The Future of Work

Danny Kruger Excerpts

Thursday 19th November 2020 Westminster Hall

[Danny Kruger (Devizes) (Con)]

It is a pleasure to serve under your chairmanship, Ms McDonagh. I congratulate the hon. Member for East Renfrewshire (Kirsten Oswald) on securing the debate. I recognise that there could be no more important subject to discuss in this place. I am pleased that we are able to have this discussion. I will range more widely than our immediate situation, but I will end with a word on where we are and what Government might do.

I will start with a quick scan of what has happened since the last recession. We may be entering a different recession that is happening because demand is being choked off in the economy. The 2008 recession was caused because credit was suddenly cut off and that recession ended quite quickly because the Government and the Bank of England pumped credit into economy. That kept the banks afloat, and through them businesses were able to borrow and stagger on.

The crucial issue is that the great bulk of the money that entered the economy after 2008 fed not into people’s incomes, but into their assets, or the assets of those people who had them. We had 10 years of growth until this year, which is a modern record, but we also had the lowest wage growth for 200 years. Median incomes before covid were still lower than in 2008.

We have had a jobs miracle over the last decade, but these were not jobs as we used to think of them. Two thirds were precarious. I do not mean to criticise the Governments since 2008 that took these steps because things would have been far worse if those steps had not been taken, but we need a different way out of this recession, if we can find one. Most of all, we need to build a better economy that is fit for the times.

The future of work is in large part a debate about automation. I recognise the truth of the claim, that in past times technology has not destroyed jobs but created them, but I do not think that is going to happen this time around to any significant degree. For a start, the new industries that tech is creating are not labour intensive. Some 50 years ago the world’s most valuable company, the telecom firm AT&T, employed 750,000 people. Today’s telecom giant, Google, which is worth about the same as AT&T in today’s money, employs only 55,000 people—less than a tenth of AT&T’s workforce.

Crucially, previous tech revolutions replaced manual labour, which allowed human beings to build new cognitive innovations that created jobs. This time we are seeing cognitive tasks taken over by the machines, not just with clerical work but with projects from design to law and others.

There is a dystopian future, which the hon. Member for East Renfrewshire helped to paint. In that future, inequalities of wealth will get greater. People with assets will get richer and those with the right skills will get more successful. Those without those skills and assets will fight over the low-paid jobs that remain. As Daniel Susskind has shown in his book, “A World Without Work,” many people will find themselves locked out of those jobs by their skills, their attitude or their location.

As the hon. Lady said, this year has accelerated trends that were already under way. The principal victims economically of lockdown have been those in the insecure jobs that have boomed in recent years.

[Grahame Morris (Easington) (Lab)]

The hon. Gentleman is making some important points, but would he accept that there is no inevitability about this, and there is a role for Government? Yes, we need to identify potential growth areas that offer high-skill and high-wage jobs, but we should not simply abdicate from those areas where traditionally we have had a lead, for example in highly-skilled engineering at Rolls-Royce in Derby, and allow those jobs to be offshored, so we lose that potential forever more.

[Danny Kruger]

I agree that there is an important role for Government, both in cushioning the effects of change and in helping to nudge change in the direction where it will be the most beneficial for us all. We cannot stand in the way of what technology is doing to the world of work, but we can definitely make it a more comfortable experience for our people. I agree with that. I shall come to what the Government might do in a moment.

Although there has been an acceleration of many of the dangerous and destructive trends of recent years through the lockdown, we have also had a glimpse of a different future. I was going to say that the danger is having millions of people in forced unemployment, with all the harm that entails. The hon. Member for East Renfrewshire raised the prospect of universal basic income, but I do not believe that we as a species are ready for permanent idleness.

[Kirsten Oswald]

I gently point out that universal basic income is not in any way, shape or form about enforced idleness. I encourage the hon. Gentleman to look around the subject and see what potential there is for better work, and more equal and fair work, under a universal basic income system.

[Danny Kruger]

It may be that we are quibbling over terms, and I recognise and accept that there is a role for Government in subsidising some wages. My concern is that there is danger in the idea that it is possible for Government to provide all the income for all the people, so that they do not have to work—which is, of course, the end result of the proposal for universal basic income.

