'Million factory jobs lost' under Labour

Gordon Brown's reputation for economic management will suffer a blow today from official figures showing that 1 million manufacturing jobs have been lost since Labour won power in May 1997.

Gordon Brown's reputation for economic management will suffer a blow today from official figures showing that 1 million manufacturing jobs have been lost since Labour won power in May 1997.

Business organisations blamed red tape, rising taxes, a strong pound and the burgeoning public sector for the wave of redundancies. They urged Mr Brown to use his Budget to slash costs facing industry and do more to boost skills.

The number of workforce jobs in manufacturing - employees, self-employed and owner managers - has declined from 4.52 million in spring 1997 to 3.53 million at the end of September last year. Figures from the Office for National Statistics today are expected to show the decline, to the end of December, has broken the 1 million mark.

The EEF, the manufacturers' organisation, said some of the cuts were the result of the "inevitable" global restructuring, a constant drive to improve productivity and offshoring work to reduce costs. But it said it was concerned the UK was becoming"less welcoming" in areas such as taxationand regulation.

The EEF published a survey of 500 companies showing almost half believed more production of goods would move overseas within five years, mainly to cut costs. Martin Temple, its director-general, said: "We must ensure that we do not push companies and skilled jobs abroad unnecessarily by adding costs and legislation which smother entrepreneurship and destroy competitiveness."

The CBI, the largest employers' lobby group, said the robustness of the UK economy had enabled it to weather a slump in industrial employment across the Western world. But Sir Digby Jones, its director-general, added: "The strength of sterling has also damaged exports, and public sector growth has squeezed out some companies at the more vulnerable end of manufacturing."

Opposition parties accused the Government of ignoring the plight of manufacturing. Paul Holmes, the Liberal Democrat spokesman for work, said: "We can't afford to ignore this haemorrhaging of jobs when manufacturers contribute £150bn to our economy and make up one-sixth of all British businesses."

A spokesman for the Treasury said employment had risen by more than 2 million since 1997, while unemployment was at a 30-year low.