Osborne’s latest manufacturing, workers’ rights and productivity fail

The UK’s manufacturing sector took another big hit last week when official data showed manufacturing had performed much worse than predicted.

By Tony Burke, assistant general secretary, Unite

The UK’s manufacturing sector took another big hit last week when official data showed manufacturing had performed much worse than predicted.

Manufacturing output – a tenth of the UK economy, was 1.3% lower in October than in September, and 2.1% lower than in October 2011. Analysts expected the sector to fall 0.2% both during October and over the course of the past year.

The broader index of production dipped 0.8% between September and October. Production output was 3% lower than it was in October 2011.

These figures added to the fears of manufacturers and manufacturing workers the economy will shrink in the fourth quarter, and prompted Allan Clarke of Scotiabank to say:

“Triple dip watch starts here. We were far more pessimistic than the consensus and clearly we weren’t pessimistic enough.”

The Office for Budget Responsibility and the Bank of England had also ruled out any revival in the UK’s economic fortunes in the lifetime of this parliament. All predictions show the economy will be at best flat, and will go on being so beyond 2016 with any hopes manufacturing will drag the economy out of recession now forlorn.

Output fell across manufacturing with 9 of the 13 manufacturing sectors covered by the Office for National Statistics data shrinking. These included chemicals, wood and paper products, rubber and plastic products – all falling by around 9%.

The poor manufacturing figures come after trade figures showed the trade deficit had widened from £2.5 billion the previous month to £3.6bn in October, putting an end to any hopes a rise in exports could boost the UK economy.

Last week the OBR delivered more bad news to chancellor George Osborne, that the UK economy will shrink next year – the City AM newspaper providing a blow-by-blow account of the fiscal changes.

So what was the Government’s response? David Cameron said the UK had to be “more Germanic” as we try to “re-industrialise” the economy; sadly, he was only referring to current skills shortages.

He failed to mention that in Germany they defended their manufacturing sector with a long term manufacturing strategy; helping companies when needed; strategic investment in manufacturing; a long term, well tested skills strategy and respect for workers and unions – rather than an idealogical and ceaseless attack on workers’ employment rights which will not create any new jobs.

As if to confirm the government’s approach, George Osborne once again re-hashed legislative changes – such as changes to TUPE legislation, to cut the period of consultation between workers, unions and employers on redundancy proposals or closures which allow for counter proposals to be thrashed out to save jobs. Osborne is also pressing ahead with the little supported shares-for-rights scheme which has received support from only 1% of respondents to its consultation. Recklessly, Osborne plans to go ahead with the proposals anyway.

Of the 209 responses to the consultation on Implementing Employee Owner Status, more than two thirds stated the scheme would be of no benefit to employers, or would only be of advantage to unscrupulous employers; meanwhile, more than 80% said the proposals would not lead to any significant increase in employment levels.

The Guardian reported the number of respondents to the consultation in favour of the scheme number is understood to be as few as five (out of more than 200), the official response noting:

“A very small number of responses welcomed the scheme and suggested they would be interested in taking it up.”

It said there were a wide range of concerns about the proposals, particularly around the protection of employment rights, the creation of tax avoidance loopholes for employers and the cost and complexity of the scheme.

Meanwhile as the government lurches forward, crunching through the gears, Lord Heseltine’s ‘No Stone Unturned’ review into what is needed to grow the economy (including an interventionist manufacturing strategy) has disappeared in the rear view mirror.

3 Responses to “Osborne’s latest manufacturing, workers’ rights and productivity fail”

  1. LB

    Business Rates.

    Taxes on employment

    Corporation tax.


    Not surprising that the business has move off shore, where they don’t have these problems.

    If you have a great idea, get it manufactured off shore. Get the royalties paid off shore. Avoid all the regulations and mess.

    That’s why Amazon, Ebay, Starbucks etc are prospering. They have worked out that its government that’s the dead weight. Avoid government, and you can make a go of a business.

    http://www.ons.gov.uk/ons/dcp171766_263808.pdf – 4,700 bn of debt, rising at over inflation.

    Hidden off the books for fear of frightening the victims of the fraud.

    After all, if you’re a civil servant or MP, you might just get out before the shit hits the fan. So if you can just prolong the inevitable, why not screw business over?

  2. treborc1

    Until the public turn against you of course profits drop then you will have a real reason to not pay tax

  3. Newsbot9

    You’re screwing your allies over now? How unsurprising! I have no doubt you’re in favour of inflating your way out, as per your new BoE lacky.

    And of course you love offshore business which screws this country over and kills people here. Kill, kill, kill as usual. Take up knitting or something, ffs, fraudster.

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