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Ian McCartney MP, Minister of State for Trade, Investment and Foreign Affairs (Joint with FCO)
Unions 21 Fringe Event at the TUC Conference, 11 September 2006
Thanks to Unions 21 for inviting me to speak at this meeting, ‘who’s afraid of globalisation?’
I want to start today by setting out what I mean when I talk about globalisation. I am talking about the rapidly increased flows of trade, investment, finance and ideas across national borders.
This has led to an unprecedented pace of change in the way we live as citizens, the way we work as workers and the way we purchase goods and services as consumers. More are on the way. It affects all of us every day – at times positively, at times negatively.
Rapid changes are taking place in pretty much every economy in the world, most famously with the rapid rise of the economies of India and China. To be clear, I am not going to suggest today that globalisation is, in and of itself, necessarily either good or bad for working people.
In many ways it is down to us - as trade unions, as a government and as people of the centre left - to shape this changing world around our traditional values of internationalism, human rights and social justice.
I want to start by sharing a few facts that illustrate in some way what I mean by globalisation.
This will be a century of the most profound changes seen since the Industrial Revolution...
All of these changes have a huge impact on the government, as we try to make sure that the people who elect us benefit from the opportunities that come with globalisation.
Clearly, there is a vital role for a government to play in enabling free and fair trade, so that all countries, not just the rich or emerging economies, benefit from the trading opportunities we have enjoyed for centuries. This is good for our fellow human beings in the developing world, but it is also good for us here at home. Not only by making the goods we all buy cheaper, but also by bringing in new investment and highly-skilled jobs.
I believe good governments are key to helping people prosper through trade. Look at the Korean Pensinsula, North and South. In the 1950s, South Korea was actually poorer than North Korea. It was poorer than the poorest African country. It was a war-ravaged country. It was a country suffering the most crushing poverty and starvation. 50 years on South Korea, now a parliamentary democracy, is the 11th largest economy in the world, benefiting the millions of people who live there, but also benefiting us here in the UK. They are the second largest R&D investor in to Britain, providing British workers with high quality jobs. North Korea, by contrast, is on its knees, unable to feed its people.
So there is a choice, here.
Far from being bystanders as the unstoppable force of globalisation overpowers us all, I believe we can shape this globalised world around values of democracy, internationalism, eradicating poverty and working towards prosperity and opportunity for all.
In practical terms, this means working to deliver the millennium goals on international development; helping businesses to develop at home and abroad on a sustainable and ethical basis; working to prevent the corruption that steals money; opportunity and hope from those who need it most.
How best can government ensure that here at home we benefit from the trade opportunities globalisation brings? Firstly, we need to provide economic stability on a foundation of full employment, encouraging job creation and helping good businesses and their workers to flourish.
Secondly we need to ensure we have a vibrant, modern manufacturing sector, investing in science and R&D. I will say more about this shortly.
Vibrant cities are the drivers of globalisation. So thirdly, we must ensure regeneration in all our cities, making them places where employment grows and where the infrastructure and capacity are there to attract a skilled workforce. But at the same time we need to regenerate our rural communities and our countryside.
Fourthly we need to ensure that we have a dynamic welfare state that pro-actively prevents poverty, helping people when they need support. A welfare state intervening to help the young, those of working age and older people, breaking the cycle that translates today’s poor child in to tomorrow’s poor pensioner.
Fifthly we must improve our workforce's skills. This is I believe one of the most fundamental challenges facing both this country and this trade union movement. Increasingly, across the world, the best way to attract companies is not via low wages but via access to a highly skilled workforce.
Re-skilling is a real challenge for unions. And if I can be a little provocative for a moment, are we better spending £1million of our precious union resources saying ‘don’t buy Peugeot’ in the light of factory closures? Obviously I am not against protest, far from it, but is this really our only response?
Can we not look at trade unions providing services and advice to members to help them and their families in the face of situations that arise for a myriad of reasons including globalisation?
Finally, and referring back to my earlier point, it is critical that we maintain open trade policies that support working people at home and abroad and resist protectionism. This means ensuring we have a set of rules and minimum standards in our world trading system that delivers fairness for all peoples of the world, particularly those who we have failed in the past. And I want to be clear, for us that means rules with core labour standards at their heart.
The Foreign Office works regularly and closely with trade union partners on raising labour standards throughout the world. We have funded programmes for example in Brazil to crack down on child labour. Furthermore I am currently working with Foreign Office colleagues on a project on mine safety to reduce the appalling loss of life in Chinese mines. We hope to make an announcement on this shortly.
We are also working with the NUJ and sister unions on a project to provide technical and editorial support for journalism in the Ukraine. This is an area where the Foreign Office will be seeking further co-operation with the union movement in Britain and abroad in the future.
Remember that 100 years ago, our struggle to improve the lives of workers in similar conditions led to the creation of the labour movement. This is about solidarity.
This is complimented by the work DfID has undertaken with the TUC through the development awareness fund. A fund with twin objectives: raising awareness of development issues among trade union members and working in partnership with unions in developing countries. Protecting workers through core labour standards is a priority for this government, as we seek to build a free and fair world trading system.
We are of course disappointed that further progress has not been made with the Doha Development trade talks. We want them to start again as soon as possible as the WTO is the best chance we have of building a trading system that helps deliver a more prosperous and more just world.
