As part of the country’s approach to globalisation, Chancellor of the Exchequer Gordon Brown has told business leaders that there should be more flexibility in pay negotiations through local or regional deals.

During the speech at the CBI president’s dinner, he also said that he wanted to limit public sector pay increases for the next two years.

The Chancellor said: “Your companies and our country are in the midst of the biggest global industrial and economic restructuring the world has ever seen: the replacement of national flows of capital by global flows of capital, the national and continental sourcing of goods and services by global sourcing of goods and services.

“The paradox of today’s globalisation is that even its winners feel themselves to be losers. People who are benefiting from cheaper clothes, cheaper electronics goods still think of globalisation as job losses.”

He warned that increasing protectionism by countries could bring about the kind of world-wide depression seen in the 1930s.

“Unless we can explain that the same globalisation that is seeing the loss of old jobs can create new and better jobs; unless we can show the same globalisation that sees jobs sent offshore can see more jobs created onshore; unless we can illustrate how the same globalisation that is forcing displacement of labour is also opening up new opportunities for millions; then people will see globalisation as a recipe for insecurity not the potential prosperity we know it to be, “ he added.