Globalisation threat to UK jobs
Countries like China are increasingly competing against the UK economically
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Tuesday, 16, Oct 2007 11:31
Globalisation is posing an increasing threat to highly-skilled jobs in the UK and the government should respond to the challenge, MPs have warned.
In a report published today the Treasury select committee warns that "an inexorable shift in global economic power from west to east is underway", with China at the fore of globalisation and India also set to become an economic "powerhouse".
While some businesses currently enjoy a potential "competitive advantage" in establishing relationships with Indian companies, MPs warn that greater global competition will have a "profound effect" on the UK economy and change the economic landscape "dramatically" over the next ten to 20 years.
"The adverse effects of globalisation on individuals in the United Kingdom may in many cases be more tangible and immediate than the wider benefits for society and the economy as a whole," the report stresses.
MPs say that contrary to popular belief, the impact of globalisation will be felt by high-skilled, as well as low-skilled, workers. While some companies have outsourced low-skilled jobs to low-wage economies in recent years, parliamentarians stress that highly skilled jobs in the UK are also under threat due to the investment the world's emerging economies are making in research and development and to boosting their own skills bases.
Parliamentarians say that as such the government should develop an appropriate policy to recognise the growing impact of global competition on the UK's high-skilled workforce.
Treasury select committee members also warn that the spread of globalisation has increased the need to develop a competitive corporate tax system and state that simplicity is "crucial" to such a system. MPs say the government should therefore provide a "more thorough and systematic analysis" of the effectiveness of its measures to create a "simpler and better administered" tax system.
Meanwhile the report recommends that the government should publish an annual review to assess the impact of globalisation on the UK's economy, suggesting that such an assessment should be released at the time of the pre-Budget report.
A Treasury spokesperson was unavailable for comment.