2015 03 – Creating Good Jobs


Creating Good Jobs: What Labour needs to do.

by Christopher Winch

Last month’s editorial focused on the decline of the number of good jobs in the UK and its association with the deterioration of vocational education and the careers service over the last 35 years. This decline paralleled that of the trade union movement over these years, indicating that, inadequate though it is and was, trade unions are an important means of maintaining a labour market in which working people have a chance to get decent jobs.

We have criticised the Labour Party over its inaction on these issues in the past. Last month, Chuka Umunna, Labour’s Shadow Business Secretary launched a debate on the revival of apprenticeships. Yet again, the issue has resurfaced, previous initiatives by both main parties having run into the sand. Will it be any different this time? Umunna wants to create lots of high quality, level 3 apprenticeships and to ‘protect the brand’ by restricting the term ‘apprentice’ to these forms of vocational education which are rigorous and last at least two years. By the time the debate had finished however, he was in retreat on this issue, confounded by the confusions that Gordon Brown and Ed Balls had created when they were last in charge of this area.

Over ten years ago, Brown and Balls thought that it would be a very clever idea to call all sorts of low grade training ‘Apprenticeships’ in the hope that voters would think that they were doing something useful about ‘skills’. The Tories attacked Labour for this jiggery pokery at the time, but once in power they also thought it expedient to muddy the waters to obscure their own failure to do anything useful, by using exactly the same obfuscating terminology. As the debate showed, it is now almost impossible to say anything sensible in this area without getting into the most arid and misleading semantic squabbling. Umunna has been hoist by a petard fired by his colleagues Brown and Balls. This led Vince Cable to claim that the government policy on apprenticeships is a huge success because of the increase in raw numbers (which include low level training and retraining within firms), because they are all called ‘apprenticeships’.

It is worth stepping back and reminding ourselves why there are such a lot of bad jobs in Britain and why there is so little vocational education.

  1. There is a huge subsidy for low paid, low skill work effectively paid for by the taxpayer through tax credits. Employers are implicitly encouraged to adopt a business model that minimises their obligations to move up the value chain and to value their employees.
  2. Lax labour regulation which allows easy hire-fire and casualization, including a growing sector of casual agency work and sub-sub-contracting, again leading to a lack of commitment on the part of employers to develop and look after their workforce.
  3. Immigrant labour which has tended to increase the proportion of part time and short term work, since immigrants are prepared to work in these conditions and give employers an incentive to create those kinds of jobs.
  4. Very weak regulation of vocational education and training.
  5. A supine attitude from politicians of all parties to employers and the aspirations that they have for their workforces.

Small and medium businesses cannot apparently be criticised as they are dying under a strangulating tangle of ‘red tape’. Therefore their lack of effort to develop future generations of the workforce is met with by an understanding nod. ‘Skills shortages’ are referred to as if they were an Act of God, rather than the improvidence of employers. Unfortunately, Umunna’s proposals do not address these issues. He proposes being much tougher with firms on government contracts, so that they will have to provide vocational education as a condition of contracting with the government. This will help, but if he is not willing to drive that deal down the supply chain of the contractors then it is hard to see that a great deal of difference will be made. Labour’s efforts in this area, like those of the Coalition look like a sham.

A party that was committed to this issue and not afraid of being told that it was ‘anti-business’ or indulging in ‘class warfare’ would be actively thinking about the following measures to improve our abysmal record in creating good jobs through improved vocational education.

It would be thinking about:

  1. Phasing out tax credits and reallocating funding to investment in high skill work.
  2. Raising the minimum wage to a living wage, to reduce usage of tax credits by employers and to encourage them to develop their workforce instead.
  3. Making it more difficult to hire-fire and casualise labour through legislation which better protected employment rights.
  4. Making sure that government contracts enforce apprenticeships throughout the supply chain, when firms contract with government.
  5. Giving Small and Medium Enterprises support in taking on apprentices through helping them through the procedures for doing so.
  6. Supporting Small and Medium Enterprises in moving up the value chain through favourable loans to those that wish to do so.
  7. Imposing a National Insurance charge as a levy on firms for providing apprenticeships (they can be exempted if they can demonstrate commitment by already having programmes in place). Given that apprentices pay for themselves, firms should be making money after three years of involvement in such a programme.
  8. Cleaning up the apprenticeship brand with higher minimum standards and an educational as well as a technical and vocational element.
  9. Encouraging unions to monitor and help to run vocational education and training.

We have every confidence that such moderate social democratic measures will not be adopted by the Labour Party. It is far too near its New Labour mentality to do anything that might appear even slightly controversial. The only way in which they could possibly be adopted would be if the trade union movement made it a condition of funding that it adopt such a programme. But there seems to be little chance of that. The movement has handed £5 million to the Labour Party for the upcoming general election with no apparent commitments from the Labour Party on these or any other obvious issues.

Miliband is fond of saying that you should not get ‘something for nothing’, but he seems to get away with it every day in relation to those whose interests he is there to represent. For this and other reasons we are reasonably confident that Labour will lose heavily in Scotland and fail to obtain a majority in the UK in May’s general election.