Rt. Hon. Jacqui Smith MP

TUC Northern Annual Regional Conference

If we'd have been standing here ten years ago, we'd have been talking about very different issues to the ones we're talking about today.

Then, unemployment was 3 million. Today, it is half that. Long term and youth unemployment slashed. Women's employment at a record high.

Ten years ago, Britain was in recession. Today, we're the only major industrial economy to have grown in every successive quarter for six years.

Ten years ago, unions were marginalised. Today, trade unions are key partners in the policy process.

Ten years ago, trade union membership was plunging. Today, it is rising.

The latest figures, published in March showed

The number of trade union members up;
The proportion of unionised employees in the workforce up; and
The number of employees covered by a collective agreement up.

And, crucially, for the first time ever, working women now more likely to be union members than men - particularly impressive considering that women are more likely to be part time workers.

For many people, for many women, the trade unions are once again becoming relevant.

I am also pleased to be here in the North East, an area that has always struck me as a region of fascinating contrasts. The variety of the region will be reflected in your membership - public sector jobs, services and, of course manufacturing where I want to focus. Manufacturing is vital to the local economy as it accounts for nearly 20% of the workforce, some 320,000 jobs, many of whom are employed in new and exciting areas of activity such as biotechnology and microelectronics.

As I meet with businesses and their workers across the country, I see at first hand just how hard our manufacturers are having to fight to stay ahead of the field as global competition has intensified.

To face up to these challenges we need good leadership, good management skills, a highly skilled workforce, a flexible labour market that promotes diversity and fair treatment, and high performance workplaces. Unions have a key role to play in this. As you all know, we are working in partnership with unions to help them build on their achievements and enhance their role in the workplace, and in society more generally.

And with Information and Consultation, we've developed a good model for engagement between Government, business and unions that we want to strengthen.

That is why we recently announced in our Employment Relations Bill, the Union Modernisation Fund which will help unions modernise their operations.
The fund will help unions plan for the long term better, to think more strategically, contribute better to our long-term economic success and the success of their members.
We can see this strong engagement in action with the Government's Manufacturing Strategy, which we established two years ago.

Marking a step-change in our approach to industrial policy, the Strategy set out a framework for the necessary actions for Government, industry, unions, and others for what we all we are all working to achieve - a strong and successful manufacturing sector, supporting good jobs.

What is clear is that - in the increasingly global marketplace, firms cannot remain competitive by simply producing their products cheaper. They certainly can't by bearing down on labour costs. That quickly leads to a downward spiral - with more and more pressure on prices and margins, and ever more cost-cutting.

Instead, we are working together to ensure the long-term future of manufacturing. Providing the right environment where high value, high skill manufacturing can create new products and processes, open up new markets, create new jobs and deliver a huge boost to our prosperity.

There are great opportunities for our manufacturers that can exploit the increasing openness in world markets and new technologies and processes. The aerospace market, for example, is forecast to grow by at least 25 per cent in real terms over the next 20 years to £250 billion a year.

And there are other fast-growing areas emerging. The medical equipment sector is estimated to be worth around £170bn and to expand at an annual rate of around 8 - 10 per cent in the next few years.

Here in the UK we have world-class companies in every sector demonstrating how they use the latest knowledge and technologies to stay ahead of their field.

The TUC had a key role in helping us to develop the Manufacturing Strategy.

And you have key role in taking it forward.

For example, by co-ordinating union involvement with the new Manufacturing Task Group, chaired by Derek Simpson.

By working with us on key areas such as procurement. Helping us to ensure that we can enable manufacturers in the UK to compete successfully for the £125 bn a year of goods and services procured by the public sector.

By helping us to spread best practice on workplace performance. We quickly established the Partnership Fund to foster progressive styles of working. Unions have benefited significantly from this fund. Just recently, the Fund began supporting a major project by the GPMU, KFAT and AMICUS to promote partnership working in very small businesses.

We are also working together to raise skills levels across the workforce. In the first term we worked together with huge success to get people into work. The challenge now is to turn those jobs into better jobs. And unions have a vital role in this - raising skills, value and quality. The Union Learning Fund was established in 1998 to help unions assist their members in developing themselves and updating their skills. The Fund has grown significantly over the years as union capacity in the training area has grown. Next year, the Government has set aside £14 million for the Fund. That is a large commitment which supports an ever-growing network of training specialists in unions.

As a result of the partnership approach we've established, we're making good progress on the Strategy.

