UK needs new policies to tackle globalisation - lawmakers

LONDON - Highly-skilled workers in Britain are under threat from increasing global competition and the government needs to lay out new policy showing how it will respond to the challenge, lawmakers said on Tuesday.

"The notion that globalisation will have the greatest impact upon low-skilled employment may no longer be appropriate. Many emerging economies are investing aggressively in research and development and their skills base," said John McFall, chairman of parliament's Treasury Committee.

"As a result, highly skilled sectors in the UK labour market are likely to face increasing competition. It is imperative that government policy responds to this challenge," McFall, a member of the governing Labour Party, said.

To reflect globalisation's increasing importance in policymaking, the government should produce an annual review to consider its likely impact and potential responses, the Treasury Committee said in a report published on Tuesday.

The review could be published at the time of the government's pre-budget report, the committee suggested.

"The government has a difficult balancing act to perform. It has to maximise the benefits of globalisation and public understanding of those benefits while ensuring that economic and social policies are responsive in the face of the adverse effects," McFall said.

The report concluded that a profound shift in global economic power from West to East was under way.

Western economies including Britain's will play a diminishing role in the global economy over time, while China, India and other emerging nations like Brazil and Russia will play an ever increasing one, it said.

The report also warned of the dangers of increasing protectionist sentiment in Europe and the United States.

The committee said the immigration of skilled labour had an important part to play in improving the skills base of the British economy, but added it was not convinced there had been enough analysis and debate about the subject.

Improving Britain's skills base is the government's "most fundamental challenge", it said.