Lord Knight of Weymouth
That this House takes note of the effect of globalisation, technology and demographic change on the future of work, and of the public policy response to those changes.
Lord Knight of Weymouth (Lab)
My Lords, I am most grateful for this opportunity to open a debate on one of the profound political challenges of our generation. I am grateful that such a distinguished list of speakers has chosen to follow my lead. I am especially looking forward to the maiden speech of the noble Baroness, Lady Wyld, whose own family story in the north-east is a great one to reflect the changing nature of work.
I also noted that it took the Government a little while to decide who would respond from their Front Bench, perhaps it being less than obvious which department leads on this cross-cutting issue. I am delighted that the bottle stopped spinning in the direction of the noble Viscount, Lord Younger of Leckie, his background in HR and recruitment making him the perfect choice.
I have been thinking about this issue for the past year as a member of the Future of Work Commission established by Tom Watson MP, which will publish its first report soon. I am grateful to fellow commissioners and the secretariat for informing and inspiring me, as I am to all those who sent in briefings for this debate to accompany the excellent Library briefing.
Later this year, I am taking my mum to the grave of her uncle at Ypres, 100 years after his death in the First World War. It has inspired me to look a little more at my own family history. George, my uncle, and my grandfather, William, were both born in Wolverhampton and went to the local school run by the Sisters of Mercy for the children of Irish Catholic migrants. Their education was sufficient for the factory, and if it were not for the war their economic destiny was assured. One died, the other survived.
At the end of the Second World War, my mum, William’s daughter, started school. She later made the cut and was one of the lucky 25% to make it to grammar school, a system designed to meet the need to develop some talent for the professions and academia while the rest were mopped up by mass work in the factory.
By the time I went to school, the promise of working hard for exams to go to a great university to study under my noble friend Lord Giddens was that I could then get a well-paid job for life, a 25-year mortgage, a final salary pension scheme and retirement in my 50s. Well, what happened to that? It has all changed. The factories have largely gone. There are sectors which struggle to find people who want to do the work, like care or harvesting fruit and veg, and degrees and debt for around 40% is a more questionable investment for some.
My children, in their late 20s, are doing well but are a long way short of home ownership or saving for a pension. If they start a family, as I hope they do, it will be much later than it was for me or my mum; they are likely to work much longer and cycle through multiple careers.
I am very proud of them. They are likely to go through multiple careers. Their security is in their strength of character and agility to keep reskilling or choose careers particularly resistant to technology. My son is working directly in digital and my daughter has wisely found her vocation in opera direction, one of the last jobs that could be disrupted by robots and much safer from deskilling than being a Member of your Lordships’ House, although I suspect we are more likely to be enhanced by AI than replaced by noble robots. My family story is not uncommon. The economy of the last century may have had less mobility and opportunity than it has now, but it had more certainty and security than the one that we are custodians of in this Parliament.
Two weeks ago, Pearson, Nesta and the Oxford Martin School published an excellent report and analysis on the future of skills for 2030. They looked at the interaction of globalisation, technology, demographic change, climate change, political instability, urbanisation and income disparity. To make things simple, I have stuck just to the first three. My triumvirate of factors are not all bad. As the Library Note says:
“Globalisation has coincided with a decrease in extreme global poverty and a decrease in inequality between countries. However globalisation has also coincided with an increase in inequality within countries”.
Longevity and declining birth rates look challenging to the Treasury, but personally, I am a fan of longevity, so long as we do not get to total rejuvenation. With respect, the notion of immortality and a life peerage leading to an eternity with your Lordships might be a mixed blessing.
Tech change, be it digitisation, data, AI or robotics, can be and are all used for good. There is nothing inevitable about dystopia. The heart of this debate is our choice of how active we should be: first, in understanding the interplay of forces that are changing work, and then how active we want to be in promoting a more utopian outcome. What is the effect on work of the combination of technological change, globalisation and demographic change? In its briefing, the John Lewis Partnership told me that more than half of jobs in retail could be automated. The British Retail Consortium predicts 900,000 fewer jobs in retail in this country by 2020, but that more than 100,000 new jobs will also be created that need new skills. PwC’s excellent Workforce of the Future report predicts 28% of jobs being at risk from automation, some being higher-paid, professional work. By contrast, a Salesforce-sponsored study predicts that, over the next four years, AI-powered customer relationship management activities will boost global business revenue by $1.1 trillion and create more than 800,000 direct jobs and two million indirect jobs, surpassing those lost to AI-driven automation.
I am an optimist. My judgment is that new technology will create new work that ultimately compensates for job losses along the way. Our problem is that we do not know whether there will be a time lag between lost work and new work, or where the new jobs will be. Our responsibility is to ensure that the UK is well placed in terms of supply-side measures, such as skills and investment, and in terms of our relationship with globalised economic forces, to take advantage of the new work. The pace of change is certainly a worry. The first industrial revolution of mechanisation and steam power was highly disruptive, but we had just over 100 years for generations to adjust before the next revolution of mass production and electricity. We then had 70 years or so to adjust before the third revolution of automation and computing. We are a long way from adjusting to that, while we now have to pivot again, as a society and an economy, around cyberphysical systems and everything being connected over the internet, and of data being more valuable than labour.
We see businesses making logical microdecisions for their efficiency that create job losses. Aggregated together they create a significant macro problem. The collected effect of those job losses is fewer workers, less consumption and therefore less spending in the economy to benefit those businesses. With less tax being paid, of course, the public sector is also constrained in responding. We urgently need new thinking that incentivises a rebalancing of management thinking around value. We need value for customers, workers and society to be balanced alongside shareholder value. We took a very wrong turn in management thinking in the 1980s. New economic thinking needs to appreciate the value of work. We need a stronger vision of good work, with dignity, security and empowerment available to all. In the latest British Social Attitudes survey, 62% of respondents said they would enjoy having a job even if they did not need the money.
As mental health problems rise across our population, we need a better appreciation that since mental health and self-esteem go together, so self-esteem and knowing that your contribution to society is valued also go hand in glove. Currently, the norm is to have your contribution valued through work. It can be no accident that growing political instability and the rise of the politics of fear has happened while work has changed to be more insecure and exploitative. There are now 5 million self-employed workers, 900,000 workers on zero-hours contracts and 800,000 agency workers in the UK. Since 2008, the number of self-employed workers has grown by 24%, the number of agency workers by 46% and the number of workers on zero-hour contracts by more than 400%. This insecurity may increase with Brexit and the ending of the Social Chapter and this Parliament needs to be cognisant of future work patterns when legislating for what follows.
I welcome the Prime Minister commissioning Matthew Taylor to review modern employment practices: many of his recommendations are a step in the right direction. I also hope that our friends in the trade unions are looking at new organising models. Their critical role in providing security for those in work must now spread into new generations and into the digital economy. While insecurity hits the low-skilled hardest, the evidence also suggests that many mid-skill jobs are more likely to change than be automated completely. Tasks are likely to transform over the coming decades, with more collaboration between machines and humans, but the jobs are likely to remain. The jobs, or part-jobs, least vulnerable to automation are likely to be those which involve our most human qualities: teamwork, empathy and imagination. When advising family members about their next career, noble Lords might want to think about the arts. It is a great scandal that our current EBacc accountability system is freezing these subjects in many of our schools.
It is worth exploring whether our whole education system is fit for purpose in this changing environment. There is an honourable argument that the job of education is to make people educated, not to meet the utilitarian demands of the economy. I strongly disagree: that is a false dichotomy. What would education look like if it were to meet the future needs of the labour market? The employer demand is for higher-level cognitive skills that are cross-disciplinary and combine with excellent human skills. Employees must be agile learners, equipped with the motivation and learning skills to take new roles that currently do not exist. Surely a school curriculum must now achieve three things: a development of character that is empathetic and resilient; a sound framework of academic knowledge; and a strong set of practical, creative and learning skills. This whole-child education is vital. It is available in our best private schools but being diminished in our state-maintained schools.
Our schooling is designed around meeting the entry needs for university. For most, a bachelor’s is the route to a professional career, with some signs of an arms race towards needing a master’s—and more debt—to differentiate on the basis of academic attainment. Yet traditional graduate recruiters such as Unilever are now changing their recruitment practice to use AI and online games to sift and get a more diverse workforce. We can foresee the end of qualifications as the proxy for skills and the basis of sift by recruiters. That in itself will pull the rug from under our education system. Where will it leave the return on investment in a degree, especially given that you can now earn while you learn on a degree apprenticeship? Many forward-looking businesses are also becoming learning institutions themselves. This must be part of a revolution in adult skills that embraces work as an aspirant destination straight from school, that includes part-time degrees and unbundles the bachelor’s degree to a series of courses with credits from different establishments that then can be given an accreditation wrapper by a university. The fact that part-time degrees have fallen by 61% since 2008-09 according to the Open University, especially among working adults, should really worry us in this context.
This adult skills revolution will need a new funding scheme, and I advocate individual skills accounts. These would be an extension of the apprenticeship levy, where employers, employees and the taxpayer pay in over one’s working life to provide a source of finance for lifelong learning, both academic and vocational. I have plenty of other thoughts and no more time. Should we have a jobs offset scheme, akin to carbon offset, for responsible employers to generate investment in job creation? It could also invest in those areas of plentiful work, such as care and environmental restoration, that have no economic model to fund decent pay. Should we tax data flows rather than corporate profits? Should worker visas be easier but conditional on training a multiple of UK residents in the role? How do we incentivise an employment culture that embeds diversity of gender, race and orientation but also, critically, age?
