Future of Employment: Continuity or change?

The seminar was convened by a number of high-level delegates, to discuss which aspects of the post-1997 labour market strategy have been successful and what have been the most important failures? The seminar also explored why, despite the successful introduction of the national minimum wage the labour market was still characterised by low pay, low skill, and low productivity jobs. 

Sunder Katwala kicked off the discussion by noting that this event was being held in a drastically different country to the one inherited by the Labour Party when it came to power in 1997. Economic constraints now faced by the Coalition Government meant any decisions being made were seen through a severely restrained fiscal lense.

He also noted that there were many similarities in the aims of the Coalition Government to that of the previous Labour Government and that the dispute over employment policy was now in terms of what the right means to achieve these aims were, rather than the ultimate goal itself.

Lord Knight began his remarks by lauding the enormous amount of progress made by the previous Labour Government in terms of reforming the labour market. He argued that the New Deal had been a resounding success and that it’s successor, the Flexible New Deal was the right approach to renewing the Governments approach to welfare to work. 

He claimed that the performance of the job market following the financial crash of 2008 was “nothing short of a miracle” and that, in contrast with the recessions of the 1980’s and 1990’s, the unemployment level had confounded expectations by remaining relatively historically low. He attributed the success to measures such as ‘Backing Young Britain’ and the Future Jobs Fund which he argued had been crucial to keeping unemployment amongst young people lower than anticipated.

Furthermore, he claimed that despite criticism of its cost, the fiscal stimulus had worked and given a measurable boost to British industry.

He gave a cautious welcome to the Coalition Governments plans for a universal credit but warned that the plan was likely to “flounder on the rocks of the treasury”

He did, however, criticise the previous Government for being too concerned with the reaction of certain parts of the media and being too scared of vested business interests when dealing with employment policy. He also argued that it had been a mistake to not link employment and skills together in the Department for Work and Pensions – thus creating a single ‘pot’ and motivation to ‘upskill’ people.

Reflecting on the previous thirteen years in Government, he argued that the lessons for the current economic situation were that a growth strategy must be pursued above the need to drastically and immediately cut the deficit. He also argued that the Coalition Government should continue to pursue an active labour market strategy and lamented that it was not until 2008 that the Labour Government began to pursue this course.

He also suggested that the future of employment must be characterised by the continuing linking of welfare reform to a focus on skills and the development of more ‘social learning’ with greater emphasis on peer to peer learning. He did, however, acknowledge that there were challenges as to how to appropriately accredit these more informal learning processes.

He concluded by arguing that the key difference between the Coalition Government and the previous Labour Government was differing beliefs in how to create jobs in the economy. He argued that the Labour Government never believed that the private sector could provide job growth alone and that the Coalitions strategy would likely see a “jobs light” economic recovery.

David Coats opened his remarks by also praising some of the measures implemented by the previous Government. He praised the steep rise in productivity in the workforce but criticised the drastic disparity in this rise which had mainly been concentrated in the South and London, with the North and Midlands left somewhat behind.

He went on to criticise that, despite growth in employment, it was all to often simply moving people from welfare poverty to workplace poverty, with the employment market still all too commonly characterised by low skilled, low wage jobs. He claimed that this was coupled with stagnating wages for the squeezed middle and added up to a picture of a Government with no real plan to eliminate these low productivity, low paid jobs. He did, however, caution that it was not sufficient to blame the situation on levels of immigration and criticised those who claimed Government ‘red tape’ had stifled employers economic performance by saying that “there is simply no link between employment legislation and protections and economic performance across an economic cycle.” He noted that despite improvements in employee safeguards and protections, the UK still have one of the most liberalised employment markets in the western world.

He did sympathise with employers increasing exposure to litigation from employees and attributed the increased willingness to resort to tribunals to a decline in the role of trade unions in the workforce. He argued that the lack of institutions such as a National Labour Council meant both sides (employers and trade unions) were often “stuck in their trenches” with few mechanisms to communicate more openly about issues.

He went on to call for greater transparency from employees and urged the Government to ensure that businesses report on workplace issues such as employee satisfaction, trust in the work force and the gap between the highest and lowest earners in an organisation.

He went on to criticise the approach of schools to preparing students for entering the workforce. He specifically cited the lack of encouragement for students to collaborate on projects which therefore fails to develop key team working skills that are attractive to employers.

Moving to comments from delegates, one attendee noted that David Coat’s criticism of the education system had been far too timed and argued that “in the education system, we don’t need reform – we need revolution”, and claimed that the skills developed in schools were remote and detached from the needs of employers.

Additional comments focused on the need of the employment market to adapt to a rapidly aging population. It was noted that during the recession, the only group who expanding their labour market participation was those over the age of 60. There was also criticism that the vast majority of investment in skills training had been targeted solely at those under the age of 25 without allocating resources to ensure workers over the age of 60 had adequate skills to continue to participate in the workforce.

Kate Green MP pointed out that we must not forget that access to the workforce remains far more difficult for many people from BAME backgrounds and noted that the issue of gender inequality remains an issue for many. She called on politicians on all sides to be radical in their approach to tackling these issues and reforming employment in the United Kingdom.

Another attendee at the event noted that there was a need for greater access to flexible working to ensure people are not ‘under employed’ simply to ensure they have access to flexible working hours to fit around family and caring commitments.

The debate concluded with calls for greater co-ordination between businesses to ensure best practices are shared which would ultimately lower barriers for those most frequently excluded from the job market.

The Fabian Employment Series is a series of five seminars that aims to examine how employment policy can respond and adapt to new economic and political circumstances in this new Parliament, and the role it should play in contributing to a sustainable economic recovery. The next seminar in the series will be titled ‘Hardest to Reach? Improving access to employment’.