The TUC was shocked at Tuesday's news of nearly 3,000 aircraft manufacturing job losses at BAE systems in Yorkshire and Lancashire. And if that news wasn't bad enough, in Lancashire six supply jobs are expected to go for every one that will be lost at BAE. All 60 apprentices at Brough, East Yorkshire will be affected. Lost wages, from £10,500 for junior apprentices to about £42,000 for senior grade fitters, will seriously hurt local economies.
Unions have vowed to fight the cuts and the TUC will support them in any way we can. And while it will be of little comfort to those facing redundancy, we are determined to ensure that lessons are learned by both employers and the government.
Most obviously the artificial distinction between the public and private sectors, which underpins the government's deficit reduction strategy, is completely discredited. Ministers repeatedly claim that the private sector will step in to fill the estimated 400,000 public sector job losses. Yet nearly 30 per cent of government spending is in the private sector, higher than the entire public sector pay bill. Government defence cuts have caused the job losses of BAE systems - a private sector company.
Government action, rather than more words, in support of economic growth would be welcome. Ministerial claims that the defence industry will be at the forefront of an export-led growth strategy look hollow now.
But it's not just the defence sector that has suffered. Despite all the talk of rebalancing our economy, manufacturing continues to show job losses, not job gains. Employment levels have fallen by 11,000 over the last three months and by around 1.5 million over the last decade.
Ministers promise to do more to support manufacturing, but their growth strategy seems to be based solely on corporation tax cuts and reducing so-called red tape. Yet UK corporation tax rates are not uncompetitive and rules requiring basic minimum standards from employers are hardly a drag on growth. None of our major competitors have boosted their success this way.
Instead the TUC argues for a modern, intelligent industrial strategy. With government spending tight, how we spend, rather than how much we spend, is a good place to start. Government procurement is still driven by lowest cost. Skills clauses and support for struggling economic areas, both of which could all help to build the jobs and skills needed for a modern economy, can actually can against a company bidding for government contracts. Future UK procurement policy should be driven by a simple test: does this contract add to jobs, skills and growth in UK plc? If it doesn't then taxpayers' money should not used to back it.
Other ideas, such as a strategic investment bank to supply long term funding, need to be developed. Take the example European Aeronautic Defence and Space Company in Germany, which is seeking to sell its 7.5 per cent stake in Daimler. The state-owned KfW bank looks set to step in and buy it, in order to protect jobs in that country. Nobody in government sees this as the ideal scenario, and such moves should happen only rarely, but the protection of jobs and skills in Germany takes priority. No wonder Germany is the most successful manufacturing nation in Europe.