Employment

Lord Haskel Excerpts

Thursday 27th October 2011 Lords Chamber

[Lord Haskel]

My Lords, in her excellent opening remarks, my noble friend spoke of the past. Most of us in this Chamber are old enough to remember what happened when information and communications technology first arrived on the scene. It was going to change the world of employment. We were all going to work from home and we were all going to have a lot more leisure time. Well, it did not quite work out that way.

Some people's jobs do allow them to work from home—for instance, representatives or currency speculators—but, for the rest of us, we can work from home perhaps one day a week if we are lucky. Indeed, for many of us, working from home is just catching up, because it is the pace of work that has changed, with a corresponding increase in stress. This is thanks to the huge expansion and reliability of mobile ICT, which has transformed business. McKinsey estimates that 25 per cent of UK growth in the past five years has come from online business. Indeed, as my noble friend Lady Donaghy described, in many companies people now work in networks, and they use the social networks to advertise and to contact colleagues, customers and suppliers, as well as to contact family and friends. So the line between home and work is becoming much more blurred in this changing world of employment.

In many companies and organisations, this independence has led to far less rigid management. Employees are trusted more, with a reliance on professional ethics, as the noble Baroness said. This has led to much innovation in the way in which businesses work. You see this attitude celebrated in some of our most successful companies. Many employers now say that they hire for attitude and train for skills. This is an essential attitude, as my noble friend Lord Young put it. Indeed, employers complain about the absence of this attitude in potential recruits. A lot of public money is spent on preparing people for work. I hope that the Minister can assure us that her department is also fostering this attitude, which business wants and needs.

Of course, modern ICT also enables people to set up in business themselves. The web is now a marketplace where people can buy and sell goods and services at very little cost. In these ways ICT has already changed the world of work and employment and it is going to do so even more. Cloud computing means that now you do not have to buy servers and expensive software any more. You just use the storage and bandwidth you need on the cloud. This turns computing from a capital expense into an operating expense. This means that ICT will have an even greater impact on the changing world of employment. I hope that the Minister's department will encourage the internet economy, in both the private and the public sector, especially as this can only help the current financial crisis—it will benefit business, as my noble friend Lady Donaghy said. Indeed, the financial crisis is changing the world of employment as well as destroying jobs, as my noble friend Lord Kestenbaum explained.

The cuts in employment resulting from this financial crisis are falling heavily on public services, particularly those services delivered by local authorities. What is this to do with the nature of employment? The answer is that there was a time when we worked in either the public sector or the private sector. Now we are seeing the emergence of a social sector—half way between the two—which is largely occupied by charities and by social enterprises. But the existing charities and social enterprises working in this sector have had their finances devastated by the tight government financial settlement. So we have to run our welfare state with less money and greater commercial pressure, which makes the nature of employment in this sector confusing. Is the altruism of working in the charitable sector being taken over by the economics of working in the commercial sector? Are public service values being replaced by the values of the market?

What is the nature of employment in this emerging social sector? The big society idea is too fuzzy to answer this. Yet the Government are encouraging social enterprises to rescue the welfare services that we can no longer afford. Indeed, if this is not clarified soon, these enterprises will become a new form of quango and there will be a big political price to pay for that. The real answer is the concept of shared value. According to Michael Porter, this is the key to the next wave of innovation and growth, and I have always found that he is worth listening to. Yet the Government's growth strategies have been silent on this—it would have been nice to hear from some other noble Lords on the Conservative Benches who have experience in business. Thanks to the Companies Act 2006, the recent stewardship code and less rigid attitudes, companies are starting to share the values of their employees, customers, local communities and suppliers. That is having an impact on the world of employment. The environment, fair trade and human rights as well as safety and employment rights have all become issues which employees now have to consider.

This is not “social responsibility”, which is usually on the periphery of a business. It is something central, something that is shared. For instance, if a firm invests in the health of its employees, they and their families benefit and the firm minimises absence and lost productivity. If a firm invests in employee skills, everybody benefits, as the noble Baroness, Lady Brinton, told us when she spoke of Marshall Aerospace. Taking on the apprentices that other noble Lords have spoken about is all part of this.

At one time it was thought that efforts to minimise pollution increased costs and occurred because of regulation. Today, I think that the consensus is that major environmental improvements can be achieved with better technology that pays for itself and produces better resource utilisation and a better environment at work.

The new generation of young people is asking business to create this kind of world of employment, not only because it creates the kind of business culture that they want to work in but because it legitimises business by getting away from the old narrow views. It acknowledges the legitimacy of many of the things that the demonstrators in London, New York, Berlin, Tel Aviv and elsewhere are calling for. Indeed, on 17 October, the Financial Times ran a leading article saying that it would be foolhardy to ignore their anger and frustration. Sadly, in London, the protestors are losing this support by their mistaken action at St Paul’s.

Many leading companies are finding that this concept works for them. Those of us who visited Google this week saw this in action. These changes in technology and the changes in society are changing the world of employment. What the Government have to learn is how to regulate so that these concepts of shared values and technology are encouraged. I agree with my noble friend Lady Prosser that the Prime Minister could start by replacing his backward-looking adviser with somebody more forward-looking. Get this regulation right and regulation regarding red tape and employment falls into place and becomes secondary. I hope the Minister is listening. It would be foolhardy to dismiss the message.