Employment

Lord Stevenson of Balmacara Excerpts

Thursday 27th October 2011 Lords Chamber

[Lord Stevenson of Balmacara]

My Lords, I thank my noble friend Lady Prosser for the broad sweep across the issues that she gave us and for her recommendations. She managed to encourage a large number of noble Lords to join in, and it is a measure of the interest in the topic and the quality of the debate that we have had that we have been able to attract the noble Lord, Lord Campbell of Alloway, to speak. We are grateful for that, as he rarely does so.

Along with many noble Lords, I found this topic very difficult to get into and could not decide where to focus my remarks. In search of inspiration, and perhaps in anticipation of the adjuration from my noble friend Lady Donaghy about the need to consider social media, I turned instinctively to Google and put in the words, “the changing world of employment”. Unfortunately, that did not provide much food for thought; it mainly threw up expensive job retraining opportunities, which I passed up, although many of them were very clever and masqueraded as editorials, which I read. There were also a few rather odd blogs, which I certainly would not recommend.

The top-rated entry, which I shall read for the enjoyment of the House, contained the following insightful if barely literate gem:

“Today’s world of work is changing day by day. Employees and employers are moving towards revolutionary communication advances. The introduction of flexible work arrangement is moving towards the outsourcing and off-shoring different activities of business. This outsourcing and off shoring not only save lot of money but it also saves time”.

I have the reference if anyone wishes to follow it up. There is not much inspiration there, although I think it contains a grain of truth within its rather odd phraseology.

To try to get a handle on something to get started on, I rushed to a poetry book. Do they not say that the Greeks have a word for everything, even in these benighted times? So perhaps that was the place I should go to. I looked at Aristotle, who said in 300 BC that, “All paid jobs absorb and degrade the mind”. Clearly working conditions in Athens in that period left something to be desired. Perhaps this quotation from Voltaire's Candide will redress the balance: “Employment saves us from three great evils: boredom, vice and need”. It probably sounds better in French, but think about it.

The title of this debate is “The Changing World of Employment”, and we have had many excellent speeches. The range of perspectives that we have drawn from include employers and a full array of those with experience as employee representatives, and we must not forget the incisive contribution and recommendations from my noble friend Lord Desai. Once again the House has shown itself to have a depth of experience and knowledge that are able to inform us about the issues of the day.

The key issues that seemed to come up included safeguarding employment rights—several noble Lords spoke on that point; the changing structure of the employment market, including the blurring of the line between the public and private sectors; the scarring effects of unemployment, particularly on the young; the growth in women’s employment, which is welcomed, but also the disgraceful fact that unemployment among women is now at the highest level ever; the growth in part-time working and the problems that that can bring; the fact that many people now work at home, which brings problems but also opportunities; the complexity of modern employment and the stress that that can bring; and the changes in rights and responsibilities in employment, which the law must keep pace with.

We have heard about diversity, talked about pensions and looked at discrimination and prejudice, which are still all too prevalent. We have touched on apprenticeships and the importance of vocational training. It has been a wide-ranging debate and will repay reading in Hansard when it comes out.

Many noble Lords spoke about the wider economic and social challenges facing our country. One of the main themes that have emerged today is the need for an economy that looks and feels very different from what we see today, with more opportunities for more people to get better jobs in good companies. That is the topic I want to focus on.

A recent report from the Resolution Foundation has shown how real-term median earnings flat-lined between 2003 and 2008. The Governor of the Bank of England, no less, has warned that we might be facing six years of falling living standards. Even more worrying, our economy is simply not making the best use of the skills and talents of our people. In 1986, around 30 per cent of workers said they had qualifications at a higher level than were needed to get and do their job. By 2006 this figure was 40 per cent, and by 2009 over half of employees said their skills were underused. The most recent available evidence suggests that at least one-fifth of graduates do not work in graduate-level jobs for several years after they graduate.

