Employment Levels of Older People

Lord Bhattacharyya Excerpts

Thursday 5th March 2015 Grand Committee

[Lord Bhattacharyya (Lab)]

My Lords, I thank the noble Baroness, Lady Greengross, for securing this important debate. She is a superb advocate for the elderly, and this debate demonstrates her sharp concern for old and young alike. It is appropriate that we are having this debate in the Moses Room. The Bible tells us that Moses lived for 120 years, and even at that age, his eyes were clear and his vigour unabated. Sadly, history is silent on the effect on the Old Testament labour market. British life spans have not reached biblical levels, but many Britons are now working well into their 60s, and 1.1 million workers are now over 65. That is a quarter of a million more than when default retirement was abolished four years ago. That has had a major effect, but broader social trends are also at work. The number of older people working has increased throughout the past two decades. The decline of heavy manual work, improved health and the rise of part-time working are all making a contribution. We cannot turn back these trends, nor should we try to. For one thing, the earnings of older workers create demand and jobs. For another, the impact on full-time workers is smaller than it appears. Fewer than 20% of over-65s have a traditional full-time job. Most are part-time or self-employed. The vast majority of young people want full-time jobs, so they will not feel direct competition.

However, the ability to retain skilled workers will impact on companies’ decisions to hire new people. For higher-paid workers, this can be partly dealt with by employers offering lower wages as workers learn their trade. However, at lower levels of pay, the minimum wage rightly limits this approach. This should not change. We have the minimum wage in order to prevent exploitation of all workers.

We must find another way to help younger workers, especially those on the edges of the labour market. The key is to improve the skills of those young people who struggle to find full-time work. We offer significant support to university students, but our offer to those who do not take that route is much less effective. The crucial group is the NEETs: young people not in work, school or vocational education. For all the media stereotypes, what sets NEETs apart is that they do not have good GCSEs. This means they often pursue low-level qualifications which lead only to casual work and frequent unemployment. Bluntly, the Government are failing these teenagers, at school, after school and in the job centre.

How can we do better? First, we must offer all young people the chance to advance their careers while still at school, not just those destined for higher education. This requires a greater variety of educational provision, which could be delivered through vocational courses, specialist schools, university technical colleges or even by industrial partners—provision by industrial partners is growing. Next, we need every young person to get maths and English qualifications, even well after they finish school. All the evidence shows that these core qualifications are vital to finding work. The Government have made the right choice by insisting students who do not get good maths and English GCSEs take these courses as part of vocational education or apprenticeships, yet many drop out or do not pass. Data from the Centre for Economic and Social Inclusion show that more than a quarter of apprentices do not successfully complete their course, a far higher rate than for A-level students. That is a disturbing figure, as those young people are precisely those likely to struggle in the labour market.

Our aim should be that every single 21 year-old has maths and English qualifications. We should not stop educating them until they do, whatever it takes. For example, that might mean paying employers to support failed apprentices studying for an extra year and at the same time having some mentoring by older people who are beyond retirement age. This will mean working unconventionally, whether with employers or with health and social work teams that pick up the hardest-to-reach young people.

Finally, we must expose young people to the world of work much earlier, so that they can build links with employers and understand what is required to hold down a good job. To do that, we need local employers, councils and colleges to work together to improve education and training courses. This will help employers anticipate the problems some young people have in adapting to work, such as with the structure of the working day. This is not an impossible challenge. In most cities, just a few hundred young people need this kind of focused support each year. Each worker over retirement age could be a mentor, providing early work experience and career support, and putting young people on the right course to get a good job.

In an age when the competition for work is greater than ever, our challenge lies with the neglected young people who deserve better from us. We cannot prevent older workers earning, and we should not race to the bottom on wages. That means that we must resolve to do better for those at the margins of the labour market.

Youth Unemployment

Lord Bhattacharyya Excerpts

Thursday 14th June 2012 Lords Chamber

[Lord Bhattacharyya]

My Lords, I thank my noble friend Lord Adonis for securing this debate. As a former apprentice school governor, I declare my interest as chairman of Warwick Manufacturing Group and of being involved in industry all my adult life. This subject is very close to my heart.

