Lord Fox
Main Page: Lord Fox (Liberal Democrat - Life peer)
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.