Memorandum submitted by the Trades Union
Congress (TUC)
INTRODUCTION
1.1 The TUC is the voice of
Britain at work. Representing nearly 6.5 million workers in 59
unions, we are proud that one worker in every four belongs to
a TUC affiliated union. Globally, we are part of a trade union
family with 156 million members in 148 countries.
1.2 The TUC welcomes this timely inquiry
into "Creating a Higher Value-Added Economy". This inquiry
follows an earlier study, carried out by the Trade and Industry
Select Committee, into skills, public procurement and the marketing
of UK plc, with specific regard to manufacturing. The TUC made
a written submission to that inquiry and gave oral evidence in
December 2006.
GLOBALISATION AND
THE CASE
FOR HIGH
VALUE
2.1 A consensus appears to
have emerged that the only way for the UK to remain competitive
in the era of globalisation is to focus on high value, high skill
production.
2.2 Speaking to last year's annual CBI
dinner, in one of his last major speeches as Chancellor of the
Exchequer, Gordon Brown told his audience:
"Above all, we all recognise that in a world
in which we will be competing based on our talent and ideas, the
source of our strength is our creativity and innovation—which
is why we are investing twice as much in science than in 1997
and guaranteeing a 10 year science budget—and in people
and their skills. More than ever before it is your employees who
will be the creators of your intellectual capital, productivity
and competitiveness. And we have to invest in that, equipping
them so that if they have to move from their last job we can help
them get their next job".[198]
2.3 "The Race to the
Top: A Review of Government's Science and Innovation Policies",
prepared by the former Science Minister Lord Sainsbury and published
in October 2007, puts it succinctly:
"In today's global economy, investment in
science and innovation is not an intellectual luxury for a developed
country, but an economic and social necessity, and a key part
of any strategy for economic success".[199]
The Asian Challenge
2.4 It does not require a
very detailed look at world trends to understand why this step
change in investment is required. Sainsbury reports that the balance
of global economic activity is shifting from Europe and the USA
to Asia. Asia may account for over half of global growth over
the next 15 years, by which time China and India are individually
forecast to be bigger than the UK, French and German economies
combined (in purchasing power parity terms). New markets will
add approximately one billion consumers to the world market and
China and India's combined share of global expenditure is expected
to double over the next 15 years.
2.5 Asia's not-so-secret weapon is an
abundance of low cost labour. Some countries can have wage costs
that are 5% of those in the UK. It follows that industries with
a large percentage of costs that are made up of the price of labour
will be tempted to migrate to countries with low labour costs.
Textiles are an obvious example. The UK had a dominant role in
the clothing and textile industries in the early 19th century,
but has suffered a steady decline. Meanwhile, in the past five
to 10 years, the textile and clothing industries have become increasingly
concentrated in China, Pakistan, India, Bangladesh, Mexico, Romania,
Cambodia and Turkey.[200]
2.6 Furthermore, the situation
in which we find ourselves is not so simple as experiencing a
trade off between low cost work, which will migrate east, and
high cost, high skill, high value work, which will remain in the
industrialised west. Gordon Brown has often reminded us that China
and India are producing four million graduates a year. And as
Lord Sainsbury warns:
"Countries such as China and India will
not be content for long on the lower rungs of the economic ladder,
remaining forever in mass production manufacturing based on low
technology, low wages and low skills. They are determined to improve
the quality of their goods and services, increase their rates
of innovation, and move into high value-added goods and services".[201]
2.7 Remaining economically
competitive will require a considered response from UK policy
makers. As an advanced, wealthy nation, we cannot possible cut
our costs to the level of some parts of Asia, even if that were
desirable. The UK solution lies elsewhere.
2.8 Under globalisation, competition
is tough and is going to get tougher. But this does not mean that
all is lost. In the TUC's view, the UK must identify its area
of focus. The questions to be asked are: What are we good at?
Where are we competitive? Where can we remain/become competitive?
What support must government give? What challenges must employers
rise to? What role is to be played by modern trade unions?
2.9 To begin to answer those
questions, we can be sure of one thing: the UK will only remain
competitive in areas of high value. So how do we define high value?
WHAT IS
MEANT BY
HIGH VALUE
ADDED?