My noble friend has set out the scale of the crisis. To take just one example, last year saw a 15% increase in long-term youth unemployment. It would be easy and largely justified to blame the Government for that increase, yet youth unemployment is not only a matter of fiscal policy and Work Programme funding. Young people in Britain are particularly exposed because of the structure of the British economy. We know this because youth unemployment was rising well before the financial tsunami.

Britain’s youth unemployment rate increased by a quarter in the three years to 2007, while the economy grew, so for long-term solutions we should perhaps look to countries that have low youth unemployment in good times and bad. Where do they focus? They focus on preparing young people for work. That is where we fail. We abolished our vocational technical colleges with the best of intentions. As technical colleges became universities, many lost their focus on employability for all. Vocational sub-degree courses went and work placements vanished. That was the wrong path to take.

We should look instead at fast-growing Brazil, where the number of students at technical colleges has quadrupled in 10 years, with one in four students doing a degree. Today, the Brazilian Government are building 150 more technical colleges. In Germany, the dual system of vocational education means companies pay to train the young, so they can hire the best workers after they get their Berufsabschluss. For Britain, the best example is perhaps Japan where youth unemployment has stayed incredibly low, even in the “lost decade”. Japanese technical colleges—the senmon gakko—educate a fifth of all school leavers in vocational courses. Tuition at senmon gakko costs more than in most universities, yet many students take a vocational course alongside their degree, such is their value in getting a job.

At secondary level, technical kosen schools which take students to higher education on a vocational path are massively oversubscribed. Both kosen and senmon gakko graduates have outstanding employment rates. In contrast, we in Britain fail too many young people not on track to “traditional” higher education. Employers report low basic skills and young people are too often left with qualifications of little value. I know that the company Jaguar Land Rover with which I am very closely involved cannot get youngsters to go there.

We have discussed this for 30 years and more, yet far too little has changed. As in Japan, we need better technical education at both secondary and post-16 levels. Of course, schools must first give all pupils the essential foundations of technical education, literacy, numeracy and science. We should also encourage innovation in technical education in university technical colleges, which my noble friend Lord Adonis talked about. I am delighted that we will have a university technical college in Warwick, but Britain needs more like it; we should have hundreds of them.

Next, we must transform vocational education after 16. There is huge demand for skills that are worth something in the jobs market. Young people apply for quality apprenticeships in huge numbers, but we have far too many useless skills providers. An easy way to make money is to set up as a training company, latch on to a funding body and provide some low-level vocational “qualification”. Sadly, we saw examples of this during the jubilee. To stop this, the Wolf report proposal of letting funding follow students rather than courses will reduce incentives to offer confetti qualifications.

Finally, we must introduce the values of the Japanese senmon gakko into all our higher and further education colleges. We need more flexibility, more modularity and more integration between courses and the jobs market. Some may protest at the factory floor arriving in the groves of academe. However, a law degree from Cambridge is also part of a well rounded vocational education. For apprentices as well as lawyers, vocational education must be a path to the top, not a dead end.

Young people are ambitious. We must be with them and create a route from apprentice to doctorate. I am a graduate. I did my apprenticeship and then a doctorate, which was paid for by the company that I worked for. Sadly, we see too many examples of where the Government have failed in this area. There have been many courses. I blame industry, too. It whinges left, right and centre that we do not have enough skills, but it should pay for them. In my case, industry paid. In all other countries, it pays. Of course, the Government must help.

Health and Safety: Common Sense Common Safety

Lord Bhattacharyya Excerpts

Thursday 25th November 2010 Lords Chamber

[Lord Bhattacharyya]

My Lords, I begin by thanking the noble Lord, Lord Young, for securing this debate. In politics, it sometimes seems that the greatest health and safety risk is the act of thinking aloud. However, it is only by risking controversy that we achieve anything. I am glad that the noble Lord speaks his mind, because too often politics is governed by caution, not frankness.

