Lord Knight of Weymouth
Main Page: Lord Knight of Weymouth (Labour - Life peer)
Lord Knight of Weymouth
That this House takes note of the effect of globalisation, technology and demographic change on the future of work, and of the public policy response to those changes.
Lord Knight of Weymouth (Lab)
My Lords, I am most grateful for this opportunity to open a debate on one of the profound political challenges of our generation. I am grateful that such a distinguished list of speakers has chosen to follow my lead. I am especially looking forward to the maiden speech of the noble Baroness, Lady Wyld, whose own family story in the north-east is a great one to reflect the changing nature of work.
I also noted that it took the Government a little while to decide who would respond from their Front Bench, perhaps it being less than obvious which department leads on this cross-cutting issue. I am delighted that the bottle stopped spinning in the direction of the noble Viscount, Lord Younger of Leckie, his background in HR and recruitment making him the perfect choice.
I have been thinking about this issue for the past year as a member of the Future of Work Commission established by Tom Watson MP, which will publish its first report soon. I am grateful to fellow commissioners and the secretariat for informing and inspiring me, as I am to all those who sent in briefings for this debate to accompany the excellent Library briefing.
Later this year, I am taking my mum to the grave of her uncle at Ypres, 100 years after his death in the First World War. It has inspired me to look a little more at my own family history. George, my uncle, and my grandfather, William, were both born in Wolverhampton and went to the local school run by the Sisters of Mercy for the children of Irish Catholic migrants. Their education was sufficient for the factory, and if it were not for the war their economic destiny was assured. One died, the other survived.
At the end of the Second World War, my mum, William’s daughter, started school. She later made the cut and was one of the lucky 25% to make it to grammar school, a system designed to meet the need to develop some talent for the professions and academia while the rest were mopped up by mass work in the factory.
By the time I went to school, the promise of working hard for exams to go to a great university to study under my noble friend Lord Giddens was that I could then get a well-paid job for life, a 25-year mortgage, a final salary pension scheme and retirement in my 50s. Well, what happened to that? It has all changed. The factories have largely gone. There are sectors which struggle to find people who want to do the work, like care or harvesting fruit and veg, and degrees and debt for around 40% is a more questionable investment for some.
My children, in their late 20s, are doing well but are a long way short of home ownership or saving for a pension. If they start a family, as I hope they do, it will be much later than it was for me or my mum; they are likely to work much longer and cycle through multiple careers.
I am very proud of them. They are likely to go through multiple careers. Their security is in their strength of character and agility to keep reskilling or choose careers particularly resistant to technology. My son is working directly in digital and my daughter has wisely found her vocation in opera direction, one of the last jobs that could be disrupted by robots and much safer from deskilling than being a Member of your Lordships’ House, although I suspect we are more likely to be enhanced by AI than replaced by noble robots. My family story is not uncommon. The economy of the last century may have had less mobility and opportunity than it has now, but it had more certainty and security than the one that we are custodians of in this Parliament.
Two weeks ago, Pearson, Nesta and the Oxford Martin School published an excellent report and analysis on the future of skills for 2030. They looked at the interaction of globalisation, technology, demographic change, climate change, political instability, urbanisation and income disparity. To make things simple, I have stuck just to the first three. My triumvirate of factors are not all bad. As the Library Note says:
“Globalisation has coincided with a decrease in extreme global poverty and a decrease in inequality between countries. However globalisation has also coincided with an increase in inequality within countries”.
Longevity and declining birth rates look challenging to the Treasury, but personally, I am a fan of longevity, so long as we do not get to total rejuvenation. With respect, the notion of immortality and a life peerage leading to an eternity with your Lordships might be a mixed blessing.
Tech change, be it digitisation, data, AI or robotics, can be and are all used for good. There is nothing inevitable about dystopia. The heart of this debate is our choice of how active we should be: first, in understanding the interplay of forces that are changing work, and then how active we want to be in promoting a more utopian outcome. What is the effect on work of the combination of technological change, globalisation and demographic change? In its briefing, the John Lewis Partnership told me that more than half of jobs in retail could be automated. The British Retail Consortium predicts 900,000 fewer jobs in retail in this country by 2020, but that more than 100,000 new jobs will also be created that need new skills. PwC’s excellent Workforce of the Future report predicts 28% of jobs being at risk from automation, some being higher-paid, professional work. By contrast, a Salesforce-sponsored study predicts that, over the next four years, AI-powered customer relationship management activities will boost global business revenue by $1.1 trillion and create more than 800,000 direct jobs and two million indirect jobs, surpassing those lost to AI-driven automation.
I am an optimist. My judgment is that new technology will create new work that ultimately compensates for job losses along the way. Our problem is that we do not know whether there will be a time lag between lost work and new work, or where the new jobs will be. Our responsibility is to ensure that the UK is well placed in terms of supply-side measures, such as skills and investment, and in terms of our relationship with globalised economic forces, to take advantage of the new work. The pace of change is certainly a worry. The first industrial revolution of mechanisation and steam power was highly disruptive, but we had just over 100 years for generations to adjust before the next revolution of mass production and electricity. We then had 70 years or so to adjust before the third revolution of automation and computing. We are a long way from adjusting to that, while we now have to pivot again, as a society and an economy, around cyberphysical systems and everything being connected over the internet, and of data being more valuable than labour.
