Patricia Hewitt quizzed at TUC conference

Patricia Hewitt, the Secretary of State for Trade and Industry addressed the TUC conference at a time of increasing tension between the unions and the government. She was unable to appear in person to answer your questions as originally planned. But the Trade Secretary did provide written answers to a selection of your questions which are displayed below.

Government plans to allow greater private involvement in the provision of public services have angered the unions.

TUC leaders have threatened to lead mass protests unless the government backs down.

Patricia Hewitt is also responsible for the government's policy towards manufacturing industry, at a time when job losses have brought into sharp focus the role of UK management.

Ms Hewitt has criticised companies for paying big bonuses to the bosses of failing companies, and she is now in charge of rewriting company law.

And she is also in charge of the UK's trade policy when the future of world trade talks is in jeopardy in the face of anti-globalisation protests.

Can she placate the unions over public services? Can she tackle the problems of "fat cat" salaries? What does she think about future global trade talks?

The Trade Secretary sent the following replies to a selection of your questions.

Dr. Mohammed Karim, England:
Do you believe that the Public Sector must enhance the strategies, and business ethos of the private sector?

Answer:
I think that the Public and Private Sectors can learn a lot from each other.

I've spent most of my working life in not for profit organisations and organisations like this did not often think of themselves as businesses in my time.

But increasingly the voluntary and public sector have found that they can learn a lot from the private sector, but this also works the other way round.

A lot of private companies would love to have the commitment and loyalty that people show when they are working for public services.

One reason why the best companies are taking corporate society responsibility so seriously is that they know people want to work for a company whose values they share and whose behaviour they feel proud of.

That is why I believe that the DTI's work on corporate social responsibility is some of the most important work we do.

Simon Burns, Wales:
At a time when the economy is slowing and many people in hi-tech businesses and elsewhere are being laid off, why are so many firms still able to import cheap foreign labour on the so-called "fast track visa" system? Isn't it about time this policy was reviewed?

Answer:
Where there are skills shortages for example in health, information technology and education we've made it much easier for employees to recruit from abroad without having to spend months waiting to fill the vacancies here.

Once the work permit application is made, for any job, the Home office deals with them very quickly - 6 % within 24 hours and 95% within one week.

Workers coming from abroad, of course, have exactly the same employment rights as everyone else.

Andrew McKay, Bracknell, UK:
As a small business owner trying to develop and grow a small fledgling business by designing new software products, how can I ever hope to invest if IR35 applies?

Answer:

Service company workers who are genuine small businesses taking risks, creating wealth and employment will not be affected by the new IR35 legislation. IR35 legislation ensures that workers who meet the accepted definition of an employee will no longer be able to avoid paying tax and national insurance contributions on the same basis as other employees, by using a limited company to sell their services.

The practice of using service companies in this way has become common for IT contractors, but also happens in other industries eg engineering, construction.

Service company workers currently earn an average of £50,000 a year, but, before our legislation, they paid about 21% on average in tax and NICs, compared with 35% for an employee earning the same amount.

This is about fairness in taxation.

John Garner, Carmen Mexico:
How do large high profile manufacturing companies such as Ford and Vauxhall along with a host of smaller companies seem to be shifting over to mainland Europe to do business, leaving behind a country with one of the "lowest" employment costs and Europe's most deregulated economy?

Answer:
Large manufacturing companies are not abandoning the UK.

In June this year, Ford opened a US $423 million Jaguar car plant in here in the UK. Ford also plan a new high technology engine plant to supply their European market.

Today Honda (Monday 10 September) opened their second UK car plant and earlier this year Nissan chose to build its new Micra model in the UK against strong overseas competition.

In fact, a report by World Markets Automotive published earlier this year showed that Nissan's north east England car manufacturing plant topped the productivity list for Europe by almost 20 percent.

Productivity at the Nissan plant rose by over seven percent in the year 2000. The improvement was achieved at the same time as adding a third model to the production lines.

Toyota's UK car plant at Burnaston was ranked as the second most productive plant in Europe. Last year inward investors created over 70,000 new jobs in the UK.

This is a firm endorsement by some of the world's leading companies in the skills and flexibility of the UK workforce and in the stability and competitiveness of our economy.

The UK attracts more investment than any other EU country and offers investors into Europe the best opportunities in some of today's most exciting market sectors.

The role for government is to provide the right business conditions to ensure that the UK remains the best location for investment in Europe, particularly for high value and high technology investment.

Our role is to sell the business benefits of the UK as an investment location and to work with all our partner agencies to assemble the best possible packages to attract and retain investor companies.