We've put in place, with Regional Development Agencies, the Manufacturing Advisory Service across the English regions and in Wales, providing companies with easy access to manufacturing specialists offering real experience and hands-on advice.

The Service has already proved to be a great success. The latest results show that more than £39 million of added value has been realised in the companies who have been helped by MAS. Regional teams have conducted more than 5000 one day diagnostic visits and followed these through to implement 1,100 in-depth consultancy assignments.

And behind those headline figures are dozens of our companies that are stronger and better able to compete in today's difficult markets - better able to contribute to our prosperity. Better able to create and safeguard jobs.

And there is a lot more that I could highlight to illustrate that we are making progress with the Manufacturing Strategy.

We are building on our strength in science - which is universally accepted as a catalyst in the development of new products and new processes. Today's breakthroughs in research will become tomorrow's new products.

By 2005/6 the Science budget will have more than doubled since 1997/8. And as we confirmed in the Budget, we have also launched a consultation with business, research foundations and the scientific community on the framework for a ten-year strategy for investment in science and engineering. This framework will aim to make Britain one of the most competitive locations for science, research and development and for innovation.

We've also formed innovation and growth teams for aerospace, automotive, and a number of other sectors - all led by industry. We're helping these teams to implement the actions they have identified as essential to ensure the future success of their sectors.

There is a lot more that I could highlight that we are taking forward with the Manufacturing Strategy. You are involved in much of it. For example, the work of OneNorth East, which Margaret Fay will be speaking about very shortly.

A sector that contributes so much deserves to be properly valued. As a government we see the value of manufacturing and know how crucial it's to our country's future prosperity.

Manufacturing matters. It matters to the Government because it matters to the country.

It is central to our future as a high technology, high value successful economy. To continue as a leading economy, we must have a world class-manufacturing sector. Germany does it. Japan does it and we can do it. In many areas, the best of our industry is amongst the best in the world. Later this spring, we will publish an update to the manufacturing strategy outlining how, working together, we can really build the conditions we need for a strong and successful manufacturing base, and respond effectively to the challenges of the extraordinary global change that is taking place.

Yesterday, I took part in the very first Equality North East Awards which celebrated the achievements of firms in this Region who have consistently demonstrated their commitment to equality and diversity. The award winners were doing the right things for the people who work with them. But, they were also doing the right thing for their businesses and workplaces. Because the business case for a more diverse workforce is clear.

Today's business environment is changing - in just seven years only a third of the workforce will be male and under 45.

The working age population will increase by a million in the next ten years and minority ethnic communities will account for more than half that increase.

A diverse workforce can have a better understanding of customer needs, helping to identify new products or markets.

Being successful in business, then, is about winning the battle for customers and clients. But increasingly, it's also about winning the battle for talent in those who work for you. Recruiting and retaining the best people. We're still not making the best of the massive potential in our diverse communities - either in our businesses or in our public services.

Take the problem of job segregation. Six out of 10 women in paid work are working in just 10 occupations-typically, those that pay the least. So we need to look at the choices that girls and women are making about the subjects they pursue at schools and the careers and jobs that they then go into, as well as at what we can do about the pay levels within those occupations where women are already concentrated.

Just as we are concerned about the under-achievement of boys in school, we have to remain concerned about the lack of girls going into non-traditional areas of work, such as engineering and technology. Indeed 95 per cent of those graduating in engineering are men, while 90 per cent of students taking a health and social care vocational qualification are women.

In both of these crucial areas we are missing out. Missing out on the many talented female engineers who could be a credit to the manufacturers who tell me how difficult it is to get the right people with the right skills. Missing out on the young - and older - men working as nurses, in childcare or teaching young children - helping to fill these vital jobs, but also making the statement that caring is something for the whole of society.

Equal access to jobs in all sectors is also necessary to help us tackle the pay gap. As women we're playing an increasingly important part in our economy, but too many of us are losing out because we still face an average pay gap of 18% if we work full time

The causes are very complex - men and women have different work experiences, with women often choosing to take time out to have children.

Even travel patterns can have an impact. And the pay gap is also affected by where people live, their level of qualification and crucially the jobs that they choose to do.

But in some ways, the news is better than that 18% pay gap would suggest. Because if we look at the median figure - the one that measures earnings right in the middle of the range - the figure drops to just under 13%. In 1997 it was 16%

So overall, the figures indicate that the pay gap between people on lower salaries is shrinking much faster than that between men and women on higher salaries.