We see businesses making logical microdecisions for their efficiency that create job losses. Aggregated together they create a significant macro problem. The collected effect of those job losses is fewer workers, less consumption and therefore less spending in the economy to benefit those businesses. With less tax being paid, of course, the public sector is also constrained in responding. We urgently need new thinking that incentivises a rebalancing of management thinking around value. We need value for customers, workers and society to be balanced alongside shareholder value. We took a very wrong turn in management thinking in the 1980s. New economic thinking needs to appreciate the value of work. We need a stronger vision of good work, with dignity, security and empowerment available to all. In the latest British Social Attitudes survey, 62% of respondents said they would enjoy having a job even if they did not need the money.
As mental health problems rise across our population, we need a better appreciation that since mental health and self-esteem go together, so self-esteem and knowing that your contribution to society is valued also go hand in glove. Currently, the norm is to have your contribution valued through work. It can be no accident that growing political instability and the rise of the politics of fear has happened while work has changed to be more insecure and exploitative. There are now 5 million self-employed workers, 900,000 workers on zero-hours contracts and 800,000 agency workers in the UK. Since 2008, the number of self-employed workers has grown by 24%, the number of agency workers by 46% and the number of workers on zero-hour contracts by more than 400%. This insecurity may increase with Brexit and the ending of the Social Chapter and this Parliament needs to be cognisant of future work patterns when legislating for what follows.
I welcome the Prime Minister commissioning Matthew Taylor to review modern employment practices: many of his recommendations are a step in the right direction. I also hope that our friends in the trade unions are looking at new organising models. Their critical role in providing security for those in work must now spread into new generations and into the digital economy. While insecurity hits the low-skilled hardest, the evidence also suggests that many mid-skill jobs are more likely to change than be automated completely. Tasks are likely to transform over the coming decades, with more collaboration between machines and humans, but the jobs are likely to remain. The jobs, or part-jobs, least vulnerable to automation are likely to be those which involve our most human qualities: teamwork, empathy and imagination. When advising family members about their next career, noble Lords might want to think about the arts. It is a great scandal that our current EBacc accountability system is freezing these subjects in many of our schools.
It is worth exploring whether our whole education system is fit for purpose in this changing environment. There is an honourable argument that the job of education is to make people educated, not to meet the utilitarian demands of the economy. I strongly disagree: that is a false dichotomy. What would education look like if it were to meet the future needs of the labour market? The employer demand is for higher-level cognitive skills that are cross-disciplinary and combine with excellent human skills. Employees must be agile learners, equipped with the motivation and learning skills to take new roles that currently do not exist. Surely a school curriculum must now achieve three things: a development of character that is empathetic and resilient; a sound framework of academic knowledge; and a strong set of practical, creative and learning skills. This whole-child education is vital. It is available in our best private schools but being diminished in our state-maintained schools.
Our schooling is designed around meeting the entry needs for university. For most, a bachelor’s is the route to a professional career, with some signs of an arms race towards needing a master’s—and more debt—to differentiate on the basis of academic attainment. Yet traditional graduate recruiters such as Unilever are now changing their recruitment practice to use AI and online games to sift and get a more diverse workforce. We can foresee the end of qualifications as the proxy for skills and the basis of sift by recruiters. That in itself will pull the rug from under our education system. Where will it leave the return on investment in a degree, especially given that you can now earn while you learn on a degree apprenticeship? Many forward-looking businesses are also becoming learning institutions themselves. This must be part of a revolution in adult skills that embraces work as an aspirant destination straight from school, that includes part-time degrees and unbundles the bachelor’s degree to a series of courses with credits from different establishments that then can be given an accreditation wrapper by a university. The fact that part-time degrees have fallen by 61% since 2008-09 according to the Open University, especially among working adults, should really worry us in this context.
This adult skills revolution will need a new funding scheme, and I advocate individual skills accounts. These would be an extension of the apprenticeship levy, where employers, employees and the taxpayer pay in over one’s working life to provide a source of finance for lifelong learning, both academic and vocational. I have plenty of other thoughts and no more time. Should we have a jobs offset scheme, akin to carbon offset, for responsible employers to generate investment in job creation? It could also invest in those areas of plentiful work, such as care and environmental restoration, that have no economic model to fund decent pay. Should we tax data flows rather than corporate profits? Should worker visas be easier but conditional on training a multiple of UK residents in the role? How do we incentivise an employment culture that embeds diversity of gender, race and orientation but also, critically, age?
I look forward to your Lordships’ contributions. We need to legislate, having thought deeply, for a utopian future, not sit back on our comfortable red leather and allow a dystopian one instead
Baroness Sugg (Con)
My Lords, this is a time-limited debate and the time limit for speeches today is five minutes, not six minutes as today’s list states. I remind the House that when the clock shows five minutes, the limit has been reached.
Lord Knight of Weymouth
My Lords, I will be extremely brief in thanking all noble Lords for their contributions. I congratulate the noble Baroness, Lady Wyld, on her maiden speech and welcome her warmly to the House.
We have started a conversation about these three issues that I hope will continue over the months and years. I was pleased to hear so much talk of education and training, health and social care, and the role of the state and redistribution. It is always going to be difficult to predict the future. I will have to debate separately with my noble friend Lord Giddens about accepting his professorial wisdom as to how optimistic I should be. The Minister did a great job of reassurance without complacency, but I certainly think there is a lot more to do to provide good stewardship of the transition in the world of work in future. I look forward to further debates.