British engineering deserves a first class environment in which to create and sustain its competitive edge. It is a challenge for us all. For government, our policies must reflect the way world economies are changing. We must create an environment of enterprise and opportunity in which industry can compete to the best of its abilities. We have to develop a knowledge-driven economy, underpinned by a long-term stable macroeconomic framework.
A knowledge-driven economy means more than just exploiting high technology. It means working smarter, developing our skills base and making the best use of our creativity. Much of this can only be done by business. But government must play its part in breaking down barriers inhibiting enterprise.
Our White Paper on competitiveness, to be published next month, will address how we aim to achieve that knowledge-based economy.
Local authorities, the voluntary sector and in future the regional development agencies and others will play a role in raising skills levels and tackling social issues important for competitiveness. The engineering sector has already shown the immense value of training, upgrading skills and investing in R&D to maintain competitiveness.
British Aerospace’s partnership with schools is just one example of that innovative approach to invest in industry’s future success. And the Government’s New Deal and University for Industry provide new opportunities for people to secure employment and gain the skills that industry needs.
Treating people fairly and inclusively at work is also vital to improving business performance by increasing employee commitment, motivation and involvement.
The most effective partnerships depend on a valued role for employees within organisations and a common understanding of business aims and goals, and the individual’s role in achieving these. All employees should be encouraged to develop and reach their potential. There should be a joint approach to resolve employment concerns.
Our White Paper on Fairness at Work sets out a framework of minimum standards which aims to bring the practices of all companies up to the standards of the best. It includes our commitment to introduce a scheme to train managers and employee representatives to develop partnerships. Employers and unions in organisations as diverse as Alcan, Nuclear Electric, Blue Circle Cement and Welsh Water have already entered such agreements. Common to all is a shared commitment to the success of the business, the development of the workforce and the quality of working life.
Everyone knows that a motivated and alert workforce is a productive workforce. New regulations on working time came into effect at the beginning of the month. They protect workers against unscrupulous employers by providing safeguards against excessive working hours. For the first time, employees will be entitled by law to annual leave, daily and weekly rest periods and limits on working hours.
These are sensible, fair standards which most modern companies have already adopted and the regulations are flexible. They enable firms to put in place arrangements which best suit local circumstances, consistent with the proper protection of workers.
These regulations will not be disruptive for employers who already invest in the welfare of their workforce. Its biggest impact will be on those unscrupulous employers who exploit their workforce, working staff to the bone to undercut high-quality firms. These new regulations will help cut sickness and absenteeism, which the Confederation of British Industry calculates cost companies £25bn in 1996.
The introduction of a national minimum wage next April will encourage investment in the workforce, reduce staff turnover and improve employee morale. Business welcomes the opportunity to compete on quality rather than by being undercut by the cowboy operator.
The competitive advantage of our approach is clear. Our vision of a knowledge-driven economy, with fair and decent standards founded on partnership, is the key to our future economic success.
Ian McCartney is Department of Trade and Industry minister with responsibility for the labour market, the Post Office and company law