17.6.05

Give our manufacturers a break

(...) Since 1997, an endless trickle of new regulations, taxes, inspections and licensing regimes has bulked up the public sector at the expense of the private sector. Some of these, such as health and safety rules, have affected the performance of manufacturing industry particularly harshly. Factory output has declined, more or less, ever since Labour came to power.

But perhaps the most telling statistic of all is that, for every 10 jobs lost in manufacturing, eight have been created in the public sector. Margaret Hodge's suggestion yesterday that unemployed Rover workers should apply for jobs at Tesco is all very well but, if she really had her way, they would be hired as teenage pregnancy co-ordinators, traffic wardens, or as administrators for the National Health Service.

(...) [T]he Asian giants create about a million jobs every year and a factory worker in China earns only about £100 a month, compared with an average monthly salary in this country of about £2,000. And they are not only moving into manufacturing - they are increasingly competing in services, too. We journalists, for instance, might well be concerned that the news agency Reuters is relying more and more on reporters based in Bombay to cover world events.

But what can be said, given the emergence of China and India as competitive threats, is that the Government has done almost nothing to help. And we do not mean it should be handing out grants, promoting national "champions" or pay-bargaining with the unions. The Chancellor was on the right lines when he promised the CBI, soon after the election, "a more humble approach". What is left of Britain's manufacturing industry deserves a break - and what the Government should do is slim itself down and get out of the way.