[Grahame Morris]

No, it is not.

[Danny Kruger]

I think it is dangerous to suggest that it is possible for Government to subsidise all the incomes of all the people. We are fundamentally producers, not consumers. I also think that UBI would lead to inflation, as the income that was passed to people would simply lead into higher costs, so we would need a better management than that.

I have spoken of a dystopian future, but there is also a positive vision. The lockdown has given us a glimpse of that different future for some people. In the future more people will work from home. Fewer people will work at all, in the common sense of the word, for a remote boss in a big corporation or organisation. More of our time will be spent with our families and helping our neighbours, and new resources of care and creativity will be summoned from each of us. The Government might directly subsidise some incomes, but in the future that we want that will not be money for nothing; it will be linked to productive, pro-social creative activity. Of course, that is what we saw for some people during the lockdown. We need it for everyone.

As the hon. Member for East Renfrewshire said, there is a benign scenario in which automation frees up human beings to serve each other, while the machines serve the machine. Let the robots manage the logistics, and we can do what human beings are uniquely capable of, because if there is really nothing in the ordinary way of human work that machines could not do, what is the point of humans? What shall we do in the future? Happily, the answer is obvious. Humans should do what humans are good at—namely the activities of care and creativity.

We are good at looking after each other. Everyone knows from their own lives the foundational need for and value of human help when we are weak, at the start and end of life and at moments of illness or trauma in between. That giving of care might possibly be physically possible for some automation of the near future, but it is unthinkable that we would ever want our children to be nursed by a machine, or a robot to hold our hand as we die. In the new age that we are entering, care will be demanded more than ever, because our societies are ageing. McKinsey reports that by 2030 there will be at least 300 million more people aged 65 and over than there are now. Globally, the number of jobs related to healthcare and social care could grow by 50 million by 2030.

Automation is helping that trend. The duties of hospitality, in retail, cafés, shops, banks and hotels—those are the jobs that human beings are good at. We notice that automation is helping that. Richard Sargeant has written that after the introduction of ATMs—cash machines—the number of bank tellers in the economy rose, because ATMs made the banks more efficient and allowed the tellers, the human staff, to focus on the more complex human role of customer support. If we are good at care, hospitality and customer service, we are also good at creativity. I am talking about art and design, digital innovation, horticulture, philosophy, place making, sport, entertainment and education. We have to use the emergence from the shadow of covid to build back better. That means consciously orienting our economy and our education and skills systems towards those functions of care and creativity. That will require and help to create, as we saw in the lockdown, a more local, family-friendly and environmentally responsible society.

Let me finish on where we are now and the immediate priorities. We recently had a great bust-up in the House on the issue of children in families on low incomes and how they are to be fed in the holidays. We finally reached the right place on that, but I do not deny the role that pressure from Parliament and the media played in getting us there. We got the right result, which is a system whereby alongside more cash for families, which will be delivered in a targeted way through councils, we are enabling more support to be provided through communities. That is the model that we need overall. Yes, people need more cash, and we should consider whether the universal credit uplift should be continued or more flexibly targeted. However, more than money, what we all need is people around us, and that is why I am so passionate about civil society and its role. On welfare, yes to generous universal credit, but I want to put in a word for universal support. The original corollary in the design of universal credit was civil society organisations getting alongside people who were unemployed to support them and their families.

Kickstart is a tremendous programme that the Government have introduced to help young people get into employment at this time. Already 20,000 new placements have been created and 300,000 are due over the coming year. What it enables is more than just a job, which might only be temporary anyway. Crucially, it provides the real social support that young people need to develop the skills, care and creativity that they and the economy need. I urge employers—not just small ones, but large ones as well—to make use of the gateway arrangement, which helps employers to recruit and train young people and to develop the skills that will make them prosper. The future jobs fund, which was a similar programme introduced in 2008, had quite a high drop-out rate, and we need to prevent that.

The activity holiday programme, universal support to help people with employment and beyond, and the gateway system for the kickstart programme are a vision for a better future, so I will end on that point.