Skills not low wages is way to challenge India and China

2005

British employers need to improve the skills of their workers rather than simply reduce wages if they want effectively to challenge the economic rise of China, India and the rest of Asia, Chancellor Gordon Brown has said.

Speaking to the TUC Congress, Brown said responding to global change should not mean lowering aspirations, protectionism or, even worse, isolationism.

"This is not, as is sometimes said, a race to bottom with China and India that can be met by protecting our home industries, shutting foreign goods out, and hoping the world will go away," he said.

"Because they aspire not to race us to the bottom but to be high skill, high technology economies, China and India are now turning out more engineers, more computer scientists, more university graduates – four million a year, more than the whole of Europe and America combined.

"And so the answer lies not in protectionism, hoping Asia will go away, but in radically upgrading our skills, science and technology," he told the union delegates.

What was therefore needed was an education system "geared to empowering young people with training and skills opportunities for realising their potential they never had before", he said.

He added: "Britain can win in this global economy. We will win because we will not compete on low pay but on high skills; we will win because we will not respond to globalisation by lowering our standards in the workplace but by raising them; and we will win because we will not adjust to global change by protectionism and neglecting investment but by investing more and for the long term."