3.1 To give a technical answer,
"value added" is the difference between the costs of
inputs purchased and the value of the output produced. For example,
if a person was to buy a wooden table, that person is buying the
wood from which the table is made, but more importantly he or
she is paying for the skill of the craftsman that made the table.
The better the wood, the more expensive the table. Yet the skill
that is used to make the table is probably even more expensive.
A basic, mass produced table will be much cheaper than an individually
produced "work of art", that will take pride of place
in the purchaser's dining room. Such a work of art can only be
produced by a craftsman of talent, who undertook years of training
and, quite possibly had a designer's eye for a unique product.
Skills and design will be two important concepts in any discussion
of high value goods and services. The market, through the basic
rules of supply and demand, plays a role in setting the price,
of course, but value added refers more closely to the quality
of the product.
Manufacturing and Services
3.2 Historically, production and manufacturing
have been associated with so-called "metal bashing",
in the style of the mass-produced table in the example above.
Yet modern manufacturing is now sophisticated almost beyond recognition.
As Lord Sainsbury reminds us, early manufacturing companies were
typically vertically integrated, undertaking as many operations
as possible on their own premises. As skills, capabilities and
demand increased, subcontractors emerged who could supply parts,
sub systems or services competitively. Over the past 20 years,
competition and customer demand for greater variety have grown
while the reduction of cycle times for innovation has forced companies
to adopt new models for product service and development. So, for
example, purchasers of new cars can now choose from an array of
additional features and colours, making their individual car unique—their
own "work of art".
3.3 The value chain of manufacturing now
encompasses research and development, design, supply management,
production, routes to market and after sales service. Companies
may specialise in one, some or all of those specialisms, yet the
days of manufacturing companies simply building a product are
long gone.
3.4 This has implications
for the way in which we view the distinction between manufacturing
and services. To quote Sainsbury once more:
"Software for an aeroplane produced by an
aeroplane manufacturer is classified as manufacturing, but if
it is outsourced to a computer services company it is classified
as a service. Jet engine manufacturers such as Rolls-Royce no
longer sell engines and spare parts, but propulsion services,
because the value of services on a product through its lifespan
can exceed original sales by as much as five times".[202]
3.5 When the TUC has expressed
concern at manufacturing job losses in recent years, we have often
received the response that, quite simply, jobs that used to be
considered to be manufacturing jobs are now classified as services.
This is probably true up to a point, but the extent to which jobs
have been reclassified, as opposed to having disappeared, is unclear.
3.6 And without knowing exactly
what is going on, it is impossible to develop policy to respond
effectively.
3.7 The TUC's first recommendation,
therefore, is to re-examine the industry figures that are produced
by the Office of National Statistics. Although the way that manufacturing
and services are measured worked well in the past, the current
definitions of those sectors are no longer fit for purpose. If
we are to focus our energies on high value industry, first we
must develop a greater understanding of what is actually happening,
in manufacturing, services and at all points in between.
Comparative Advantage
3.8 If the UK is to remain
successful, it is critical that we identify and support those
areas of high value production and services where we are most
competitive or could become competitive.
3.9 The economic theory of "comparative
advantage", first developed by the 19th century economist
David Ricardo and espoused by the Treasury, is helpful here. To
quote the Treasury directly:
"Comparative advantage predicts that, when
economies have the flexibility necessary to adapt to more open
markets, labour-intensive, lower-technology production will take
place in countries with an abundance of low-cost labour, while
advanced economies, where labour costs are higher but physical
capital and expertise are more prevalent, will concentrate on
exporting more skill- and capital- intensive goods. This specialisation
by countries in the production of goods and services in which
they have a relative advantage drives trade. Specialisation resulting
from comparative advantage allows countries to use their resources
more efficiently, which in the long run benefits everyone by increasing
the global potential for growth".[203]
A modern industrial strategy
3.10 In the TUC's view, the
logical conclusion of this theory is that the UK should identify
the sectors where the UK is or could be successful and develop
an industrial policy accordingly. Yet the UK Government refuses
to do that. Its credo is one of "horizontal" support
and it refuses to distinguish between one industry and another,
with regard to those industries' strategic value to the UK.