In short, we have developed an economy that is dangerously dependent on too many low-skilled jobs. Our growth among employers demanding more qualified and skilled staff is among the lowest in the OECD. We have an economy that is betraying the hopes of the young generation. It is failing to create the skilled well paid jobs that make the most of, and properly reward, their skills and abilities. And let us be very clear about one thing: the growth we need, the jobs we need, will be in the private sector. We will have the modern economy that we need only if we support good private companies that win market share and thus make profits in tough global markets. Equally, though, as my noble friend Lord Monks highlighted, we will not create strong and fair communities unless the workplace is provided by good companies where you are valued and respected and have opportunities to develop your own abilities to the full, and which give you a fair chance to provide for a secure future and live your life to the full.

These are deep-seated issues about the nature of our economy. I hope that the Minister will focus on where the coalition Government think that these good companies, good jobs and better opportunities will come from. There seems to be very little government action that will help us to adapt to and thrive in the changing world of employment. Specifically, what does she think can be done to ensure our economic competitiveness? How do we foster more companies where work is about more than modest pay levels and a struggle for survival? How will we better support companies whose business model is based on recruiting and retaining a skilled workforce, and which have the products and service levels that will allow them to grow and thrive? How do we ensure that these opportunities are in every region of the UK, not just a few?

In the wake of the banking crisis, there is a growing consensus that our economy needs greater relative strength outside financial services. Advanced manufacturing must be part of this, but so must other sectors with growth potential. There must be opportunities across a range of green technologies, in the life sciences and in our creative industries, which have a strong position in global markets, as does higher education at present. Business services, from design and architecture to law and accountancy, have already achieved global reach. What will the Government do to attract world-class companies and encourage the growth of larger numbers of SMEs in these sectors? We need to be a country where the global companies feel that they must be located and able to grow; and a country where smaller companies can innovate, grow and prosper. We also desperately need to support innovation along the lines outlined by my noble friend Lord Kestenbaum.

The Government must be relentless and have a single-minded focus on creating the conditions for private sector growth. In practice, markets are inevitably and unavoidably shaped by what Governments do and what they do not. At present, we are seeing a badly managed retreat from what was and should be an active government strategy—business support dismantled; incoherent policy-making in the green economy; uncertainty over key infrastructure such as broadband; confusion over planning policies; reduced investment in regional growth and the high-tech economy; and muddled thinking on apprenticeships for young people, which were a beacon of hope, as my noble friend Lord Young of Norwood Green called them. Universities are dazed and confused by the implications of the new voucher system and therefore doing less with business. On that point, something that the whole House should be worrying about is the fact that applications to universities are down significantly for next year.

The powers of government go way beyond establishing the right fiscal conditions for the macroeconomy or supply-side measures such as investment in skills and infrastructure, important though those policies are. As we have heard today, what is needed is an activist approach to business and enterprise policy—a recognition that, used wisely and intelligently, government influence can help to create the markets that foster successful companies in the key sectors, which we need. Crucially, an activist approach means understanding what business needs and making sure that public policy is properly aligned and co-ordinated to deliver the confidence and certainty that business needs. Getting bits of it right is not good enough. It is the coherence that counts.

To conclude, I suggest to the Minister that this excellent debate gives her a golden opportunity to give her Government’s support for our recently announced growth initiative. This includes a £2 billion tax on bank bonuses to fund 100,000 jobs for young people and build 25,000 affordable homes; bringing forward long-term investment projects, such as new school and hospital buildings; temporarily reversing the recent VAT rise, which would mean a £450 boost for families with children; a one-year cut in VAT to 5 per cent on home improvements and repairs to help small businesses; and a tax break for every small firm that takes on extra workers. These measures would get the economy going and would certainly change the world of employment for those who are unemployed, those who are currently in education and training, and our children and grandchildren. We would all agree that such change would be for the better, as well as saving us from those three great evils that Voltaire warned us about, “ennui, vice et besoin”.