This strikes me as something that the trade union movement can take credit for, particularly the women within it who have fought so hard and so long to improve women's pay and reduce the pay gap.

That's why we've doubled the funding to trade unions to train workplace equal pay representatives. The Government has also been working with the EOC to promote equal pay reviews.

And we've put our own house in order by requiring the civil service to undertake equal pay reviews.

We've introduced an equal pay questionnaire, and we're also going to streamline the complex rules of procedure relating to equal value cases.

Because concerned at the length and complexity of some of the equal pay cases that women have brought

Although on average latest figures suggest that equal value cases take around 20 months to complete, we know that this can range from five months to 49 months - and that some cases can take far longer.

That is why we want to take steps now.

So I was pleased to announce that the Government will be taking steps to make the existing equal pay legislation work better to help tackle those lengthy delays.

We have plans to streamline the procedural rules and we are looking to make use of the broader changes to tribunal regulations currently being consulted on. For example enabling specialist tribunals, with greater experience of equal value issues, to take on these large and complex cases. The intention at the moment is to bring these regulations into effect in October, at the same time as the new Employment Tribunal Regulations

It is a challenge to those of us who's political life started in the battle against unemployment in the early 1980s and those in trade unions who have rightly focussed on maximising their members benefits from work to recognise that work is not all we do with our lives - or at least it shouldn't be! Enabling people to work in ways that allow them to balance their work with the rest of their lives is good for them, their families and their commitment to work

That's why I'm pleased that this month Patricia Hewitt marked the first anniversary of
- paid paternity leave
- the biggest increase to statutory maternity pay since it was introduced in 1948
- maternity leave doubled to a year
- the right to request flexible working - for fathers, as well as mothers

In the last year, nearly a million parents have asked for a change in their working hours. That's a quarter of all parents with children under 6.

So can we stop there? Of course not. Too many parents are still struggling to balance work and family.

We need to understand better how parents reach decisions about how they balance childcare with the need to earn a living and whether choices made meet expectations

Let me be clear. The Government has said that it will not make any further changes to the working parent laws until after a review, which we have said we will commence in 2006.

It is right that the working parent laws have time to fully bed in and everyone has time to learn to use them to their best effect.

But that does not mean that we should not listen now or build up an evidence base so that when we review the laws we can take sound decisions based on a robust evidence base.

This is why the DTI is now opening up a debate with parents and employers.

Over the next three months DTI is running a series of roundtables so we can talk directly to parents and employers about their experiences. The roundtables will take place across Great Britain - just as we did before 2001.

There are many issues that will need to be considered as part of this debate:

the impact of the flexible working law and other laws;

how can we give greater equality to mothers and fathers and hence greater choice

And, how can we better support parents make that difficult trade between time to meet their parenting and work commitments and money to provide for their families.

I hope you and your members will have the chance to take part.

In order to make the progress we all want to see in developing a diverse workforce and tackling discrimination, we need strong and effective institutional support.

To this end, in October last year the Government announced the creation of a Commission for Equality and Human Rights.

We are drawing together the existing equality commissions along with support for the new equality legislation for sexual orientation, religion and belief and age. We are also adding the promotion of human rights to the mix. Human rights provides the vital missing link between basic fairness for the many, and basic fairness for the few. It is that link that makes equality very plainly an issue for us all.

I want the new body to be much more than just the sum of the existing parts. The new body provides us with an opportunity to have a strong champion - making the case for equality and diversity in the workplace and across society more widely. It will give easier access to guidance and information for individuals and for employers. And it will have a strong regional presence. I was really pleased that Julie Hawksby was able to come to London to talk to my officials about the success of Equality North East where I know the TUC has been a key partner. It is the success represented by your work that we need to be able to build on.

I look forward to the Commission playing a key role in building a new, inclusive sense of British citizenship and identity, in which shared values of respect, fair treatment and equal dignity are recognised as underpinning a cohesive, prosperous society.

Working together as the government and the trade union movement, then, we have been able to make progress - on developing the Manufacturing strategy and putting it into action, on working to create higher quality and more diverse workplaces.

If we win a third term, there will be much more to do. It is the nature of our roles that we won't always agree on what or how to go about doing it.

But we share both values and history. And we have proved that working together we can all gain - more and better jobs, a more prosperous and inclusive society and economy. I look forward to continuing that work alongside you in the North East.