Unite the Union

Unite the Union

October 17, 2007 04:36 ET

Billions of Pounds of UK Government Contracts Are Supporting Overseas Industry Says Unite

LONDON, UNITED KINGDOM--(Marketwire - Oct. 17, 2007) - Much of the Pounds Sterling 42 billion spent by UK government and local authorities on manufacturing contracts are being awarded to overseas firms says Unite, the UK's largest trade union.

Unite says that manufacturing contracts account for a third of the government's and local authorities annual procurement spend of Pounds Sterling 125 - Pounds Sterling 130 billion and if that Pounds Sterling 42 billion was invested in manufacturing it would create or secure over half a million manufacturing jobs.

Unite wants the UK procurement process to take account of the impact on UK industry and jobs. Unite says half a million high value UK jobs would be created and secured if Pounds Sterling 42 billion of public sector contracts with a manufacturing element were awarded to UK firms.

The manufacturing union says this would have a significant impact on the UK automotive, textiles and train building industries which have all suffered serious declines in recent years. Yet, according to government figures, a majority of government awarded contracts in these areas go abroad. They include:

- 74% of fire, ambulance and police vehicles procured in the UK are produced abroad

- 92% of vehicles used by the ambulance service are produced abroad with just 8% coming from UK producers

- 85% of police vehicles are produced outside the UK

- 70% of trains procured for UK contracts since 1994 were built in the UK according to the latest available figures but Unite says this has declined severely following the closure of the UK's penultimate train builder, Alstom in Birmingham two years ago. Only the Bombardier train making plant in Crewe remains in the UK

- While the textile and clothing industries still employ over 160,000 people in the UK, around 10,000 jobs were lost in 2006 alone

- In last 10 years the number of UK textile jobs have more than halved, dropping from 372,000 in 1996, to 155,000 in 2006

Unite says this compares with other European countries that favour their own producers in the award of public contracts.

Derek Simpson, Joint General Secretary of Unite, said:

"Our message to the government is clear. We have a first rate manufacturing sector and first rate skills - imagine what it could do if it was supported by an intelligent procurement strategy that favours British business.

"The UK government is applying a very narrow definition of procurement which fails to take into account the economic benefits of awarding key government contracts to UK firms. Manufacturing has a value way beyond the physical making of things. It extends to research and development, design, supply, distribution and servicing, it is also more highly skilled and highly paid than jobs in other sectors such as service and business sector so its demise has massive effects on the wider economy."

Tony Woodley, Joint General Secretary of Unite, said:

"Manufacturing is our most valuable employer, exporter and revenue earner so it makes sense that we should do everything we can to support and defend it.

"Every other European country boosts their manufacturing industry through the award of domestic contracts and we can and should do the same."

Unite says that a UK procurement strategy that supports the UK defence industry, the 'Defence Industrial Strategy' has helped create a leading industry and secured thousands of skilled UK workers jobs yet aerospace defence sales in the UK are still only at 18% of sales compared to the USA where US aerospace sales to the government account for 51%.

The MoD's procurement programme of new ships for the Royal Navy has also secured in the region of 7,000 jobs in the sector and secured many more including at least 140,000 jobs in the supply chain.

Fewer than three million people are now employed in manufacturing in the UK compared with 4.2 million just ten years ago.

Notes to editors

1. The average weekly basic pay in manufacturing is Pounds Sterling 373 (Pounds Sterling 19,396). This compares to Pounds Sterling 321 per week (Pounds Sterling 16,692) in all services and to only Pounds Sterling 180 per week (Pounds Sterling 9,360) in the hospitality sector. The fast growing retail sector is another relatively low paid sector at Pounds Sterling 240 per week (Pounds Sterling 12,480).

2. Manufacturing also provides a wide range of skill development opportunities not found in many of the growth industries, not least the service and business sectors.

3. Unite is also calling for a more strategic approach to railways that puts pressure on the railway industry to adopt a procurement policy that has a positive effect on the railway supply chain in the UK. The UK is the only European country which does not insist on a having a significant home build content on orders placed for rolling stock.

4. The Alstom train building plant in Washwood Heath Birmingham closed in 2004 with the loss of 1,400 jobs because three UK contracts were not awarded to the plant.

5. Only one train manufacturer remains in the UK, Bombardier in Derby, and trains made in Germany and the Hitachi 'Javalin' trains made in Japan are gaining in popularity.

Contact Information

  • Catherine Bithell
    07958 473 224
    Unite Press Office
    0207 420 8931