Prescott rejects job-loss claims

TUC Conference

JOHN PRESCOTT slapped down union leaders yesterday for blaming job losses on government policy. The Deputy Prime Minister acknowledged that "life is not easy" in some parts of manufacturing, but dismissed assertions that it was all caused by high interest rates.

He told TUC delegates that union officials should stop talking Britain into a recession. In particular, he took issue with comments by Ken Jackson, general secretary of the Amalgamated Engineering and Electrical Union, who said the economy was "within hours" of diving into recession.

The Government was determined to keep to its strategy of "sustainable growth with inflation under control", he told the conference. Mr Prescott said that, while the closure of the Fujitsu and Siemens plants in the North-east was "tragic", ministers were doing all they could to deal with the aftermath. "But don't try and tell me it is all to do with the pound and British interest rates."

Mr Prescott said the electronics factories had been hit by the collapse of microchip prices from pounds 30 to pounds 1.30 and problems in the Japanese and other Asian economies. Similar plants had closed in Silicon Valley in the US, in Ireland and on the Continent. "They are nothing to do with the British pound or interest rates."

Mr Prescott said the Government was working to create a quick-response team to help manufacturers at the first sign of job losses. The Deputy Prime Minister had held talks with cabinet colleagues to use regional development agency taskforces to come to the rescue of firms such as the electronics group Philips, which has warned that 3,000 jobs are under threat at its plant in the United Kingdom.

However, an unrepentant Mr Jackson reiterated his warnings that the British economy was "staring recession in the face".

The engineering union leader said: "The economic hurricane reaching our shores from the Far East is being compounded by the strong pound and by high interest rates." Both employers and unions were united in their assessment that the UK was threatened with a severe economic downturn.

In his address to the conference Mr Prescott insisted the Government had made a "damn good start". He said that the recent "Fairness at work" White Paper was a big advance for social justice, although it did not grant unions or employers everything they wanted.

His praise for the document is thought to be an attempt to ensure that Peter Mandelson, Secretary of State for Trade and Industry, will resist employers' demands that it should be watered down.

Bill Morris, general secretary of the Transport and General Workers' Union, later told delegates that they should fight vigorously against moves by the CBI to keep a ceiling on unfair- dismissal awards and block automatic recognition where a majority of workers belong to a union. He said: "Let me sound a note of warning. Be on your guard. There is a back door to Number 10 and there is a back door into the Department of Trade and Industry. The employers will use those back doors to get the White Paper watered down."

The 800 TUC delegates overwhelmingly passed a motion welcoming the White Paper with reservations and urging ministers to refuse to accept any amendments.