We are absolutely determined to deliver a pro-development deal. After all this Government has led the world in terms of development. The UK’s G8 Presidency delivered an enormous amount for the world's poor. I believe this is one of the proudest achievements in our history. Massive debt cancellation, $50bn extra aid, major announcements on education, HIV/AIDS, polio, TB, women's health, etc. This means that some of the poorest countries on the planet now spend their money on paying teachers, doctors and nurses their wages – rather than paying the wages of rich bankers.
Having made massive progress on debt, aid, health and education, the missing piece of the jigsaw is on trade. That is why the whole government is working so hard to revive the Doha round. Both by putting pressure internally on the European Union to continue to lead on this issue and by raising this systematically with every trade or foreign affairs minister we meet as a government.
Until now I have been mainly upbeat in my assessment of globalisation. I believe this is a time of opportunity for our movement, our country and our world. However I am far from naïve about the harsh reality of globalisation as experienced by millions of working people.
Globalisation can seem as though it is taking away the opportunities that working people have long enjoyed, leaving our people feeling powerless. The world can seem skewed in favour of businesses, who can close a factory in Bolton or Bradford one day and re-open in Bratislava or Beijing the next. Or indeed vice versa.
To the workers left behind and their communities it is a tragedy. In this movement we know only too well that unemployment is never a price worth paying.
To the Government there is also a further challenge:
I also think it is important that I am frank in saying to you that no government can in all sincerity pretend that it can stop all job losses or factory closures…
But government can build a pro-active welfare state (New Deal, Job Centre Plus) to take us back towards full employment, when 10 years ago everyone told us that we would never see full employment in Britain again.
No government can guarantee its citizens will not face difficulties in an increasingly globalised world…but government can bring jobs and hope to communities like my own in Makerfield where in some areas nine out of ten people languished on benefits under the Tories, their potential untapped.
Our people and whole swathes of our communities abandoned.
Yes there are still tough times facing us, but our government is on the side of working people and is prepared to face the challenges of the future, and work with unions to ensure we can all prosper in the future.
Remember however difficult the challenges we face might be, this is a government committed to bringing new and better jobs in to Britain. Indeed United Nations figures show that the UK has received $771 billion in Foreign Direct Investment, which in 2004/05 created 75,000 new jobs and British manufacturing is adapting to change and leading in many industries, from aerospace to biotechnology to pharmaceuticals.
Even in the car industry, where we know there have been some of the most painful job losses, in 2005 we produced about 1.6 million cars – equivalent to the peak number of cars that rolled off the production lines in the early 1970s.
There was also good news last week with Nissan unveiling the new Qashqai model designed in London, engineered in Bedford and built in Sunderland, pledging that the expansion in production would safeguard or create 1,200 jobs.
I know Frances has led much of the TUC's work in this area and I want to commend the TUC for making a big contribution to these ongoing challenges, without falling in to the trap of demanding protectionist policies that would be harmful to our country but also to our fellow workers in the poorest countries.
I have some further reflections of my own as a committed and passionate, lifelong trade unionist, who now finds himself grappling with these challenges as the Trade Minister.
For many workers, globalisation can be a story of instability and change, job losses. For other workers it can be a story of job creation, opportunities to learn new skills. In many developing countries it can be a lifeline for workers - the opportunity to prosper and get a good job for the first time in your life.
So what does this mean for trade unions? The most fundamental challenge in bread-and-butter terms is to recruit millions of new members at home and abroad in the new workplaces, at home and in the emerging markets. We need to look at how we are structured and assess whether we are a movement with the right offer and the right vision to shape our globalised world around our values.
This will bring immense challenges to us all. In some of the emerging countries trade are either very weak or not free. This is about good governance in these countries, working together to ensure that both basic standards are met and that civic society institutions, like trade unions, are free to speak up and speak out on behalf of working people.
We need to work with international colleagues to build a vibrant, progressive, growing movement to speak up for working people around the world. We need to work with governments to ensure there are effective global institutions and ensure that the free and fair trading opportunities we have long enjoyed are shared by working people around the world.
We need to work to ensure that a set of core labour standards are respected across our world. On top of that, we should look to work with international businesses to apply the highest standards, above and beyond a basic minimum.
We need to work to meet the huge skills challenge Britain faces over the next 15 years. If we are to compete on the basis of a high skills, high wage economy, trade unions have a proven and vital role in developing workplace skills.
We have made great strides together already, not least through the creation of Unionlearn. But this is just a start. And where workers have low or no basic skills in the UK, there is a huge challenge for trade unions in reaching out and bringing those people into union membership and giving them access to the skills and training they need to move on.
The challenge for us all is this, is it not: The world is changing very rapidly. Are we as a movement changing quickly enough to meet these challenges? Despite these huge challenges, this is a time of opportunity and hope.
If we get this right, this is an internationalist agenda. Many challenges can only be faced internationally - free and fair trade, tackling climate change, eradicating poverty, getting our immigration policies right.
If we get this right this offers us a chance to deliver better skills for millions of workers around the world It offers us the chance to shape this changing world around our values.
The future can be bright. But only if we show we have the ideas, the confidence, the discipline and the capacity to make the future ours.