Patricia Hewitt, the Secretary of State for Trade and Industry, yesterday ruled out any moves to stem the flow of low-paid jobs overseas, saying she was not going to act to protect Britain's ability to "make cheap white cotton t-shirts".
In comments that will be seen as tacit support for the process of outsourcing that has seen thousands of jobs lost to eastern Europe and the Far East, she said Britain and the United States should "resist the temptation" of pursuing protectionist policies.
She was speaking at the annual conference of the CBI, which on Sunday published figures showing that a third of British companies had moved activities overseas in recent years, while a further 58 per cent planned to move operations abroad, including accounts, R&D and IT support.
Ms Hewitt said: "We are hearing siren voices in the US and Britain to pass laws against it and [who say] 'Don't put public contracts with companies that might decide to put some of their operations in India'. It is easy to see the benefits of jobs saved but more difficult to see the long-term cost to consumers and to business competitiveness."
She said textiles companies in her Leicester constituency had complained that they would be wiped out after she agreed to open the UK textiles market to Pakistan in recognition of its stance on drug trafficking and global terrorism.
"There's no doubt that jobs have been lost in our textiles industry to competition from low-cost and competitive countries but I also know that there's no future for low-cost, low-margin production, certainly not to make cheap white t-shirts.
"We have to work with our companies to help them in areas of their sector where we can be competitive, help workers to become more skilled, and where these jobs cannot be saved they can be sure that the workers get new skills and a new job as soon as possible."
Unions are already highlighting the way manufacturing was decimated when 3.3 million jobs were lost to lower-cost countries in Asia as evidence of what could happen to IT and call centre jobs, in many cases jobs created in the very places hit by the first trend.
The CBI's survey of 251 senior directors found that a growing number of business leaders appeared to be looking overseas. While 29 per cent had already moved some business offshore, 59 per cent said they were likely to expand overseas in the next couple of years.
There was a marked trend towards higher-paid jobs overseas, with 7 per cent of firms moving their accounts functions, a quarter outsourcing IT systems and 14 per cent R&D.Reuse content