3.11 Which sectors would be targeted by
a modern industrial strategy? A useful list of possibilities is
set out in the following paragraph, also from the Sainsbury Review:
"It is not possible to predict where the
new jobs will emerge in the future but it is possible to see many
opportunities for UK companies to create new products and services,
and new industries in areas as diverse as aerospace, pharmaceuticals,
biotechnology, regenerative medicine, telemedicine, nanotechnology,
the space industry, intelligent transport systems, new sources
of energy, creative industries, computer games, the instrumentation
sector, business and financial services, computer services and
education".[204]
3.12 Until 1979, governments
of all political colours pursued industrial strategies. Those
governments had a sense of where they could build the UK's industrial
strength and a policy designed to enhance that strength. With
the benefit of hindsight, it is possible to see that mistakes
were made, but the radical response of the Thatcher Government—the
view that only companies decide which industries exist and that
any government vision amounts to "politicians picking winners"—was
surely incorrect. Governments in competitor countries have a very
clear sense of where their industrial strength lies, but the British
Government, still bruised by the experience of British Leyland
and one or two other high profile cases, refuses to countenance
an industrial strategy. The result is that we compete with one
hand tied behind our backs.
3.13 The extract from the
Sainsbury Review quoted above is couched in the language of British
culture—"It is not possible to predict where the new
jobs will emerge in the future ..."—before going on
to present a considered list of exactly the kind of industries
where the UK should focus. The TUC welcomes this list of industries
as the basis for a new UK industrial focus.
3.14 For example, UK entrepreneurs
cannot be expected to invent technology and then, through a lack
of proper policy support, allow others to exploit it. In the 1980s,
the UK was leading the Research and Development of wind turbines,
yet the Danish and German Governments saw an opportunity to develop
markets in this area. Market-based policies to grow demand, notably
through a feed-in tariff, guaranteed an income from investment.
3.15 The report of the Commission
on Environmental Markets and Economic Performance,[205]
on which the TUC was represented, was published in November 2007.
This argues that, by making the UK one of the best locations in
the world to develop and introduce low carbon and resource efficient
products, processes, services and business models, the country
can attract the investment today that will help create tomorrow's
prosperity and jobs, as well as contributing to a cleaner environment.
Achieving this goal will require a policy framework that drives
investment and enterprise in environmental markets in the UK and
provides more effective support for the development and commercialisation
of environmental innovations.
3.16 Such a policy framework
would be central to the TUC's concept of a modern industrial strategy.
3.17 The TUC's second recommendation
is therefore that all stakeholders in industry should develop
a modern concept of industrial strategy that politicians and businesses
are comfortable with. If that is to happen, the change will be
as much about a new culture as a new policy.
The Motor Industry
3.18 The one sector that the
TUC would add to Lord Sainsbury's list of strategic, high value
sectors is the motor industry. According to a report produced
by the European Economic and Social Committee,[206]
the European automotive industry is one of the EU's most important
economic sectors, producing 18.6 million passenger vehicles, goods
vehicles and buses, each year. 27% of worldwide motor vehicle
manufacturing takes place in the EU. More than 12 million families
rely on motor vehicle-related employment, with 2.3 million direct
jobs and a further 10 million in ancillary sectors. Eleven major
international manufacturers have their head offices in Europe
(BMW, DAF, Daimler, Fiat, MAN-Nutzfahrzeuge, Porsche, PSA Peugeot
Citroen, Renault, Scania, VW and Volvo), as do the European subsidiaries
of General Motors and Ford (General Motors Europe and Ford of
Europe).
3.19 The automotive industry is one of
the EU's leading export sectors, with net exports of Eur 41.6
billion. The sector has a high rate of innovation, with annual
expenditure of Eur 20 billion on Research and Development, or
4% of its turnover.
3.20 The EU share of global
automotive production amounts to 27%. Within the EU, Germany is
by far the biggest producer of motor vehicles. The German share
of EU motor vehicle production—as measured by units produced—has
remained at the level of 32% since 1990.