I look forward to your Lordships’ contributions. We need to legislate, having thought deeply, for a utopian future, not sit back on our comfortable red leather and allow a dystopian one instead
Baroness Sugg (Con)
My Lords, this is a time-limited debate and the time limit for speeches today is five minutes, not six minutes as today’s list states. I remind the House that when the clock shows five minutes, the limit has been reached.
Lord Patten (Con)
My Lords, I shall have to be quick. There is nothing new in economic history in the ups and downs that we face at the moment, so we must be very careful when predicting what next and risk causing public or political alarm. So often, well-meaning research or better-meaning think tanks come up with scary predictions that fail the test of time. In the 1970s, we had the MIT-sponsored Club of Rome report The Limits to Growth, which saw us living in a limited, closed economic system likely to collapse round about now. That does not seem to have happened. Wait for it, new readers: it was going to happen because Governments would act to limit or actually stop economic growth, which is no longer a fashionable nostrum from academia. Politicians and experts must exercise great care. I like experts, particularly when they are my doctor or dentist, but it is rather easier for doctors or dentists to get things right in their diagnosis—they get them correct most of the time—than for we politicians or economists. I am not jeering at economists, but their predictive work is very much more challenging. Experts are, or should be, the servants of democracy advising, not dictating. We here in this privileged Palace must respect the democratic desires of people when shaping public policy responses, so people with lower incomes in the UK must be treated with respect. They must not be patronised; rather, they must be given more opportunities to advance, albeit with help from the living wage, benefits or whatever, to the better work to which the noble Lord referred.
I strongly believe that for adults employment at all ages, when brain and/or bodily health allows, is essential not just for economic reasons but for physical and mental well-being. Last week, the noble Lord, Lord Browne of Madingley, said in London that 70 is now the new 50. That is striking, but true. There is always up and coming angst whether geopolitical, such as about Korea, or technological, such as about the explosive growth of artificial intelligence and robotics, although I predict that we may be a little way off the creation of the first RoboPeer, to which the noble Lord, Lord Knight, referred, and we should beware of ever creating them because I am sure the first thing they would do would be to create a new class of hereditary RoboPeer.
At present new work is being helped by the unexpected long bull-market run of global stock markets producing stonking returns for workers in their pension funds, in the investment portfolios of our local authorities and into the deep, deep pockets of the Church Commissioners with all those crumbling spires to support. They are all benefiting, but just as markets go up as no one predicted, productivity stutters in the great unanswered productivity puzzle that has dogged all G7 countries since the 2008 crisis. There are lots of theories but fewer solutions to give immediate relief all round, let alone answers to questions such as why the neo-exponential explosion in higher education numbers since the 1960s has not produced productivity gains in parallel. I do not know why, and I wish someone would tell me. There are more medium-term remedies about, such as the Chancellor of the Exchequer’s infrastructure proposals, which I warmly applaud. We certainly need more investment, as he has suggested, and there may be much to be said—I pick my words very carefully and am not misspeaking here—for a holy alliance between trade unions and investors, whether institutional or retail, who feel that companies should be investing more and should stop buying back their own shares, a form of financial engineering that consumes a company’s economic smoke. It drives up its share price for sure, but equally certainly it greatly benefits the executives whose annual rewards shoot up when their share price targets are beaten. In this, combined with the increasing trend for short-termism introduced by the new quarterly targets for company performance, may well be found the seeds of future problems grown out of the current pandemic cult of short-termism in some, although not all, of our companies.
I am much more concerned about the impact of this stuff on what Matthew Taylor—I agree with the noble Lord, Lord Knight of Weymouth, about this—calls “good work” than about some new banking crisis. At the moment, our traditional joint stock investment banks are more regulated than they have ever been before and I do not think the risk of any systemic breakdown is high at the moment. There is a much greater likelihood that traditional joint stock banks, with their ageing, constantly patched, endlessly rebooted IT systems, with bits being bolted on in replatforming, are going to suffer terribly from the new cloud-based technologies and agile, starting-from-scratch new banks, like the globally dominating tech giants, the inherently scalable new worlds of Alphabet, Amazon, Microsoft and the rest. They are bringing new work to the UK in new settings, and that should be greatly welcomed.
As we struggle to explain the stutters of productivity —and if we cannot explain, then we cannot produce policies—we must all realise that the most important thing is that policy responses, whatever they are, should be enabling, not directive or dictatorial.
Lord Giddens (Lab)
My Lords, I congratulate my noble friend Lord Knight on having secured this debate, on introducing it so ably and on his mention of me. Perhaps I ought to say “Sit down at the back there and shut up”, as I used to in Cambridge. It was a very absorbing speech.
I want to discuss the impact of the digital revolution on the future of work. To me, the digital revolution is not technology; therefore I dispute the way it was described. It is technology only in the sense in which electricity is technology. As it is now everywhere, this world is driven, sort of overwhelmed, by data. We are living through a period of change perhaps as profound as the original Industrial Revolution, but which is happening far faster and is much more immediately global. When the telephone was first invented in the 19th century, it took 75 years to reach 50 million people. The first developed smartphone came to market only in 2007, and today there are 2.5 billion smartphones in the world. That is unbelievable. Each of them is far more than a phone. An iPhone 6 is something like 120 million times more powerful than the Apollo computer that sent astronauts to the moon. It is huge algorithmic power—AI, if you like—that is driving the digital revolution and which connects its other two elements, the internet and robotics.
It is very important to set this in context. Machines have been replacing humans for many years in some core sectors of industrial economies. Only just over 1% of workers in Britain are now employed in farming, which was once by far the most dominant occupation in the economy. The widespread use of robotics in manufacturing industry, which dates from about the 1960s, has had a similar effect: 40% of the UK labour force worked in manufacturing in 1950 but that proportion is now down to only 9%, a quite extraordinary statistic. It is only 8% in the United States and, whatever President Trump might say, 85% of those job losses have come from automation.
Britain today is overwhelmingly a white-collar service economy. The issue is that that economy is today in its turn being invaded and radically restructured by the digital revolution, particularly the dramatic changes and advances occurring in AI. What has happened in manufacturing could sweep through whole swathes of the rest of the economy over the next few years, so I would be much less sanguine about this than my noble friend Lord Knight. At the moment, there are high overall levels of employment, even if many jobs are unstable and part-time, especially in the so-called gig economy. What these figures mask is the retreat of work from the lifespan. I am sorry not to be able to quote a dentist; instead I have to quote a famous American economist, Jeffrey Sachs, who has provided an analysis of this. As Sachs says:
“It’s amazing to reflect that for Americans 15 years and over, the average time”,
spent in paid employment,
“each day is now just 3 hours 11 minutes”.
People in jobs,
“average 7 hours and 34 minutes, but only 42.1 percent of Americans 15 and over are at work on an average day”.
I would like to know from the Minister whether he might have comparable figures for this country. We are talking here about the retreat of work from life.
The digital revolution is already starting to transform the legal profession, accountancy, management consultancy, architecture, journalism and many other areas. Andy Haldane, the chief economist—God, I am mentioning another economist—of the Bank of England, has calculated that 15 million jobs in the UK, roughly half of all jobs, are under threat from automation as AI and robotics advance. We have to remember that this is against the backdrop of the massive retreat of manufacturing work and agriculture. Today’s smart machines are replacing not only brawn but brains, and this process is accelerating. Rather differently from what my noble friend said, we just do not know at this point how far new jobs will be created to replace them, whether there will be a sustained growth in unemployment or even whether humanity will win what has been called the “race against the machine”.
We are very much in unknown territory. As we seek to analyse the implications, we must avoid the old chestnut that following periods of innovation new jobs have always been created, and that the same must therefore happen again. Active state intervention is needed at this point to track trends and set up proactive policies for a new world that is emerging at helter-skelter pace. New thinking will be needed across the spectrum, from secondary and higher education through to healthcare and other areas of benefits, which should be restructured to follow workers, not jobs. I know I have to finish but I cannot emphasise enough that this is unknown territory, and against this backdrop I still have my reservations about the Government’s approach to higher education, where many students might be incurring huge debts for jobs that simply might not exist down the line.
Baroness Wyld (Con) (Maiden Speech)
My Lords, I am delighted to rise for the first time to speak. In the short time that I have been here, I have been deeply impressed by the expertise, authority and wisdom demonstrated by noble Lords. I am two months older than the baby of your Lordships’ House, my noble friend Lady Bertin, which I suppose makes me a toddler, at least in House of Lords terms. I know I have a steep learning curve ahead of me so I am truly grateful for the other trait that runs through your Lordships’ House: kindness. I thank the doorkeepers and attendants for their warmth and patience. I thank my supporters. My noble friend Lord Hill of Oareford was one of my earliest employers and has remained an informal mentor to me for almost two decades. My other supporter was my noble friend Lady Wheatcroft, who is a fantastic example of a woman who reached the top of her career in journalism.
