The Tories often appeared ideologically opposed to the very idea of the Department of Trade and Industry. How successful do you think your three predecessors during Labour’s first term have been in reviving the department?
I think we’ve made huge progress and been very successful. Nobody seriously now says we shouldn’t have a DTI and I think there’s a much better understanding that we need it. You need a department that is focused upon business and the people who depend on business. That’s not simply the people who work in business, but all of us as consumers, too. What I am doing now is to focus the department much more clearly on raising productivity and upon ensuring that the people who depend on business, the workforce, are able to fulfil their potential, by working in high performance, highly productive organisations. I also want to see that consumers are able to have the greatest choice and the best possible products.
Manufacturing industry appears to be suffering from a serious recession. Do you think the government should do more to prevent the situation worsening?
If we get ourselves in the mindset of preventing things we are almost bound to fail. What I think a Labour government ought to be doing is really communicating the importance of hi-tech manufacturing to a modern economy. There’s been too much of a view over the years of manufacturing not mattering. In the last few years the talk about the internet and e-commerce has given the impression that manufacturing is the old economy and the virtual economy is the future. Well, I don’t agree. Modern manufacturing is intensely technology and science rich and enormously exciting. It is a central part of making the UK a leading knowledge-based economy.
Our job as a Labour government is to support the people who work in manufacturing to become more innovative and to exploit the quite extraordinary strengths of British science and technology. We do have some wonderful companies doing that. Car manufacturing, which was once in severe difficulties, is now among the most productive in the world. It’s about design, high technology and highly skilled people. We’ve now got the TUC and the CBI working jointly on a productivity agenda for the manufacturing summit I have called for next month. Out of that, I think, will come a much clearer sense of the regional strategy, led by the regional development authorities, to support manufacturing, not to protect it against change, but to help it to change in order to become more successful.
Do you think that early entry into the euro would help to reverse this trend?
There is no doubt at all that the weak euro has been a very real problem for a lot of our manufacturing industry. It’s a real tribute to manufacturing and business that so many of them have been able to go on increasing their exports to the rest of Europe despite difficulties with the exchange rate. There’s no doubt one of the reasons why joining the single currency would be good for Britain is that it would stabilise matters for our exporters which is primarily manufacturing.
You’ve just come back from world trade talks in Doha. How do you think the events of 11 September will affect world trade and influence the debate about globalisation?
I think the events of 11 September made everybody realise that this is an utterly interdependent world. It very clearly changed the attitudes of the American administration and indeed the American people. Before that there was a real danger of isolationism, but now you get the Americans in the forefront of building stronger global institutions. After the disaster of Seattle two years ago Doha was an historic occasion. What happened was the developing countries, really for the first time, used the power they have – which is the power of the majority. In Seattle they felt utterly marginalized and even bullied by the West. It didn’t happen this time because the developing countries got together to assert their negotiating objectives. The number one objective for the developing world was access to medicines. We went to Doha absolutely determined to help broker a deal on that and we did. There were some very hard issues but we ended up with an agreement. You had country after country say that they hadn’t got everything they wanted, but the point of negotiations was to compromise and everybody had to compromise. It was an extraordinarily mature process which gives everybody greater optimism for the actual trade negotiations which will begin next year. We need to build a strong global institution in the WTO in which the developing countries really feel they’ve got power and influence.
The reaction to your speech at the TUC conference suggests the government still has quite a long way to go in convincing the unions of its plans to modernise public services by involving the private sector. How do you intend to win them over?
The problem over the summer and in the early part of the autumn was that there was a whole lot of shadow boxing going on. There was this abstract idea that private sector involvement in the public services meant privatisation. So we got into this clash between the government and significant parts of the Labour movement over an abstraction. The real issue is about reforming public services so they deliver for the people who use them. We are, thanks to what Labour has done with the economy and public spending, now in a position to make absolutely unprecedented levels of investment in public services. But in order to get the results we want from public services we need to make structural changes. We need power devolved down to the teachers, nurses and doctors who actually provide the services. We need this done within a framework of very clear strategic objectives where there is a vision that everyone can sign up to. We need much more invention in our public services and some of that invention – some of that management expertise, some of the finance – will come from outside the public sector itself. It will come from the private sector and it’ll come from the not-for-profit sector. One of my priorities at the DTI is to develop support for social enterprises, not-for-profit businesses that are trading for social purposes, releasing entrepreneurship and innovation within public services based on partnership.
During the first term the unions appeared determined to do nothing to endanger Labour winning a second term. Now that we have achieved that do you think they are liable to begin making more demands on the government and the Labour Party?