3.21 However, between 1990
and 2006, there were major changes in French, Italian, British
and Spanish motor vehicle production. The French, Italian and
British share of European production fell sharply while the Spanish
share saw a large rise. Within the UK, a major internal change
took place: the production of domestic motor vehicle manufacturers
continued to fall, while production of foreign—in particular
Japanese—transplants rose sharply. At the same time, a number
of British motor manufacturers lost their independence (Rover,
Mini, Rolls Royce, Bentley, Jaguar).
3.22 Apart from Germany, of
the "old" EU Member States, only Belgium and Austria
achieved production increases. In all other Western Member States,
production of passenger vehicles has fallen since the early 1990s,
while the new Member States have achieved uninterrupted production
increases. Nevertheless, in 2006 aggregate manufacture of passenger
vehicles in Central and Eastern European countries was only just
over 14% of total EU production, with over 85% still taking place
in the "old" Member States.
3.23 The TUC has one comment
and one recommendation to the Committee, in relation to the automotive
industry. The comment is that the incredible success of the new
Mini, built at Cowley, demonstrates, once again, the value of
design. According to media reports on 30 November 2007, the Mini
is so successful that it is to be built outside the UK for the
first time in 2008 or 2009, because production at Cowley will
be at maximum capacity.[207]
3.24 The recommendation is
that the Committee takes evidence from Nissan UK. The UK's Nissan
plant, situated in Washington, Tyne and Wear, has long held the
reputation of being the most productive car plant in the whole
of Europe. We congratulate Nissan on its success, but this does
beg the question: if Nissan can do it, why cannot others also
do it? Evidence from Nissan on the factors which contribute to
its success and the lessons the might be learnt for high value
production throughout the UK, would be very useful.
3.25 Another potential witness
for this inquiry is the Institute for Manufacturing at Cambridge
University, whose work on comparative industrial strategies around
the world might be of great interest.
3.26 Furthermore, it is surely
no accident that the German motor industry remains so successful,
even in the light of competition from Eastern Europe. It is the
TUC's view that Germany is successful in this and so many other
areas of high value manufacturing because its government targets
those areas and builds its industrial support system around them.
It is high time the UK Government did the same.
THE ROLE
OF GOVERNMENT
4.1 Were an industrial strategy
such as that proposed by the TUC to be adopted, one advantage
is that the focus would be on companies that already have a good
story to tell on high value. The motor industry, aerospace, pharmaceuticals,
the creative industries etc are, by definition, high-skill, high-value
industries. Their skills training records are good, as are their
records on innovation.
Skills
4.2 Nevertheless, there is no room for
complacency and the UK needs a step change in its performance
on skills if it is to be competitive in the global age. To quote
the Prime Minister once more:
"Today, there are in Britain five million
unskilled people. By 2020 we will need only just over half a million.
So we must create up to five million new skilled jobs and to fill
them we must persuade five million unskilled men and women to
gain skills, the biggest transformation in the skills of our economy
for more than a century".[208]
4.3 In October, the Government
published the results of its Comprehensive Spending Review 2007
(CSR 07). This included a Public Service Agreement that sought
to improve the skills of the population, on the way to ensuring
a world-class skills base, by 2020. As performance indicators
for the achievement of this PSA, it would seek to raise the proportion
of people of working age achieving functional literacy and numeracy,
to raise the proportion of people of working age qualified to
at least full Levels 2 and 3, to increase the proportion of apprentices
who complete the full apprentice framework, to raise the number
of working age adults qualified to Level 4 and above and to increase
the higher education participation rate.
4.4 The PSA target and indicators
largely reflect the Government's endorsement of the proposals
of the Leitch Review,[209]
which called for the doubling of current attainment at most skill
levels and the virtual eradication of low skills by 2020. The
TUC welcomed this scale of ambition and agreed with Lord Leitch's
central conclusion that the UK would need to have a world-class
skills base by 2020 in order to support further progress on productivity,
economic performance and social justice.
4.5 The Government's response[210]
endorsed the majority of Lord Leitch's recommendations and also
included a welcome change in tone—there is a greater focus
on individuals and employees than in recent policy statements.
The TUC is currently supporting the Skills Pledge proposed by
Lord Leitch, but on the basis that the Government remains clearly
committed to introducing a statutory right to workplace training
if there is not a sufficient rate of improvement in the proportion
of employees with a Level 2 qualification by 2010.