I congratulate the noble Lord, Lord Knight of Weymouth, on this crucial debate, and I thank him for his welcome. Like so many others, work is at the heart of my family’s story and my own journey. I was born in Newcastle and am a proud Geordie. My paternal grandfather fought in Burma, returning to Tyneside in 1945 and finding work in the Swan Hunter shipyard. My maternal grandfather was a coal miner and a Bevan Boy, and in later years he showed the power of retraining when he took himself off to night classes, often after a long day in the pits, and trained to become a safety consultant to various companies across Tyneside. My parents met at art college in Newcastle and went on to become teachers. I owe so much to my roots and the fact that each generation of my family was ambitious for their children.
I have had a varied career, much of it spent in business and, most recently, serving the then Prime Minister David Cameron in Downing Street. I pay tribute to him for supporting me through my career, including during my pregnancy and return from maternity leave after I had my third daughter. He allowed me to show that it is possible for women to combine babies and careers, even in fast-paced environments. I had to remind myself of this as I dashed from a meeting in No. 10 in order to make my daughter’s starring role in her Monkey Music class.
When I started my career at the turn of the century, the path seemed obvious: emulate those above you, and start to climb the ladder. Then, in 2007, the year that the smartphone arrived in our lives, the person who was most in demand in the company where I was working was one of the most junior. He was a graduate trainee who had embraced the technological revolution and the rise of social media. He was suddenly the most wanted man in the building. He was swiftly promoted and put in front of chief executives and prospective clients. The old barriers had been swept away. Those of us who were in charge of the so-called juniors had to open our minds.
For new and technologically literate entrants to the labour market the pace of change can be exciting, but one person’s excitement is another’s fear. We need only to look at the tremendous advances in artificial intelligence and robotics to see that technology will soon pose a challenge to jobs in every sector. The Government must use the tools they have to ensure that the labour market can adapt as nimbly as possible to an unprecedented pace of change. Education policy must be at the heart of this, and that is where I would like to focus my remarks today.
We should be excited that today’s children have no idea what the working world will be like even in five years’ time. It means they will have to be ever more creative, resilient and rounded, so the onus is on this generation of policymakers to ensure that the national curriculum equips them to be just that. In a world where technology is king, we must not forget what it is that makes us unique as humans: our empathy, creativity and ability to collaborate. It seems to me that technology should offer a great opportunity to free many people up to do more rewarding work that improves their own lives and those of others. It should enhance our well-being as well as economic outcomes. However, the mindset that we foster in our schools will determine whether the pace of change enhances, rather than threatens, human skills.
Of course schools must embrace technology but there will not come a point where a student can declare themselves “digitally literate”, because the pace of change is too fast. So I was struck by recent research by the Prince’s Trust and HSBC that showed significant numbers of pupils, teachers and workers agreeing that schools must do more to develop students’ so-called soft skills. These include teamwork, confidence and communication. Worryingly, many of the young people interviewed said they did not feel they had the confidence that they needed to prosper in the workplace, and they said that this, rather than knowledge gaps, was what held them back. For a generation facing so many unknowns, resilience and the confidence to build relationships are some of the most precious tools that we can give them.
When I look at my own three daughters, of course I worry incessantly about their academic skills and their grasp of technology. Equally, I have lost count of the times that I say to myself, “I don’t want to bring up a trio of robots”. Whether students opt for academic or vocational subjects or indeed a combination, a common thread must run through our education system. The curriculum must be sufficiently rich and flexible to ensure that all young people develop the intellectual and emotional skills to continue to learn for life.
Lord Sherbourne of Didsbury (Con)
My Lords, it is a real pleasure to follow the maiden speech of my noble friend Lady Wyld. I congratulate her on a really excellent speech. It gave us insight into the path that has brought her to your Lordships’ House, her strong family background in north-east England, her involvement with business and her political experience at the heart of government. I know that she is involved with various organisations, not only in the business world but much more widely—for example, she is a trustee of the Urology Foundation, where she advises people on what are often very sensitive issues, and she has trained as a Samaritan. I know she will be making contributions in this Chamber on the issue of mental health, which my right honourable friend the Prime Minister has rightly made a high priority. We can look forward to her contributions. She will be a very valuable Member of your Lordships’ House and I welcome her to it.
Of all the speakers who came to our annual speech day at my grammar school way back in the 1960s, I can remember only one. I do not know who the person was, but he made one remark that I will always remember. He told us that, more important than all our qualifications, our GCEs and degrees, the one attribute that we would need more than anything else in the world that we were to enter was adaptability. That is why I congratulate the noble Lord, Lord Knight of Weymouth, on introducing this debate, because it challenges us to look at the changes—technological, demographic and global—which are already transforming all our lives, and will do so even more in future.
Many of these developments will take us by surprise, but we can be certain of some things. There will be growing interdependence and integration between economies across the globe. In Britain, we will continue to face ever-keener competition from the great emerging economies. Our lives will become ever more digital, and automation and artificial intelligence will take over more and more. They will not only do jobs that people currently do; they will also create wholly new activities and opportunities not even dreamt of.
There will also be other certainties. People will be living longer, there will be a larger percentage of people in retirement and they will have to be supported by a workforce which is a smaller proportion of the population. There will be pressure to provide pensions and an ever-increasing need for care for the elderly. There will be amazing medical breakthroughs. That is wonderful, but it will require more resources—both financial and human—to go into healthcare.
Those are enormous challenges, but I am optimistic because although technology will take jobs from humans, it will also create jobs for humans. To give just a few examples, websites have to be designed and platforms need quality control. Google is said to have an army of 10,000 raters who monitor videos and test new services. Facebook has announced that it will almost double the number of its moderators. Of course, this will grow much more as Governments everywhere rightly demand ever more content moderation. According to the World Bank, more than 5 million people already offer to work remotely on online marketplaces. Queries received on websites can often be handled by algorithms, but not always. Questions with no simple answer have to be routed through humans and, of course, humans will still be needed to train algorithms.
Nevertheless, technology, artificial intelligence and automation will release thousands of people from their current jobs. This will be happening just when the ageing population and medical advances are creating greater and greater demand for better healthcare and social care. My main point this afternoon is this. The greatest challenge we face is how we train those people whose jobs are being taken over by technology for the health service and social services, where they will be increasingly desperately needed.
Baroness Bakewell (Lab)
My Lords, I congratulate the noble Baroness, Lady Wyld, on her speech and welcome her to the Chamber. Unfortunately, as far as I am concerned, she is sitting on the wrong side of it but, as far as I am concerned, she is the right gender. My welcome to you.
I sit on the Artificial Intelligence Committee of this House, and we have already had several meetings and more than 200 submissions, so what I say draws on that experience. Yesterday, the BBC’s technology correspondent, Rory Cellan-Jones, told us about the cycle of hype and warned us that AI is currently enjoying a huge hype. It is very much in the news generally. Only yesterday, Matthew d’Ancona, writing in the Standard, said that we have machines that can compose Bach, produce art and compose poems. Well, do we? Next week, there is a discussion at Portcullis House: “Will Robots Take Your Job?”. Will they? Many questions are opening up and the “popularity”—I put that in inverted commas—of AI as a subject for journalists, programmes and investigation indicates an anxiety. One or two people suggested at our meeting yesterday that the anxiety was because automation was threatening middle-class jobs, and the middle class was more likely to be vocal about the issue. Perhaps that is a point. There is an indication that robotics and automation will enter the legal profession and make easy the incredibly extensive search routines that have to go on in law firms. So yes, slowly, without the hype, AI will be depriving a lot of people of their jobs.
I want to put two things to the Minister, some of which has already been mentioned by my colleagues. Healthcare will be one of the major needs of the future and there needs to be a revolution in our attitude towards it. Healthcare and the caring professions need to be elevated into a serious career option. There should be a higher status for them in our society. Students in schools should be offered by career guidance the prospect of a career in care. You will not be out of work if you take up a career in care. On the other hand, caring has a very low status, is very badly paid, has a high turnover and job satisfaction is often low, because the circumstances in which people operate are of huge pressure. However, I have had the huge pleasure of presiding at carers’ awards ceremonies. People have come up to me afterwards and said, “I am a carer. I absolutely love my job”. That is the key to the jobs we want for the future: jobs that people can love doing, that they can enjoy doing, that offer empathy with fellow human beings rather than the monotony and depression of routine jobs. That is my first question to the Minister.
My other concern is related to it, because it is about the ageing population. The retirement age is being extended but, for many people, it is ceasing to exist. People do not want to retire. They are under financial pressure to continue to work; their temperaments and health are such that they have energy to expend; and they want to continue working. What provision is being made for that? There needs to be a new structuring of work patterns that offers part-time work, reasonable rotas and different hours so that people over 60, or people over 70, can go on working and contributing without it being a strain on what they hoped would be a reassuring retirement. Attached to that is a strategy for continuum, lifelong learning, so that people who might retire at 50 with certain skills can return to study and take a degree in another set of skills which they can then use for the next 30 years. I speak as the president of Birkbeck, where of course we train people who are in jobs to have second careers. This is enormously important. It is proving very difficult to get the message out that part-time learning is worth doing and is available—it is difficult to get grants, and loans are tricky. We need a major rethink about this country embarking on a huge lifelong learning strategy not for a few early retirees but for its entire population.
