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BRUSSELS — Britain’s exclusion from the single European currency and the resulting high pound has led to a bleeding away of jobs in manufacturing. Day by day, the press publishes the casualty figures as stories of closures, amalgamations and redundancies, for in manufacturing the high pound is a weakness and the low euro a strength. The only advantage to workers is cheap foreign holidays on their redundancy pay. For every one step forward there are two steps back, as divisions and companies in Britain lose the battle to compete within and between European industrial conglomerates.

The vast majority of companies concerned make it clear they have no future plans for further investing in Britain. If anything, current investment will percolate away in incremental restructurings. In the motor sector, for example, Rover and Ford have closed factories. Nissan is slimming, and Honda in Swindon, our last success story with an announced 400 million pound investment last year, announced last week that it now believed they made a mistake. Now they are downsizing their plans and sharply increasing European, as opposed to British, content in their vehicles produced in Britain. Mazda is currently looking for a European production facility. They are looking both at sites in the European Union and among the vanguard for future membership. The only country excluded from consideration is Britain.

This collapse is contributing to the deterioration of the skills of Britain’s labor force as the current generation, once no longer working in manufacturing, rapidly lose touch with the forward march of process innovation. In two short years, their craft skills have been marooned in the technological past. The situation is even worse for the coming generation, whose career choices are distorted by a chronic lack of good science teachers. This situation is exacerbated by a cultural dichotomy that presents itself either as endorsing the “get rich quick” mentality of much of the e-generation or woolly minded environmentalism, neither of which relates to today’s electromechanical or tomorrow’s biotech world.

Recently in my constituency in Weymouth I visited a small, heavy-engineering company. Their order books were full. They could have taken on another 40 workers if only they could find two expert welders, but they had scoured Britain without success. These kinds of skill shortages will threaten to choke off manufacturing recovery when the speculators allow the pound to return to some reasonable balance with the euro.

Britain is close to a point of no return. Condemned for the moment to inhabit the periphery of Europe, it threatens to become a semi-detached part of the EU politically and industrially, if not geographically, mired in the middle of the North Atlantic. Convincing a public that has been hounded, harassed and bullied by the tabloid press into the camp of euro-skepticism to support membership in the single currency is a problem for another time. What is clear is that to protect the future we must try to ensure the continued availability of a skilled and trained labor force, as well as companies on the cutting edge of technology.

Much of this is being looked to at national level, yet there is a European dimension as well. We in Britain will need all the support we can get to win this battle and mobilizing continental troops and resources to our banner will help. The European Commission will shortly unveil its plans for Framework 6, its high-tech R&D program for the period 2002-2006. This will outline spending priorities for a total budget of at least 12-14 billion euros over that period.

First, it is in Britain’s interest to maximize the expenditure on Framework 6. It is one of the few major areas of EU funding where we receive back significantly more than we contribute. Second, in terms of quality it is important to ensure these resources are clearly directed to ensure Europe makes a difference and gives added value. This is done by selecting and concentrating resources on a few areas of promise. These must be focused close to the market. Framework 6 must be a source of innovation directed along current technological trajectories to underpin Europe and Britain’s contributions to nanotechnology, biosciences, informatics and aeronautics.

We should support easing mobility both within the EU and — like the United States and Germany — encourage Britain and Europe to allow the entry of leading scientists and technologists from the rest of the world. Britain can ensure Europe helps us and the rest of the community to remain competitive in an increasingly difficult global market place. To do otherwise is to accept that Britain will travel steerage as the world moves into the globalism of the 21st century.

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