4.6 The TUC has welcomed the
focus in CSR 07 on an increased investment by Government in workplace
skills, but there is a need for employers to up their game and
significantly increase their investment if there is any prospect
of making the UK a world leader in skills in the coming years.
The TUC has also welcomed the ongoing support by the Government
for the trade union role on skills, and in particular the Prime
Minister's continued commitment to the Union Learning Fund in
his speech at the TUC's 2007 Congress.
Science and Innovation
4.7 The TUC warmly welcomes
Lord Sainsbury's report, "The Race to the Top: a review
of Government's science and innovation policies". This
report sets out the scale of the challenge before us and is clear
in its assessment of the implications for the long-term health
of the British economy if we do not meet that challenge. Its description
of an innovation ecosystem, which brings together the inter-linked
activities which, between them, contribute to a country's innovation
rate, is valuable. Across a range of areas, including a new leadership
role for the Technology Strategy Board, the value of knowledge
transfer, targeted support for early stage high technology companies
and a major campaign to enhance the teaching of science and technology,
its recommendations are important. However, such inter-linking
needs to operate vertically as well as horizontally. For example,
as Lord Sainsbury recognises, departmental science and innovation
strategies and their funding of R&D can come under pressure
if funds are needed for operational activities in times of difficulty.
Science, innovation and R&D spending must be protected.
4.8 The prominence given by Lord Sainsbury
and, for that matter, by Gordon Brown, to the value of science
is to be welcomed. At a time of tight resources, guaranteeing
a ten-year science budget is no small promise. Yet there is cause
for concern. The Sainsbury Review reports that although there
has been a steady increase in the amount of money spent by Research
Councils, government department funding of R&D by civil departments
is now lower than at the start of the decade and defence R&D
spending, as a percentage of GDP, has declined almost continuously.
This is of concern for the quality of our public policy-making,
and the stimulation of innovation in the companies with which
government departments interact. We are significantly reducing
our capacity to have a high-level scientific input made into key
policy decisions. Given the high costs and benefits that these
key policy decisions involve, this could turn out to be a very
serious economic mistake.
4.9 The fourth recommendation
of this paper is to call for a national campaign to promote the
value of science. Economists, including those in the Treasury,
tend to value science because of the economic spin-offs that come
from scientific activity. There is nothing wrong with that, yet
it is also important, especially if we are inspire the young and
encourage them to take up careers in science, to show that we
value science as an intrinsic good in itself. A recent survey
by the Institute of Ideas reported that a majority of scientists
thought that Government, Research Councils and academia were restricting
academic research by focusing too much on its economic and social
outcomes. We fully support Lord Sainsbury's own conclusion that
our basic research base is an outstanding asset for this country
and we must make certain that we continue to fund it properly.
4.10 At its most basic, science
is linked to humankind's quest for discovery. It is 45 years since
John F Kennedy told an audience in Houston, Texas: "We choose
to go to the Moon in this decade and do the other things, not
because they are easy, but because they are hard, because that
goal will serve to organise and measure the best of our energies
and skills, because that challenge is one that we are willing
to accept, one that we are unwilling to postpone, and one which
we intend to win, and the others too".[211]
Answering the question, "Why go to the moon?", Kennedy
said we may as well ask why climb the highest mountain or why,
35 years previously, fly across the Atlantic. Undoubtedly, the
economic and industrial benefits of the American space programme
were huge, but it was the quest itself which inspired the nation.
4.11 Furthermore, it is simply
impossible to divide science between that which has an economic
benefit and that which is "blue sky" science. It is
also often forgotten that some science supports public policy,
such as the scientific endeavour which supports much of DEFRA's
work on animal diseases and environmental protection.
Research and Development
4.12 Research and Development
is an important component in the quest to increase UK productivity,
a challenge with which the Treasury has been grappling for some
time. Furthermore, its relatively high level of Research and Development
is one reason why the TUC believes it is important to persist
in the development of modern manufacturing on these shores. The
amount of R&D in manufacturing, in areas such as defence,
aerospace and pharmaceuticals, is critically important for our
long-term economic fortunes.