Lord Rees of Ludlow (CB)
My Lords, the big social and economic question is: will this new machine age be like earlier disruptive technologies, or is it really different this time in terms of job creation? Machines will take over more and more of the work entailed in manufacturing and retail distribution. Moreover, AI can take over many white-collar jobs: routine legal work, routine accountancy, medical diagnostics, even surgery. Through their ability to handle immense data streams, computers can control traffic flows, the electric grid and such-like far better than humans, which is an unambiguous benefit. In contrast, some skilled service jobs, such as plumbing and gardening, will be among the hardest to automate, and it may be a long time before truck and taxi drivers are redundant. As a parallel, think of civil aviation. Most flying is on autopilot; a real pilot is needed only to cope with emergencies. But because the pilots are passive and superfluous for 99% of the time, they do not acquire the experience—the thousands of hours of being really at the controls—which the earlier generation of pilots had. There will be analogous problems with the transition to driverless lorries, which I guess will be accepted by the public only in controlled environments—in limited city-centre areas where they have the roads to themselves—or maybe on motorways. Robotic interaction with the real world is still clumsy. Robots can play great chess, but they cannot move pieces on a real chessboard as adeptly as a child. They cannot tie your shoelaces, but sensor technology, speech recognition and so forth are advancing apace. So we do, indeed, need new jobs.
The digital revolution generates huge wealth for an elite, but preserving a healthy society will require redistribution of that wealth. There is talk of using that money to provide a universal income, but the snags of implementing that are well known, and the societal disadvantages are severe. It would surely be far better to use that wealth to foster redeployment of labour into real, socially valuable jobs where the human element is crucial, and where there is already a huge unmet demand—above all, carers for the old.
It is true that robots can take over routine aspects of care. At present, wealthy people are the only ones who have the choice, and they want personal carers not automata. I think everyone in their old age would like to be cared for by a real person.
Another topical example is the predicament of lonely, elderly or disabled people expected to access the benefits system online. Think of the anxiety and frustration when something goes wrong. Such people will have peace of mind only if there are enough computer-savvy carers to ensure that they are not disadvantaged. A humane society should vastly enhance the number and status of those who carry out these caring roles, and there are other jobs that would make our lives better and provide worthwhile employment—gardeners in public parks, custodians, and so forth. To what extent can that be achieved consistent with the current mantra of austerity and the small state?
We should also promote a resurgence of crafts of all kinds and enhance the esteem of those who excel at them. We have seen the emergence of celebrity chefs, and we will see more esteem for talented exponents of other crafts. Again, if we see the choices made by the wealthy, who have the most freedom, we find that they spend money on labour-intensive artefacts or activities to provide employment. The touchstone for a progressive Government should surely be to provide for everyone the kind of life and work that the better-off choose to have.
Other speakers have highlighted the corrosive effects of inequality in this country, but inequality between countries will lead to growing embitterment and instability, because those in poor countries are now, via IT and the media, far more aware of what they are missing. Moreover, if robotics makes it economic for wealthy countries to reshore manufacturing to within their own borders, the developmental boost that countries in the Far East receive from lower manufacturing costs will no longer be available to countries in the Middle East and Africa, which would be a severe challenge for international relations and the control of migration.
Finally, I echo the noble Baroness, Lady Bakewell, in emphasising the importance of coping with these changes, which is linked to another need—enhanced provision for lifelong learning.
Baroness Morris of Yardley (Lab)
First, I congratulate my noble friend Lord Knight on bringing this debate to the House. He is a leading thinker in this area, which was reflected in his opening remarks. I am always grateful to him for the thinking that he does in our shared area of interest of education. I shall return to that later. I also congratulate and welcome the noble Baroness, Lady Wyld. It was a lovely speech, and I very much enjoyed it, with its mix of wisdom and common sense, which is relatively rare. We look forward to hearing more of that in future and hope you enjoy your time here.
We are not the first generation of people in this House to talk about a revolution in terms of workplace and jobs, but I accept the argument that what we are in the midst of now is probably different from many previous such revolutions, partly because it is more complicated and coming about more quickly, partly because we cannot foresee the future, and partly because it is wrapped up with a series of other changes, such as globalisation, changes in communication, political uncertainty and changes to the environment, which makes it all very different from the technological revolution, which was a hallmark of my early days at work. There is no doubt that part of our population is excited by the changes, but it just makes others feel less secure—and we have witnessed the consequences of that. For myself, I experience both those thoughts at different times, depending on what it is and how I feel.
We can learn lessons from previous workplace revolutions—and I wanted to mention some of those. Too often, we talk about policy as it should serve the economy and jobs, but in this revolution we have to learn from previous mistakes. The policy has to serve individuals, too. While we talk about change in the workplace and employment, every previous workplace revolution has affected individuals’ lives. It has affected how they see themselves and their family and community; it has often caused greater differences in wealth and opportunities in our society. Public policy tends to chase up and mitigate those disadvantages decades after policy changes have brought them about. My first plea is to look at the impact on the individual as well as on the economy in looking at this revolution.
I wanted to pick out education and training as an area to comment on. In describing the education scene that we think will deliver for the world that we are getting into—and my noble friend Lord Knight did that, so I shall not repeat it—as much as I am an admirer of our schools, universities and colleges, I cannot hand on heart say that it is fit for purpose. I share my noble friend’s view on this. Our education system has always served the economy and society well when it has been a gatekeeper. When it has kept people out and only allowed a few in, it has always done that very well—but when it is invited to be a gate opener and let lots of people through, it is less sure of how to do that. Comprehensive schools serve the economy less well in some ways than the old grammar schools did for the economy that they served. We still have differences in ability and attainment. The biggest difficulty that colleges went through was when they moved from high-qualification courses to having to include courses for people who were unemployed. As for universities, they seem to be in some sort of crisis now, which has coincided with the 50% target and having to be less selective and more open. That is a problem, because if we do not have a school and education system that can effectively serve the economy and serve individuals well, at a time when it has to be a gate opener and keeper, we have a problem. I am not sure what the answer is, but part of the issue is that, at schools, we have a system that treasures top-down change and we are good at measuring progress on a narrow range of subjects at fixed points. I sometimes feel that with our school system we are really good at training people to pass and getting people qualifications to do a job, but we have become far less tolerant of the rebel and the person who does not fit in and far less able to be flexible about somebody who wants to work outside the formal structures.
When I was a teacher, we used to say that they were a pain in the back but really streetwise and would do well. I just have a feeling that that sort of person might have exactly the skill set and attitude needed to flourish in a digital world. I have often thought that what an education system needs to do in a digital economy is to use skills, place and people in a different way. Apart from the Open University, I cannot cite many educational institutions that have managed to do that over the decades of my life. My contribution, in inviting comments from the Minister, is to ask: what can we do to bring about that change in education? That will help us to serve both the economy and individuals in the revolution in which we find ourselves.
Baroness Wheatcroft (Con)
My Lords, I congratulate the noble Lord, Lord Knight of Weymouth, on securing this debate and opening it with such insights. There have been some excellent and wide-ranging speeches and, in particular, I congratulate my noble friend Lady Wyld on such a perceptive maiden speech. She is clearly going to be a great asset to the House.
We have heard about globalisation and its effect on jobs, but globalisation should be a force for good—a process by which the world is becoming increasingly interconnected, as a result of massively increased world trade and cultural exchange. Sadly, too often, it is not perceived that way, but seen as a negative and not working for the benefit of populations. This is not new. It is more than a decade since Samuel P Huntington, the American economist, coined the term “Davos Man”. This was meant as a critical term, symbolising those people who congregate in the ski resort every year to discuss what is wrong with the world and how they can put it right. Davos Man was the embodiment of the global elite.
More recently, David Goodhart, in his book, The Road to Somewhere, has drawn a different version of the global elite. He termed them the “Anywheres”, as opposed to the “Somewheres”. The Anywheres were the citizens of the world who made a lot of money at the expense of the Somewheres, people who were rooted in their community and suffering as a result of globalisation. This view permeates deep into the political world, of course. A senior politician quite recently said that if you were a citizen of the world, you were a citizen of nowhere; you did not even understand the concept of citizenship. If you were a citizen of the world, you were a rampant individualist with no care for anyone but yourself. Sadly, some people have given citizens of the world a bad reputation.
Nevertheless, I believe it is possible to be both a citizen of the world and a patriot, and that we need people with that global view to benefit our workforce generally and, more particularly, the workforces in countries that, for a very long time, have suffered. Global trade has been a force for good in many parts of the world and will continue to be so. It would be a great shame if our Government or others in the western world decided that, for the benefit of their own workforces—some of whom have undoubtedly suffered—they would close their doors and let the wider world suffer. We need to see global trade continuing. We also need to see the benefits being spread more fairly. Some changes in the global tax system, which I think now have some momentum behind them, may well bring that about.
Yesterday, the UN had a day’s major discussion on “The Future of Everything”—a broad subject. Sophia, a humanoid robot, was centre-stage, and the UN Deputy Secretary-General asked her what the UN could do to help people in many parts of the world who have no access to the internet or electricity. Sophia, very perceptively, said that:
“The future is already here. It’s just not very evenly distributed”.
It needs to be.