I declare an interest as director of Warwick Manufacturing Group and as an engineer who has long been concerned with product design and industrial processes. As a young engineer, I remember developing systems to prevent machine operatives from developing posture problems, so avoiding the back injuries and arthritis that manifested themselves 20 or 30 years later. Indeed, the whole subject of industrial ergonomics sprang from research into safety at work. It was not a joke but an ally in building a better workplace and improving productivity, so how did “elf’n’safety” become a national bugbear alongside the jobsworth and the traffic warden? I believe that the answer is a lack of balance. Health and safety regulation becomes unbalanced when processes designed for hazardous activities are applied to low-risk environments.

In many ways, the emergence of a health and safety-conscious society has been a success. Even in the past decade, as the noble Lord mentioned, the number of fatal injuries at work has declined. The Labour Force Survey identifies a fall of 45 per cent in non-fatal injuries. That is good news. There have been fewer deaths and fewer injuries. Only half the reduction in fatalities is due to the changing nature of British industry. It is improved safety that makes up the rest of the difference.

Where you see good, well established manufacturing businesses with high productivity and quality control, you invariably also find a strong health and safety record. At Jaguar Land Rover, more than 50 people are employed specifically to work on health and safety. This is not a legal requirement. The managers simply see it as part of good business practice. We need a broader culture of partnership between business and health and safety inspectors. In hazardous occupations, this is happening. The HSE makes it a priority to work with industry groups such as the Confederation of British Metalforming to produce sensible advice for companies. For example, the Manufacturing Technologies Association contributed to the HSE’s work on standards for safety in machine tools.

Sadly, once you leave the shop floor and go to the small business, the office or the village hall, the reputation of health and safety plummets. After all, health and safety originated in industry; that was where the problem was. It is tempting to see this as a result of media exaggeration. Yes, many of the stories that we hear are myths, but the myths persist for a reason. In yesterday’s Birmingham Mail, there was a story about “topple tests” in a local cemetery. These tests apply pressure to gravestones to see if they fall over. Families whose gravestones fell down were charged £500 for repairs. The Government, the Health and Safety Executive and the industry body all said that these tests were not needed, but they went ahead anyway. It is this sort of activity that gives health and safety a bad name.

We need a proportionate management of risk. Studies have shown that, for a pilot, even the slightest change in a display can have a major impact on safety. The same is not true in most offices and small businesses, yet too often the same level of risk avoidance is demanded. As a result, nearly 40 per cent of small businesses say that health and safety regulations are an obstacle to success. For many small businesses, a fear of being sued for negligence, as the noble Lord mentioned, leads them into a twilight world of misleading information and overfussy guidance.

Often, these policies come not from government but from the small army of consultants who advise businesses on workplace safety. For small businesses, those independent consultants are the main source of information on health and safety. Many are reputable, but some have little interest in making the regulations understandable. The more confusion there is in the interpretation of regulations, the greater is the need for consultancy. It can be nothing more than a gravy train. This leads to high cost. The Better Regulation Executive reported that avoiding pointless health and safety advice could save small businesses £140 million a year.

The solution is clarity and simplicity, not laxer safety rules. We should make it simple for businesses to do their duty by taking reasonable steps to prevent risk. I therefore support the report’s proposal of 20-minute checklists for offices, shops and charities. They should provide clarity that this is all that is required from business. Next, we need to ensure that independent consultants offer good, straightforward advice. Today, the HSE recruits inspectors from industry and puts them through training that provides an understanding of business needs. The report suggests a qualification requirement for consultants, with the HSE taking the lead in validation. I agree. I further suggest that it would be sensible to use the HSE’s existing framework of training as the basis of such a qualification.

The crisis of health and safety in this country is not one of legislation; as the report says, our legislation is effective. It is not one of fatalities or injuries, on which our record is excellent. The crisis is one of communication, complexity and consultants. To change that, we need simple rules and easily understood, common-sense regulation, not gold-plated regulation. Therefore, I entirely agree with the report, which I would like to see supported and implemented fully.