4.13 The TUC has consistently supported
the role of Research and Development tax credits. The decision
in Budget 2007, to increase the enhanced deduction of the SME
R&D tax credit to 175% and the large company R&D tax credit
to 130% from April 2008, is to be welcomed.
THE ROLE
OF EMPLOYERS
5.1 The best British employers
have an excellent story to tell on creating high value. Companies
such as Rolls-Royce, BAe Systems, Toyota, Nissan and BMW are world
class operators who promote skills and innovation among their
workforces. To them, investment in training, innovative working
practices and Research and Development are not costs to be borne,
but foundation stones for future success.
5.2 The challenge for the UK is for all
employers to aspire to the standards of the best. The TUC understands
that not every company can be a Rolls Royce and to compare all
companies with those world-class examples is unfair, as things
currently stand. Nevertheless, if we accept that a high value
economy will require companies to raise their game, the onus is
on all of them to become the best that they can be.
5.3 Lord Leitch introduced
the concept of shared responsibility on investment in skills,
involving all interested parties. For example, he recommended
that the additional annual investment in skills up to Level 3
will need to rise by £1.5—2 billion by 2020. Under
the scenario of shared responsibility, employers will be expected
to significantly boost investment in intermediate and higher level
skills, whilst government commits to increase investment to tackle
"market failure" by fully funding achievement up to
Level 2 and also providing targeted support at other skill levels.
5.4 As the quote from Gordon
Brown in paragraph 4.2 made clear, we have thirteen years to create
four-and-a-half million new skilled jobs. The vast majority of
those must come from the private sector. That is the scale of
the challenge to which employers must rise.
5.5 On innovation, it is important
for companies not just to consider new plant and equipment, but
also to recognise the role of innovative working methods. Lean
production was incredibly innovative when first introduced in
the UK by Japanese motor companies such as Nissan and Toyota in
the 1980s. All of us, including trade unions, found lean production
to be a shock to our systems, yet this production method transformed
Toyota from being a middle ranking motor producer in the 1950s
to one of the world's biggest and most successful automobile manufacturers
thirty years later.
5.6 Innovative working systems
require a multi-skilled workforce, but they also require more
devolution of decision-making to the shop floor. Some status-conscious
first-line managers have struggled with that idea. The best decisions
also require a high level of confidence among those making them,
in an atmosphere in which reasonable risk-taking is rewarded rather
than frowned upon. Such is the nature of innovation.
5.7 Similarly, companies must
not regard innovation as something that other companies do. A
company with that attitude will sink under the tide of globalisation.
Innovative need not be as difficult as it sounds. There is probably
not a company in the UK that could not make simple changes to
make it more innovative.
THE ROLE
OF TRADE
UNIONS
6.1 Modern trade unions also
have a part to play. In 2006, the TUC established Unionlearn,
which was set up to help unions open more learning opportunities
to their members, particularly those disadvantaged in the labour
market. Unionlearn's key annual target is for 250,000 learners
to access learning and skills through the union route by 2010.
Most of these will be advised and supported by union learning
representatives (ULRs), which, in turn, requires the training
and accreditation of 22,000 ULRs by 2010.
6.2 A major challenge for unions will
be to take advantage of the Government's Skills Pledge. This requires
that employers provide free training for all employees who don't
have a first Level 2 qualification underpinned by Skills for Life.
Unionlearn will actively promote this entitlement and help unions
secure employer commitments to deliver the training. We will also
assist unions to negotiate employee development through learning
agreements and by establishing collective learning funds.
6.3 Many trade unions have
also developed modern approaches to relations with management,
that can help to improve both decision-making and employment relations.
To give just one example, the Scottish Qualifications Authority,
working with Unite and UNISON, hold regular consultation meetings,
in which unions are involved in the development of human resources
policy. Having achieved this, management and unions are now about
to begin joint work on proactive strategic initiatives. A behavioural
competency framework has been drawn up and a development needs
analysis has been prepared, against which all union reps and human
resources manages involved in this work are measured. Training
and development to meet identified needs has been undertaken.
6.4 Such an approach to employment
relations is highly innovative and could have an important role
to play as companies seek to move up the value chain in response
to globalisation.