Sophia’s well-informed response takes me to another area that people have been talking about today: technological change and, in particular, the future of work when artificial intelligence has such an impact. It will take over jobs. This may well be the first technological revolution that will not create jobs but destroy them. That is not a bad thing if it continues to create wealth. In the field of cybersecurity, for instance, artificial intelligence will be a great force for improvement. But it does mean that there will be people who will have to change the jobs that they do—perhaps many times, as the noble Baroness, Lady Bakewell, said. There will be a need for people to be adaptable and, as we have heard, to have soft skills.
One thing I find most rewarding about being in this House is the Lord Speaker’s programme, Peers in Schools. It is generally very uplifting to go into schools, but not always. At a fairly modern free school that I went to quite recently, the head teacher is striving hard and believes that he can get his pupils through their exams and to university if they want. His main concern was that they had no emotional intelligence, because they had no meaningful relationships with adults. Even more recently, I went to a school in Kent, where I learned that a neighbouring school with 1,000 pupils has more than 250 open child protection cases. If we are bringing up children in that sort of environment, they will not be fit for any workplace. There has to be change right at the bottom, in families and communities.
Lord Young of Norwood Green (Lab)
My Lords, I, too, congratulate my noble friend Lord Knight on ensuring a debate on this vital issue and on his tour de force contribution. I thank the Library for producing its usual high-quality briefing. I congratulate the noble Baroness, Lady Wyld, on her contribution. However, I make one small correction, which extends also to the noble Baroness, Lady Wheatcroft. I am campaigning for people not to refer to skills as “soft” but rather as essential. I encourage the noble Baroness, Lady Wyld, not to worry about her children as they have the biggest advantage of all in having a supportive, caring and stable family. My experience as a school governor of a primary school tells me that children who have that benefit will undoubtedly succeed in life.
Given the time limit, I shall focus on a few issues. However, I make the general comment that there are differing views on the future of work, with some forecasters saying that there has been a doomsday analysis many times in the past and yet the overall number of jobs has continued to grow in industries whose existence we could not have predicted—what I call the Panglossian view that everything happens for the best in this best of all possible worlds. However, even if you take the more pessimistic view evinced by my noble friend Lord Giddens, one thing is certain—namely, that the world of work continues to change, and at a faster rate, as he rightly said.
Demographic change presents another challenge in developed countries: as the birth rate falls it is counterbalanced by the increase in longevity, which means that people either choose to work longer because they find that it gives meaning to their lives or because the economic circumstances, including the raising of retirement ages, require them to remain in the world of work. We still tend to look at work as a continuum whereby we finish full-time education and, if we are lucky, enter the world of work until retirement, unless parenthood, caring responsibilities or redundancy disturb that continuum. We still practise what I describe as cliff-edge retirement at the end of employees’ careers. Surely it is time that we encouraged a phased approach to retirement, as other noble Lords have said, including my noble friend Lady Bakewell, which enables the transfer of valuable skills and experience to the next generation. Can the Minister tell the House what policies the Government have, or intend to develop, to encourage phased retirement?
The report gives many examples of the need to ensure that young people and those retraining are equipped with the necessary IT skills clearly essential in the 21st century. I could not help smiling when I heard my noble friend Lord Giddens refer to the existence of 2.4 billion smartphones. There probably are but I can tell noble Lords one thing: there are not 2.4 billion smart users, including me.
I want to focus on a sector that has already been referred to, where employment opportunities continue to rise, as many people have said. Regrettably, work in the care sector has a reputation for low pay and low skills, yet we all know that the need, given increased longevity, is exponential, as a number of noble Lords have said. There is a vital need for action to be taken to ensure that we enhance the reputation of work in the care sector, encouraging people to see this as a worthwhile career. After all, this is an issue where we all have a vested interest. Different models of employment in this sector are urgently needed, encouraging co-operatives and the not-for-profit models where workers share in the success of the care home and develop a long-term interest. The current model is not working, with thousands of care homes closing and horrendous examples of abuse exposed by individuals and the Care Quality Commission. Whatever robots may be developed, I doubt that we will develop empathetic ones.
Whichever view you take on the future of work, I agree with my noble friend Lord Giddens and others that we cannot afford to be complacent. We have to equip young people, and the not so young, with genuinely transferrable skills. There is a huge debate to be had on where we deploy our education resources. We spend billions of pounds on education but there still seems to be a divide between vocational and academic education, when we know that such a strict divide does not exist and that that is not what the skills requirement suggests that we need. We need to be more supportive of creative skills and recognise their huge potential in the work sphere.
I am nearing the end of my contribution and will focus on just one other thing. Noble Lords have talked about the redistribution of wealth and the noble Baroness, Lady Wheatcroft, rightly referred to a new global tax system. Workers’ rights in a gig economy have been referred to and the Taylor report focused on the importance of that. Our economy is still too London-centric. The devolution of power has a role to play in this regard, not just through a northern powerhouse but in all the regions of the United Kingdom. We used to think in the trade union movement that one thing would be the answer to all our problems, but I have not heard it mentioned today—namely, the theory that with increased automation we might have a shorter working week. We can dream, can’t we?
Lord Haskel (Lab)
My Lords, I congratulate my noble friend on introducing this debate. We have debated this topic for some years. Many of us will remember the debates we had on how we would use all the leisure time that new technology would create. However, the conclusion we have to come to is that its effect has not been uniformly beneficial. Some of us have benefited but it has also helped create working poverty. Many of the 8.3 million people who, according to the Money Advice Service, have problem debts are in work. Yes, there is nearly full employment but it has not been reflected in our standard of living. All this adds up to a lot of discontent and alienation, and before we start to benefit this has to be put right.
Those of us who have managed people learn pretty quickly that people who have a stake in an organisation—who are valued—tend to protect that organisation. If they do not, they unconsciously want to destroy it. Allowing a small group of people to acquire huge rewards from globalisation and technology while others are left in hardship is asking for trouble. My noble friend made this point.
What to do? First and foremost, you have to give people back their rights at work. The flexible labour market has served its purpose and in these new circumstances it is not benefiting people. Quite simply, the way to do this is to change the system of tax credits and housing benefit which facilitates low pay and discourages investment in people and replace it with higher pay—higher pay through higher productivity, as the noble Lord, Lord Patten, said. Most studies show that productivity is raised with the skills and training that all noble Lords have been calling for in these new circumstances.
The Government are trying but it is not working. The Minister may point to their industrial strategy, which may have some good economics but does not coincide with people’s concept of a fairer workplace. This is because many people at work now see themselves as victims of the disruptive force of technological change. The Government have to champion the argument that this change in the workplace carries a cost to society as well as benefiting corporations.
It is important to understand the nature of investment in these new circumstances. These changes mean that there will be yet more investment in so-called intangible assets: skills and knowledge; design and branding; research and development; and software and artificial intelligence. Indeed, some figures indicate that already more is spent on these hidden investments than on tangible assets such as machinery, buildings and computers. The accounts just do not show this. This applies to manufacturing businesses just as much as service businesses, as Sir Charles Bean pointed out in his report. The point is that this kind of intangible investment is far more scalable than traditional tangible investment. With this kind of investment, we are moving towards a world of “capitalism without capital”, to borrow the title of a forthcoming book which explains all of this.
As a result, the Government will have to play a much bigger role in stimulating and participating in this investment—state intervention, as my noble friend Lord Giddens said—as well as continuing their role in investing in research, training, skills and education; otherwise, inequality and disappointing productivity will continue. The Government have to do a lot better at convincing people that this investment will contribute towards goals that citizens value rather than goals valued purely for science, education or economics.
In spite of the benefits of globalisation and technology, many of us feel that we have lost a sense of direction. We are working hard but getting nowhere. There are plenty of jobs but no money. This is why many feel that the system is rigged against them at their place of work. Without addressing this, we will not enjoy the benefits of globalisation, technology and demography. If this Government cannot get their act together and make the changes, there is another waiting in the wings who will.
Lord Hunt of Chesterton (Lab)
My Lords, we should be grateful to the noble Lord, Lord Knight, for introducing this important debate. I welcome the noble Baroness, Lady Wyld.
I have seen in my own career, as an engineer and mathematician in research and consulting and as director of the Met Office and of a high-tech company, many applications and new ideas arising from computers, technology and systems. I was impressed by the possibilities when I was a student and a Labour activist. I remember listening to Leon Bagrit’s Reith Lectures in 1963. However, when I attended the Labour Party conference in 1970, I was also interested in a vigorous debate about whether people needed telephones.
At that time in the UK we were absolutely in the dark about the extraordinary subterranean knowledge that had been developed in this country during the war. The great developments in data and mathematics led by Alan Turing did not really come to light until the late 1990s. By contrast, the United States was considerably more open with von Neumann’s work. As we have seen this week, government and industry have begun to understand Lorenz’s discovery that most electronic calculations contain small errors that can lead to chaotic predictions. Eventually, just last year the fundamental wartime contributions of Alan Turing and other computer mathematicians led to the establishment of the multi-university Alan Turing Institute, embedded within the British Library.
In fact, from the 1950s onwards, there were some applications of computers in business. One of the interesting ones even beat Amazon to it. Freeman’s mail order company—my godfather was a director—was well known in all the valleys, and it introduced the KDF9 computer to distribute its goods. It is a pity that that, like other technologies, it did not make the global level. Sometimes the commercial application of computation moved much faster than the scientific calculation. Noble Lords may not know that in the early 1950s, Joe Lyons, which used to distribute Swiss rolls and stuff for the tea shops around London, was so advanced that the Met Office used to send people from Dunstable down to Hammersmith to learn how to do it.
