2014 03 – Editorial

Generation Politics

It has become fashionable to talk about politics as a battle between the generations, as if class politics has become obsolete. This suits politicians who wish to muddy the waters and prevent a clear perspective on the class realities of modern British politics. This is a trap which the Left should avoid falling into. Even talk in terms of abstractions such as ‘generation versus class’ is liable to lead into sterile and misleading discussions which avoid important and difficult practical political issues.

That said however, there are some very chunky issues indeed which concern British youth. Clegg’s recent comments about careers and jobs are a sign of the jumpiness over these questions which beset the Coalition. They are right to be concerned, particularly at the various fiascos of their own making, as well as the difficult problems that they inherited from Brown and Blair. The Coalition’s record on helping young people is truly abysmal. The abolition of the careers service, of the education maintenance allowance and the festering shambles of vocational education can be laid at their door. In addition the looming disaster of a failed student loan scheme has to be considered. The two sets of issues are closely connected.

Why do so many young Britons go to university and so few into good quality vocational education or apprenticeships? To answer this we must ask why are there so few good jobs in Britain. And the brief answer to this question is that too many employers are content to offer a low quality product produced by a poorly paid workforce and they are too ignorant, too complacent or too comfortable to do otherwise. No serious pressure is exerted on them to do better by government and the welfare system is at least as much a welfare system for poor employers as it is for workers and their families.

Lack of opportunities for young people leads to intense labour market competition. The route into adult life that schools and middle class parents understand is via university. It is a clear pathway with heavily subsidised financial support. It is also largely unplanned. Irrespective of the needs of the country, students can study pretty much anything they want if they have the right qualifications and universities try to respond to demand as best they can. This is very wasteful both for the students and their families and for the state and society.

We now have a situation in which there is a large mismatch between the abilities that employers require and the qualifications that young people have. In many cases a degree signals to an employer that a young person has a certain degree of diligence, while suggesting that those who do not have one, other things being equal, will not be such a good bet as an employee, even though the job on offer does not require the ability and knowledge that a degree is said to provide. Consequently, many graduates have and remain in ‘non-graduate’ jobs.

The consequences for non-graduates is that they are forced into less attractive jobs, while those with no qualifications find it hard to obtain even unskilled work. The youth labour market has become a kind of trap which one can only avoid by getting a degree. This is a dreadful situation which leads to a high rate of youth unemployment and the persistence of far too many low quality jobs.

But there is a further twist to this tale. Because all the political parties think that having a degree is a personal benefit to the student, they think that the beneficiary should pay full tuition fees and maintenance. So students have to take out loans of £50,000 to pay for a degree to get a job which may well not require one. These loans are funded by the state, which expects to recoup them with compound interest over a thirty year period. Until quite recently the expected default rate was around 30%, now it is reliably estimated to be in the high forties, in effect making the loan scheme for financing university education politically and financially unworkable.

So far, no-one in government has admitted this but we can be sure that they will find ways to save face and save money that is being poured into a black hole. Why on earth pay money for loans that will never be repaid instead of just paying for the university place? Labour has cottoned on to this and will probably make a proposal along these lines. The Coalition will have to respond as best they can.

But these problems are in any case the problems of a fundamentally mistaken policy. There is no good reason to suppose that anyone (apart from university employees) benefits from the extremely high rate of university participation. In fact, there are a lot of losers, including in many cases, graduates themselves. Universities have become a convenient parking lot for problems that the political parties are unable or too frightened to deal with, in particular the problem of providing a labour market with good jobs that will give young people an incentive to undertake good quality vocational education. This means obliging employers to take on some responsibility and to be less dependent on government for subsidies. This contradicts the conventional wisdom of our three liberal parties who collectively think that whatever the private sector wants they should get.

Until Labour is pressurised by the trade unions into adopting a more critical stance towards employers it is unlikely that they are going to do much, even to the extent of providing apprenticeships in government services or obliging firms on government contracts to provide apprenticeships. If they are at all interested in getting young people to vote then they should be addressing these issues.

It is obvious that there are many difficult problems that hang together: too few good jobs; too much subsidy for bad jobs; too many graduates; too large loans to students; not enough good vocational education. These all need to be dealt with in relation to each other. For example, weaning poor employers off subsidies for poor jobs and encouraging those who are prepared to offer good jobs, without jeopardising current youth employment and finding a suitable way of financing university education without creating an oversupply of graduates, are both tricky questions which require careful thought and long term planning as well as a large dose of political courage.

There is little in the behaviour of the Labour Party over the last thirty years that would give us much cause for hope that careful thinking, long term planning and courage are likely to be on display in the near future. But anyone who professes any concern for the well-being of young people ought to admit that they are currently being treated shabbily and deserve a much better deal than they are getting. To say this and then do nothing about it is simply hypocrisy.

The final tricky issue in play here is migrant labour. As we have noted in the past, many migrant workers are well-qualified and it is too easy for British employers to take a ‘free lunch’ of someone else’s investment in vocational education. This makes it even more difficult for British young people to gain a foothold in employment. But migrant labour is here to stay, the only way in which the position of our young people can be improved is by providing them with the high quality vocational education that their contemporaries in many parts of Europe enjoy.

Again, it is noteworthy how few party politicians want to get to grips with this. Even Nigel Farage, who understands, unlike some Tories, that you cannot at the same time lambast British workers for laziness and then moan about too much immigrant labour, will not be prepared to tackle this issue, for the reasons mentioned above. Step forward our trade unions.

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