Judging by Lord Mandelson’s comments accompanying the announcement of the government’s £150m package for manufacturing assistance, the answer is an unequivocal “yes”.

He said, “We, like other governments, had taken for granted that our wealth would continue to be generated from the size of the financial sector and that this would be replicated in the coming decades – but it won’t”

His comments would appear to be supported by the latest results from city firms which contributed £32.5bn in tax in the year to 31st March 2009 compared to £67.8bn in the previous year. In addition the City employed 29,000 fewer people than the previous year. The financial services sector is likely to be hidebound by increasing regulation that will stiffle the innovation (and income) that it has demonstrated over the past ten years.

Yesterday’s announcement of a support package for UK manufacturing included £45m to guarantee four new Rolls Royce factories matched by £45m from the Strategic Investment Fund and £40m from the Technology Strategy Board which might seem like extraordinary largesse but Rolls Royce currently has a £55bn order book.

Lord Mandelson also announced £4m to expand the Manufacturing Advisory Service (MAS) and £500,000 for a Centre of Excellence for Silicon Design in the south west.

See earlier story on the changing nature of the UK economy.