Around 1990, of course, Tim Berners-Lee invented the internet system at the European nuclear centre in Geneva, which led to the local and international multiusers data exchange—the internet. This has rapidly evolved to the exchange of millions of users and social media. Businesses sprang up and extended the logic database to much broader ideas now, as other noble Lords have said, including art, design, media and music.
On Saturdays in London I have seen children using laptops to compose stories, pictures and sound with digital and non-digital means, which gives them extraordinary excitement and interest. It is also very different from so-called digital skills, which is a rather restrictive term. These developments are turning into advanced jobs, like those I saw this week in Didcot, which are producing electronic media illustrations for complex science, engineering and medicine. This enables research workers to communicate with business and to learn about business, and sometimes students start their own businesses. As the House of Lords committee heard, more could be done by universities to stimulate this type of business growth.
In the poorest regions of the world, individuals or small groups now make use of electronic means, as I have seen in India, where I saw people communicating informally as they pick up sticks for fuel and waste, while on the other hand they are also making use of the most advanced knowledge of climate change for their agriculture or, for example, using their mobile phones to see the dangers associated with fishing and tropical cyclones. So these are extraordinary new developments, with new jobs.
However, given these developments in electronic information, how can people make best use of them? In the parliamentary debate on 7 September, the noble Baroness, Lady Lane-Fox, and other noble Lords emphasised that people in a modern society should be able to use electronic digital information and called on the Government to expand this. I just want to emphasise that a great deal of these skills have nothing to do with digital aspects but are to do with screen-based methods of simply looking at pictures and pushing your fingers across the screen, and lead to completely new kinds of activity and skills. This was loosely described as “digital skills”, but, as I say, it should be broader than that.
There is general agreement, then, that training in digital skills and these wider skills is urgently needed for access to many public services, and for information as well as for jobs. Training needs to be done by public bodies, such as local libraries and jobcentres, and private organisations, which can be more focused. I hope that the Minister will tell us about UK progress in public and private training.
However, the Government should also be looking forward to a new future, in which much of the usage of electronic information, communication and creativity will have very little to do with the digital aspect. For example, I look forward to the idea of talking to a robot about my bank account. At the moment, I like to talk to a person, but I suspect that that is rather expensive. There are many aspects of the use of these electronic communication systems that will change people’s lives, and indeed will enable these to be used by people who are simply not able to use the digital facilities.
Finally, these skills are important, but we also need to teach people about scepticism and caution with regard to scams and other things. As Lorenz pointed out, there are often errors associated with difficult calculations.
Baroness Stowell of Beeston (Con)
My Lords, I am grateful for the opportunity to speak briefly in the gap. I was very impressed by the opening speech from the noble Lord, Lord Knight, and the debate that he has called, and felt moved to speak briefly at the end to make a couple of points.
It always strikes me that those of us who come up with solutions to complex problems are often accused of being the people who do not have to change as a result of these solutions. I do not think we should ever stop thinking about why other people are not convinced by the solutions that we put forward and about what we need to do differently to bring more people with us, particularly in this era when we face so much change.
I do not subscribe to the view, although I often hear it said, that the reason that people do not like complex solutions to complex problems is because they want only simple answers and simple solutions and are not prepared to accept something that they cannot understand. People are not really looking for simple solutions—they are smart enough to know that complex problems require complexity—but they are looking for the people who come up with the solutions, such as us, to share with them some similarity in terms of our behaviour. They want to see in us shared motives and something that is common to us all. As we look at all of these different and very difficult issues, we need to understand that when people are looking at whether to accept what we are coming forward with and to believe us, they are looking at our behaviours and the way in which we are willing to change ourselves.
I have been very heartened by a lot of what has been said about recognising the talent and contributions of so many people across our society. One of the things that I will never tire of reminding myself, and everybody else, is that not all educated people are clever and not all clever people are educated. When we talk or think about AI and all of these different things that we face, we should remember there are a lot of talented people out there who could make a massive contribution. If we give them the opportunity, they will embrace this change. We can then achieve more and enjoy it better in a shared quest for a better future for ourselves.
Lord Fox (LD)
My Lords, I join this House in congratulating the noble Baroness, Lady Wyld, on her accomplished maiden speech and welcome her to the House. This Motion identifies forces that will undoubtedly shape both the quantum and the nature of future work in this country. These forces are already moving swiftly in our society—it is not something that is over the horizon, but is already with us. As a country we have to invest political energy in working out how we are going to embrace these forces and how we will succeed in this challenging environment. As such, the noble Lord, Lord Knight, should be congratulated on securing this debate.
I will speak briefly on globalisation and demographics before turning to technology and skills. As your Lordships might expect me to say, Brexit is an explicit rejection of the multilateral approach that has driven globalisation. Brexit is not, as it is sometimes portrayed, a move to embrace global markets, it is setting ourselves against a trend of integrated global economic systems. This may or may not have been the intention of the referendum electorate—it may have been an accident—but either way, globalisation in one form or another will continue. What this means in practice, as other Peers have mentioned, is a march eastwards. There are lots of stats for this, but I will use the IPPR’s rather than others. It says that in 2030, emerging economies will account for almost half of global output, up from around a quarter, as we have today. That means that 17 of the top 50 global cities by GDP will be in China—more than North America and four times more than Europe. This global tide is moving rapidly and, by exiting the European Union, we will be setting sail in a dinghy.
I turn to demographics and this time will use the Government Office for Science report of 2016. The proportion of the working-age population between 50 and the state pension age will increase from 26% in 2012 to 35% in 2050—that is, by about 8 million people. The productivity and economic success of this country will therefore increasingly be tied to older people. As the noble Baroness, Lady Bakewell, eloquently pointed out, there is an opportunity for those people to take up training and a need for them to do so, but at the moment it is not happening. Forty per cent of 55 to 64 year-olds have undertaken no formal training or education since leaving school. Therefore, we have to find a way of empowering older workers to receive training or retraining and take advantage of the flexibility that that will offer, as many wise noble Lords have said.
One group that has not been touched on but is a great source of talent that we are not using successfully in this country is disabled people. We have to find ways of welcoming them, with their creativity and experiences, into the workforce, because we are missing out extensively on a large element of talent.
Therefore, we have a pool of people who are getting older and whom we need to train more, and of course all that is massively exacerbated by the ending of free movement of people from the EU. Your Lordships will be pleased to know that that is the last time I will mention Brexit.
Next, I come to technology. As we have heard, there is a wide body of reportage and study all pointing to huge changes in the workplace. Talk of hype is true. I have seen artificial intelligence hyped twice before, and the difference appears to be machine learning and the ability to get machines to do things without having to program them—that is, they teach themselves. Whether you call it the digital revolution or Industry 4.0, it is on us now—it is happening. For example, in 2013—a while ago—Oxford University predicted that 35% of UK roles would either be made obsolete by new technologies within 20 years or change completely. Subsequent reports have increased that percentage.
I am somewhat perturbed by the briefing from retail businesses that talks about automation in the retail area. I fear that “confused Peer in the bagging area” is a very likely scenario in my case. According to an RSA and YouGov survey, business leaders on average believe that 15% of jobs in their organisations could be automated in the next 10 years.
However, for many, that change is already happening. Yesterday, I was in a factory where a cobot is about to be installed. A cobot is a collaborative robot. Most robots are in cages for safety purposes, whereas cobots can work among people. They are co-operative, collaborative robots, and that is the big change. The cobot in this case cost less than £100,000. Ultimately, it will replace the work of two to three people who are currently paid about £40,000 per year. It will therefore pay for itself in less than a year. The noble Lord, Lord Rees, pointed out that there is yet more automation to come in manufacturing. He is right, and it is happening. However, the noble Lord, Lord Giddens, said that the big source of change will be in the service sector. Clearly, that is where jobs will be threatened and where change is already coming.
Yet the same RSA survey also says that the adoption rate of artificial intelligence or robotics is low among UK business leaders. Just 14% have already invested in AI or robotics, or plan to do so in the near future. However, we should note that the world leader in installing robots is China—the tide is moving that way. These forces are very strong and our responses could perhaps be described as weak. We are stepping back from embracing the real challenge of globalisation, our workforce is ageing and skills are retiring with people. We need to find ways of energising and giving flexibility to that workforce. Technology is coming but UK levels of investment are falling behind international competition.
The exam question set to us today was: how will public policy respond to this? Very briefly, the industrial strategy is supposed to be that policy, and so I ask the Minister when we might expect to see it before us. I take advantage of having him here to say that there should be an explicit government skills strategy that embraces this. There is a whole number of things I suggest should be included in that strategy, not the least of which is that the delivery of basic skills will remain a priority. We need teachers and investment in our schools, and we need to make sure that we imbue our children with the basic skills that they need.
The noble Lords, Lord Rees and Lord Sherbourne, and the noble Baroness, Lady Bakewell, talked about the need to create new sorts of worthwhile work. The T-levels could be one opportunity by which to do that. I hope the Minister can give us some guidance on that. However, we on these Benches are concerned that the T-levels may be too narrow and focused on tasks rather than skills. One element of the T-levels is that we are enabling people to do technical jobs. We do not necessarily know what those are yet, but the skills need to be there and to be held in the same parity of esteem that academic skills currently are. Anything the Minister can say to encourage us on that would be helpful.
