy.

But he argues that the fact car production is still taking place at Longbridge at all is testament to the former Labour government’s support for manufacturing.

Back in 2005, as a close advisor to then-Chancellor Gordon Brown, Mr Balls was closely involved in the Government’s reaction to the collapse of MG Rover and the creation of the Rover Task Force.

At the centre of that response – and crucial, he says, to the business being taken on by Shanghai Automotive – was the regional development agency Advantage West Midlands.

But the Government’s decision to wind up AWM as part of its “localism” agenda could make future MG-style rescues impossible, Mr Balls claims.

He said: “A few years ago, with the Rover Task Force and AWM, we had here in the region a business-led presence to make sure the brokerage between local government, national government and big investment happened.

“It went beyond the allocation of money. It had a business-led team to reach out to those big investors and say, ‘what do you need?’

“The absence of the agency is a big a gap. It’s very important the Government does its bit to win these jobs for the West Midlands.”

The Chinese came to Birmingham only after talking to AWM and local industry, he said.

But Mr Balls believes that this is an optimistic time for car production in the West Midlands.

The Chinese managing director at Longbridge had told him that there was “a real chance of substantial capital investment and substantial expansion of production of the MG6,” said Mr Balls.