CONCLUSION
7.1 In conclusion, the TUC
agrees with the established consensus, that the UK can only remain
competitive in the era of globalisation by creating a high value
economy. In our view, it is necessary for us to move on from the
prevailing UK economic orthodoxy, in which any strategic industrial
objectives are characterised as "governments picking winners".
Lord Sainsbury provides an exciting list of industries where the
UK can remain competitive or become competitive. That list is
not exhaustive and, in particular, the value of the motor industry
should be recognised, especially where high quality design, as
exemplified by the new Mini, or high rates of productivity, as
shown by Nissan, can provide a competitive edge. We must learn
from the example of the best. We must ensure that ground-breaking
ideas, such as wind turbine development, are developed in the
UK, rather than going abroad, with the economic benefits enjoyed
by competitor countries.
7.2 The findings of the Sainsbury Review
must be implemented. The UK's basic research base is an outstanding
asset and must be funded properly. A national campaign to promote
the value of science, to inspire youngsters to take up scientific
careers, is necessary.
7.3 There will be no place
in a high value Britain for companies that do not train their
workforces. Innovation, including innovative working practices,
is also required. The trade union role in the promotion of skills
and the adoption of innovative working methods must not be overlooked.
7.4 The TUC is happy to send
these conclusions to the Trade and Industry Select Committee and
would be delighted to give oral evidence if that would be of benefit
to this inquiry.
SUMMARY OF
RECOMMENDATIONS
8.1 The TUC's first recommendation
is to re-examine the industry statistics that are produced by
the Office of National Statistics. Although the way manufacturing
and services are measured worked well in the past, the current
definitions of those sectors are no longer fit for purpose. If
we are to focus our energies on high value industry, first we
must develop a greater understanding of what is actually happening,
in manufacturing, services and at all points in between.
8.2 The TUC's second recommendation is
to develop a modern concept of industrial strategy that politicians
and businesses are comfortable with. If that is to happen, the
change will be as much about a new culture as a new policy.
8.3 The TUC's third recommendation
is that the Committee takes evidence from Nissan UK. The UK's
Nissan plant, situated in Washington, Tyne and Wear, has long
held the reputation of being the most productive car plant in
the whole of Europe. We congratulate Nissan on its success, but
this does beg the question: if Nissan can do it, why cannot others
also do it? Evidence from Nissan on the factors which contribute
to its success and the lessons that might be learnt for high value
production throughout the UK, would be very useful.
8.4 The fourth recommendation
is to call for a national campaign to promote the value of science.
Economists, including those in the Treasury, tend to value science
because of the economic spin-offs that come from scientific activity.
There is nothing wrong with that, yet it is also important, especially
if we are inspire the young and encourage them to take up careers
in science—to show that we value science as an intrinsic
good in itself.
December 2007
198 Speech by the Rt Hon Gordon Brown MP, Chancellor
of the Exchequer, at the CBI annual dinner, 15 May 2007. Back
199
"The Race to the Top", p 22. Back
200
"Well Dressed: The Present and Future Sustainability
of Clothing and Textiles in the United Kingdom", Institute
for Manufacturing, Cambridge University. Back
201
"The Race to the Top", p 9. Back
202
"The Race to the Top", p 38. Back
203
"Globalisation and the UK-strength and opportunity to
meet the economic challenge", HM Treasury, December 2005,
p 19. Back
204
"The Race to the Top", p 8. Back
205
Commission on Environmental Markets and Economic Performance,
Defra, November 2007. Back
206
Information report of the Consultative Commission on Industrial
Change on the automotive sector in Europe: current situation and
prospects, European Economic and Social Committee, 23 November
2007. Back
207
"Mini made abroad for first time ever", The Sun,
30 November 2007. Back
208
Speech by the Chancellor of the Exchequer, the Rt Hon Gordon Brown
MP, to Mansion House, 20 June 2007. Back
209
"Prosperity for all in a global economy-world class skills",
HM Treasury, December 2006. Back
210
World Class Skills: implementing the Leitch Review of Skills
in England, DIUS, July 2007. Back
211
President John F Kennedy, Rice University, Houston, Texas, 12
September 1962. Back
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