Re-shoring jobs can drive growth, says Cameron

Published on Friday, 24 January 2014 11:54
Written by Daniel Mason

David Cameron has outlined plans to encourage businesses to bring production back to the UK from overseas – but unions have warned that uncertainty about the country's future in the European Union could undermine the proposal.

In a speech at the World Economic Forum in the Swiss resort of Davos today, Cameron said he wanted to give "dedicated support" to companies looking to re-shore jobs that were previously moved abroad.

"I think there is a chance for Britain to become the Re-Shore Nation," the prime minister said, announcing the launch of a new office, Re-shore UK, tasked with helping employers make the transition.

"In recent years there has been a practice of off-shoring where companies move production facilities to low cost countries. We've all seen it. We all know it's true. And it will continue.

"But there is now an opportunity for the reverse: there is now an opportunity for some of those jobs to come back.

"A recent survey of small and medium sized businesses found that more than one in 10 has brought back to Britain some production in the past year. More than double the proportion sending production in the opposite direction."

UK Trade and Investment has identified 1,500 manufacturing jobs re-shored since 2011, with textiles, software production and call centre firms also returning.

Cameron acknowledged that promoting re-shoring would not bring back all the jobs that have moved away.

However, he suggested that reducing the regulatory burden imposed on businesses by the EU, and providing cheap energy through the exploitation of shale gas, would be vital to encouraging companies to come back to the UK.

The trend could be a "fresh driver of growth" across Europe, he argued.

But Frances O'Grady, general secretary of the Trade Union Congress, said the initiative could not "undo the fear that Britain will leave the EU and end its membership of the world's biggest single market".

Cameron has pledged to hold a referendum on the UK's membership of the EU in 2017, if the Conservatives win the next general election.

Car manufacturer Ford this month became the latest large company to warn the UK against leaving the EU, when its CEO of operations in Europe, Steve Odell, told the Telegraph that such a move by the country would be like "cutting its nose off to spite its face".

O'Grady added: "What really attracts inward investment is world class infrastructure, a skilled workforce and investment in science, not press conferences in Switzerland or inventing a new word."

Cameron's speech was labelled "rank hypocrisy" by Mark Serwotka, general secretary of the Public and Commercial Services Union, after the government allowed a company it contracted to carry out civil service back office work to move the jobs overseas.

Meanwhile Labour's shadow business secretary, Chuka Umunna, said Cameron's government had "failed to deliver the stronger, balanced recovery we need".

"Any help for manufacturers is welcome after three damaging years of flat-lining in a month where factory orders have fallen back.

"But after so many government schemes have failed to deliver for business, manufacturers will want to see what this one offers in practice."

Add comment