The fall in adult education must be halted. It is not just that adult education is below par, it is actually reducing. We need to find a way of arresting that decline. The implementation of lifelong learning accounts is one way of encouraging people to understand that they have an account they can spend throughout their life. I am interested to hear from the Minister how the Government are planning to arrest and reverse that decline.
Finally, we need new employment models. The noble Lord, Lord Knight, spoke of job insecurity, and he is correct. People are in work but they are not necessarily secure in their work. They are working in the gig economy already and have seen what it is like. The UK framework of employment rights, regulations and protections has been built up over decades but is failing this kind of employment model and is unfit for purpose. We need a review of those laws and the enforcement of whatever comes up. It is time for change, and the Taylor report eloquently pointed to that change. I would welcome the Minister’s comments on that.
In conclusion, this is a big subject and there is much to be done. I fear that the energy of politics may be being drained by other issues—which I promise not to mention again. However, it is up to us to keep the Government’s eyes on this issue so that the possible utopian future set out by the noble Lord, Lord Knight, overrides the Götterdämmerung of his daughter and perhaps the noble Lord, Lord Giddens.
Baroness Prosser (Lab)
My Lords, I join others in congratulating the noble Baroness, Lady Wyld, on her very thoughtful maiden speech, and welcome her to our Chamber. I also thank my noble friend Lord Knight of Weymouth for securing this debate and getting it on today’s agenda.
Contributions from around the Floor have opened up a number of areas for further thought and consideration. Globalisation, technological advance and democratic shifts have been with us for many a long year. The mass movement of manufacturing capacity from the UK to mainly the southern and eastern parts of the world was with us in full swing in the 1970s and 1980s. The international trade union movement watched closely as various countries welcomed new investment, only to see those companies flit onwards to the next cheapest option somewhere else around the globe. The popularity of chasing the cheapest dollar has always been with us. But while profit and even riches might accrue to some in society, the negative impact—job loss and dislocation for many—is felt by the now surplus individuals and of course by society at large.
An early example of how not to deal with the disruption caused by globalisation would be the issues caused by the closure of deep mining in Britain. Cheaper coal from eastern Europe may have been inevitable, but what about the long run? Underground mining is not the healthiest of occupations, but the impact of job losses on whole communities was vast. There was no real government intervention save for some half-baked training schemes for non-existent or inaccessible jobs, which left the impression that the Government did not recognise that they might have some responsibility for the consequences of their decision to save the country money on its coal bill.
The lack of intervention has cost the country dear in the long run. Continuing lack of investment in the infrastructure of many of the rural areas affected has allowed for intergenerational unemployment and disaffected communities. Those kinds of consequential issues will be writ large when it comes to dealing with the effects of the robotic era. While the thought of a world of robots can be quite scary, overall the growth and development of new technologies has had a very positive affect on society. Medical advance, communications, access to knowledge and the elimination of many dirty and dangerous jobs must sit on the positive side of the ledger. However, many jobs that were neither dirty nor dangerous have also been eliminated. Walk round any factory these days and ne’er a person can be seen. These were jobs with decent pay and conditions and which often provided good opportunities for advance. So these developments bring change that is often difficult and challenging. The retail sector, for example, has had to adapt to deal with the impact of internet shopping bringing about a loss of traditional jobs but needing more and different skills to deal with the changed demands of the future.
Technology has brought us the gig economy: business models based on immediate communication between the hub and the worker, with workers being prepared to work as and when required. Evidence shows that many of those working in this way like the idea that they can work and also engage in other activities. It suits some people’s lifestyles. Nobody should think that the gig economy is a temporary blip on the employment scene. It is here to stay. Uber might be having a problem at the moment, but it will be back—and it is up to the Government and/or TfL to ensure that the service is regulated in such a way that the availability of this technology-based transport service is a benefit and not a danger to London and Londoners. The number of black taxis licensed at any one time is limited by Transport for London and a limit on the numbers of private hire vehicles on our streets would also be a good thing. The environment needs protecting, as well as the health of the public.
Whether we are talking about couriers delivering goods and services or the licensed cab trade, regulation must be built in to protect the workforce from exploitation: for example, by providing sick pay, accident insurance and a guaranteed living wage. These companies make a lot of money and pay as little tax as they can get away with, so the least the Government should do is to ensure that the benefits of the operation are more fairly shared.
As well as work itself changing, the available workforce is changing also. People are living longer and wanting to work into their later years—plus we have a general reduction in the percentage of 0 to 15 year-olds. That is a perfect storm if no action is taken to enable the older workforce to retrain into meaningful work. Money saved by leaving people to their own devices is money lost on subsidising older people who have not been equipped to participate in a changing employment arena. The state seems ill prepared to accommodate or encourage the older workforce: nor is it sufficiently fleet of foot to help workers whose expertise may be outdated or whose employment may be closing or moving elsewhere.
So what needs doing? First, we must recognise that these three issues need to be seen and acted on in a co-ordinated way; they are integrated, to a large extent, and we need a cross-departmental approach to deal with them.
Secondly, in order to benefit from these changes and opportunities, we need to put far more emphasis on the importance of education and training. Recent work on apprenticeships is to be welcomed, but the financial settlement for schools continues to militate against the encouragement of vocational training and many schools are notoriously ignorant of the needs of industry or business. Careers service advice, in many cases, is to aim low to avoid disappointment—and is pretty non-existent in others. We need people in schools who are equipped to prepare our children for a future of change and challenge. It cannot be right that young people are left to fend for themselves when it comes to identifying their future pathways.
Thirdly, we will need to embrace the gig economy, but it must be regulated to protect workers from exploitation and ensure that everyone in the enterprise receives a fair share of the cake.
Fourthly, we need to provide local access to retraining and new skills programmes both for older workers who wish to or must continue to earn and participate and for those whose jobs have gone and whose skills and experience are no longer relevant. Money saved by skimping and scraping here will be spent in much greater amounts in providing support for older people or redundant workers who are not in a position to take on new kinds of employment. The Government should look at what is currently going on in certain sectors. The example of the John Lewis Partnership, which is already training and re-skilling its workforce, should be looked at for lessons learned.
These changes are challenging, to say the least. We need to act now or we will be incapable of competing in this global, technological maelstrom of a world.
Viscount Younger of Leckie (Con)
My Lords, I congratulate the noble Lord, Lord Knight of Weymouth, on securing the debate on this fascinating and topical subject.
The future of work holds much promise, prosperity and opportunity but also challenges, some of which have been highlighted today, not least by the noble Lord himself. The quality of the contributions on the subject is typical of this House and I believe it adds a great deal of value to the wider discussion. As an aside, I hope that, over time, I do not become a noble cobot.
I also congratulate my noble friend Lady Wyld on such a personal and insightful maiden speech. I hope some of the educational reforms I will touch on later will provide her with some reassurance on what the Government are doing to prepare our young people for future work and, indeed, future patterns of work. She is right that the next generation can learn and practise the latest technology to the highest standards but that the soft skills—or should I say essential skills, as alluded to by the noble Lord, Lord Young—linked to its optimum use and dissemination are equally important.
We believe that the UK is starting from a strong position. We are the fifth-biggest economy in the world. We enjoyed faster growth than the US and Japan last year. We have the most competitive tax regime in the G7. We have world-leading universities, with four in the top 10. Our light-touch approach to labour market regulation makes the UK a great place to start a business, encouraging innovation and creating jobs. The employment rate is 75.3%, the highest since comparable records began in 1971. The unemployment rate is 4.3%, its lowest point since 1975.
Perhaps I may give a brief vision of the future. The world of work will feel very different but the Government are ensuring that we put the right measures in place to embrace this: investing in new technologies; improving our skills system; ensuring that our labour market enables new ways of working; and embracing new industrial opportunities.
Technology and innovation can improve the lives of working people, boosting productivity. With the best people equipped with the right skills and performing the most appropriate jobs, both employers and individuals can thrive. It is good to note that a number of speeches were positive about technological change, including from my noble friend Lord Sherbourne and the noble Lord, Lord Knight.
An underlying theme in this short debate concerned robots. There is good evidence to show that making greater use of robotics and automation in manufacturing will increase productivity. Although there may be job displacement in manufacturing, this will most likely be balanced by gains in higher-skilled jobs—in marketing, sales, design and support roles—as productivity increases. Barclays suggested in 2015 that moderate investment in robotics would create an extra 33,000 UK manufacturing jobs by 2020 and 73,500 jobs by 2025. The RSA’s recent report notes a range of occupations where automation complements more traditional skills and job roles, providing benefits for workers and consumers; for example, connected systems that enable overburdened social care workers to focus on the “human touch” of care—another theme that came up today—diagnostics that enable doctors to improve healthcare, and chatbots operating in call centres to speed up customer support.
My noble friend Lady Stowell was reflective about who is best placed to help with change—including clever people and practical people, and a mixture of both. She was right that everyone has a role to play: employers, workers, trade unions—as the noble Lord, Lord Knight, said—consumers and, of course, government. I want to take your Lordships through the three areas where I believe government has an important role to play: technology, skills and people.