I think it’s important to remember the big picture here. We used to have a politics in which Labour was the political wing of the trade union movement and the Conservative Party was the political wing of the City and big business. It is not healthy for the UK to have politics as divided as that and it meant some quite sharp swings in economic policies. It contributed, although it wasn’t the only cause, to several decades of economic instability. So we made very clear that part of modernising the Labour Party was to remove the old battleground and make the Labour Party the party that could deliver for the unions and business. We realise that the key asset in a business is your people and that it is only by enabling people to perform to their best that you achieve business success. In our second term, we have to go on building that agenda of progressive policies with business and with the unions. We have done it on productivity, with the CBI and the TUC working together, with the minimum wage with the low pay commission and in relation to more flexible and family-friendly working. Building consensus in order to get lasting change is a very important part of Labour’s politics and we shouldn’t think that now we are in the second term it’s less important. If anything, it’s more important.
Recently you’ve announced the decision to give shareholders the legal right to vote on company director’s pay. Is this part of the government’s alleged shift to the left?
As far as directors’ pay is concerned it’s an issue that we, as a government, have been talking about for years. We had a review of company boards, which at the same time looked at company directors, and we received the report at the end of July. I then decided we had to make a move on company directors’ pay. It’s not for the government to tell companies how much they should be paying directors, but it is a matter for the owners who are the shareholders, which include the pension funds, who are investing our money. It is a matter in which the public is entitled to have an interest and to have a say. It’s also part of our progressive business agenda. When we announced the decision we not only had the support of the TUC, which was to be expected, but we also had the support of the CBI and the Institute of Directors, which was not quite so expected.
Four and a half years into a Labour government which is generally viewed as business-friendly Digby Jones, Director General of the CBI, has criticised the DTI as out of touch with business, weak and inefficient. What do you intend to do about this?
Digby was responding to the review of the DTI which I set up when I became Secretary of State. Having been here as a minister I was fortunate in coming into this post knowing the strengths, but also the weaknesses, of the department. There are certainly problems, like not enough of a really business-like culture. Some of the decisions take too long. You don’t have the sense of urgency that you increasingly find in business because, as everyone who works in the private sector knows, the intensity of competition and the speed of changing technology is such that you have to move quickly. Government can move fast in a crisis but when we are in normal mode we don’t move fast and we need to make some changes there.
Do you think there is a danger that by talking up the merits of globalisation and appearing wholly unsympathetic to the anti-globalisation movement, the government risks alienating potential Labour voters, especially among the young?
I hope that after 11 September and after the WTO we can move beyond what has become a really sterile debate. There are very real concerns about the process of globalisation: what it’s doing particularly to the poorest people in the poorest countries and what it’s doing to our environment. We have to address these concerns. Clearly, the violent end of the globalisation movement is behaving in an utterly unacceptable fashion. But at the serious end, people, who come to see me at my surgery who are deeply concerned about globalisation, are often being fed misrepresentations and myths. At Doha practically everyday quite regardless of what the draft text said, regardless of the fact that on the first day we made a breakthrough on public health, the whole thing would be denounced as an insult to the world’s poor. Yet here were the governments representing the world’s poor actually participating and achieving. We get hundreds of letters coming via MPs from constituents who really believe that world trade is making people poor. It isn’t, it’s making them better off. So I hope we can move on to the real agenda which is how we make globalisation work. It has taken the West centuries to get to our present level of development but with each new wave of development that time scale has reduced. Look at how rapidly South East Asia managed it; look at the process of industrialisation and development in China: it’s a fraction of what it took Britain.
You’re also minister for women. Labour used to argue that this is a job that should have its own Cabinet minister and department. Do you think that is necessary?
There are two of us, there is also Barbara Roche, and we have a very good unit which we have recently strengthened and is now the women’s and equality unit. Barbara is not only minister for women, but also chairs the cabinet sub-committee on equality so we have pulled together work on all the equality issues. I particularly feel that combining minister for women with the DTI role is useful because women are half the workforce. The whole issue of equality and equal opportunity is an economic issue just as much as it is a social issue.
The government has announced it will change the law to make all-women short lists legal. Last time they were introduced they caused quite a bit of discontent within the Labour Party. How do you intend to prevent this happening again?
As a government minister my role has been to make sure that the law is changed so that political parties can take the action they want to take. It will be up to the Labour Party to decide, through the normal process of policy making, what kind of rule changes they are going to make and to put that to conference. As a feminist within the party, I hope we will come up either with all-women short lists or with some other form of positive action that will allow us to go on increasing the number of women representatives, not just in the House of Commons, but in local government elections. It is a pity that after the big breakthrough in 1997 we did slip back again at this election. We’ve found that without positive action we went back to selecting a rather large number of men. This is not about career opportunities for women who are interested in politics, it is about representation within our democracy. Like many people I was very worried about the decline in turnout at this year’s election. This was partly because most people reckoned they knew what the election result was going to be. But what was very apparent on the doorstep was the cynicism and the disillusionment with politics. It is a disaster if people feel alienated from the political process. I think one of our biggest challenges as a party is political re-engagement and one of the reasons for political disengagement is that people look at councils and look at the House of Commons and they still see middle-class white men. We’ve changed that on our side of the House of Commons, but as a whole it’s still deeply unrepresentative. I see the women’s representation bill as very much about helping to restore the health of our democracy.