Many in this House, like me, will recall the days before emails—up to the late 1980s, as I recall—and a time when “tablets” were small objects to be taken three times a day. Now, many of us would be lost without this new technology. Smart technology will continue to revolutionise the way we work. As we move towards driverless cars and drone technology, people may no longer need to drive to get about, and the thought of taking a day off to have a parcel delivered could become an alien concept. As the noble Lord, Lord Giddens, hinted, the pace of change is almost too fast to comprehend, and he is right.
During the past 15 years, the UK has benefited from a technology-driven shift from low-skill, routine jobs to higher-skill, non-routine roles. While 800,000 jobs have been lost, 3.5 million have been created, presenting a wealth of opportunity. The digital sector was worth £118.4 billion in 2015, employing 1.4 million people. Three-quarters of digital tech businesses in the UK are based outside London. The noble Lord, Lord Knight, produced his own powerful statistics on job losses and job gains, and was right to point to the importance of managing the transition effectively. The noble Lord, Lord Giddens, took up the theme and spoke about changes in manufacturing. My own thoughts are that we are moving away from mass production in huge factories to production in smaller units. That does not mean that the percentage of GDP—I think it is about 11% at the moment—is necessarily changing; it is just a change. If one looks at centres of excellence and activity around places such as Oxford, Cambridge and the M4 corridor, one sees that we have moved to high-value economy in the UK. The noble Lord, Lord Giddens, stated that in the 1960s 40% of jobs were in manufacturing and now it is only 9%. He, too, spoke about the transition between types of jobs and sectors.
We are learning from the mistakes of the past: I am very mindful of what happened in the 1980s. By keeping one eye on the needs of tomorrow we are helping to keep our employment levels at a record high. We are taking steps to ensure that the UK stays at the cutting edge of technology, because we want the positive effects of a world-leading digital sector to be felt countrywide. Innovate UK has invested around £1.8 billion, which has been more than matched by the private sector, returning between £11.5 billion and £13.1 billion to the economy. Innovate UK has also supported innovation in 7,600 organisations, creating around 55,000 new jobs. In addition, IUK has established a network of catapult centres to commercialise new and emerging technologies in areas where there are large global market opportunities and a critical mass of UK capability to take advantage, such as offshore renewable energy and digital.
In 2016, the World Economic Forum placed the UK third in the world for technological readiness. Going forward, the digital strategy we published in March puts in place the conditions for the UK’s digital sectors to remain world leading. Moving on to our preparedness for the future, new skills will be required to make the most of technological developments. The skills system must deliver for all, from the student finishing their secondary education to the experienced worker looking to retrain. My noble friend Lord Sherbourne emphasised the word “adaptability” and he is right; yes, the individual concerned must be adaptable, but the Government must provide the right framework for that adaptability. For the skills system to work for the individual, it must also work for the employer. Partnering government investment with industry expertise will help ensure that we have a resilient workforce. As my noble friend Lady Wyld said, this resilience will be built on confidence and emotional intelligence as well as technical knowledge and skill.
Our reforms put employers at the heart of the process. New technical routes, designed to improve the technical and vocational education offer, are being developed in partnership with industry. The noble Lord, Lord Fox, raised the question of T-levels. I can reassure him that the T-level will be more than just a qualification: as well as the technical qualification the programme will include a substantial, high-quality work placement of up to two months, English and maths up to an appropriate level and digital training appropriate to the route. The content will be determined by a T-level panel of professionals. Giving employers the lead on this will ensure that the qualification will have real labour market value. We are investing £170 million in institutes of technology to deliver higher technical education in STEM subjects between A-level and degrees.
Since 2010 we have delivered 2.4 million apprenticeship starts. We are now going further, committing to deliver 3 million apprenticeship starts in England by 2020. Through the Institute of Apprenticeships we are ensuring that quality is championed and that employers are at the forefront of design. I took note of the eloquent speech by the noble Baroness, Lady Morris of Yardley, who asked how we can make education more flexible and, indeed, a gate opener. She is quite right. The Government understand this as well as the challenges of the skills gap and ensuring parity of esteem between vocational and academic training. As I said to the noble Lord, Lord Fox, the Government will also oversee the creation of a genuine technical option in T-levels, equal in status to A-levels.
It is not only about technological advances, it is also, as some noble Lords have said, about people. We also need to recognise that the demographics of the UK labour market are changing. More women are in work. The female employment rate is now 70.8%, up 18 percentage points since 1971. We should applaud that. More older people are choosing to remain in work. With the number of people aged 50 and over expected to reach 30 million by 2035, support for older people in work is essential. And there are more people with disabilities in work, as new ways of working make the workplace more accessible. The noble Lord, Lord Fox, highlighted the importance of this aspect of the workforce. This means that the inactivity rate, so called—the proportion of working-age people not in work or looking for work—has fallen to 21.2%, the lowest since records began.
Despite this success, we know there is still more to do. We must continue to take action to remove the remaining barriers people face in the labour market, including by supporting women in returning to work after having children, ensuring older workers can continue to use their skills to help the economy later on in their career, which my noble friend Lord Patten mentioned, and ensuring that ethnic minorities are able to progress in work.
The actions we have taken so far include investing £5 million to support people who left paid work to take on caring responsibilities returning to work. The noble Lord, Lord Rees of Ludlow, succinctly asked how we should care for the elderly and recognised the human element of caring, which is so important. That is why in the context of an ageing population, the Government are considering how best to support carers who are in work and require flexibility and support to carry on in both roles. We are looking at the effectiveness of existing rights in meeting the needs of carers and the possible creation of new rights.
The noble Lord, Lord Young of Norwood Green, asked what we are doing to support phased retirement. We have already removed the statutory retirement age, as he knows, and our labour market supports more flexible ways of working. This year we published a new employer-led strategy Fuller Working Lives: A Partnership Approach setting out the importance of fuller working lives for employers and individuals.
My noble friend Lady McGregor-Smith, who is not in her place, wrote an insightful report which showed that the UK is missing out on up to £24 billion a year by not fully utilising ethnic minority talent. The Government are working with Business in the Community to support the delivery of the changes my noble friend recommended.
I shall now go on to ways of working because they are also set to change significantly. The future of commuting could look very different, and the idea of a set shift may be a distant memory, with people being more likely to be able to work at times and in ways that suit them. We are already seeing a move from traditional employment towards atypical forms of work, and we know the drive for this change is both employer and worker-led. For example, the number of people in part-time work has increased by 2.5 million since 1992. There are also a record 4.8 million people who are self-employed, up from 3.2 million in 2000. These are large figures.
With more people working atypically, with more flexibility to suit them, their employer and their lifestyle, it is important that the regulatory framework underpinning employment remains ready to meet the challenges ahead. That is why the Prime Minister asked Matthew Taylor to review modern working practices. In his report, he said we had achieved labour market success to date “the British way” with regulation which protects the vulnerable while encouraging businesses to employ. He made it clear that, given the UK’s success in terms of the quantity of work, it is now time to focus more on the quality of work with all work designed to be,
“fair and decent with realistic scope for development and fulfilment”.
The noble Baroness, Lady Bakewell, pointed out that different people look for different types of work and that what represents quality work to one person may not necessarily do so for another. That is an interesting point, and one of the challenges for the Government is to agree exactly how we define quality work. Like the noble Lord, Lord Knight, we welcomed the report, and we are now considering each of the 53 recommendations ahead of responding later this year.
I will now touch on the industrial strategy, an important subject which was mentioned by the noble Lord, Lord Fox. Supporting technology, investing in skills and giving everyone the opportunity to fulfil their potential will help ensure that the UK makes the most of globalisation and technological advances. Through the modern industrial strategy, we will set the blueprint against which we will do this. In July, my right honourable friend in the other place, the Business Secretary, made it clear in his speech at the University of Birmingham that the industrial strategy will build on our strong employment position by reaching people who find it harder to participate in the job market.
Productivity is the key point. There is much more that I could say about productivity, which is a most important subject, but I am running out of time, so I may well have to write to noble Lords who made points about it.
In drawing my remarks to a conclusion, I thank all noble Lords for their input to this fascinating debate today. I would like to comment briefly on globalisation, which was raised by my noble friend Lady Wheatcroft, who made the interesting reflective comment that free trade and globalisation have brought many benefits to our society, ensuring that more people can access a wider choice of goods at lower cost.
Our approach will help us to succeed in future but there is more that we can do. We need to be ready to embrace the change that further globalisation, technological advance and demographic change will bring. We will make the most of the opportunities on offer. To paraphrase my noble friend Lady Wheatcroft, the future is here and we must embrace it.
Lord Knight of Weymouth
My Lords, I will be extremely brief in thanking all noble Lords for their contributions. I congratulate the noble Baroness, Lady Wyld, on her maiden speech and welcome her warmly to the House.
We have started a conversation about these three issues that I hope will continue over the months and years. I was pleased to hear so much talk of education and training, health and social care, and the role of the state and redistribution. It is always going to be difficult to predict the future. I will have to debate separately with my noble friend Lord Giddens about accepting his professorial wisdom as to how optimistic I should be. The Minister did a great job of reassurance without complacency, but I certainly think there is a lot more to do to provide good stewardship of the transition in the world of work in future. I look forward to further debates.