General Election 2019: Employment is out of the news but jobs could define the next five years
2 Dec 2019
Tony Wilson, Institute Director
When Britain goes to the polls next week, unemployment will be its lowest on any election day since October 1974. So it’s no surprise that jobs have not loomed large in this campaign. But having read and reviewed all three main parties’ manifestos, there are three big stories on employment – which in different ways could come to define the next five years.
1. Whoever wins, they want to make work better
With more people in work than ever before, Britain’s ‘jobs boom’ has been the labour market success story of the last five years. But the market hasn’t defied gravity: anaemic growth means that high employment has been accompanied by low pay and often insecurity. So more of us are working, but fewer of us feel better off.
As job quality, security and pay have come under increasing scrutiny, all three parties have sought to address this in their manifestos. These manifestos say far more about the symptoms of insecure work rather than the cause (i.e. our chronically low productivity) and on the face of it they have a lot in common: all propose a new, stronger, single enforcement body (welcome in principle, more on this here); support for flexible working; and higher minimum wages. But the similarities end there, and the differences – in tone, detail and extent – are important if not surprising.
For the Conservatives, the firm commitments on job security are positive but relatively modest: committing to continuing to implement many of the recommendations of the Taylor Review, but falling short of implementing them all. No mention, for example, of raising minimum wages for those with non-guaranteed hours, nor of a right to return for those who have been off work due to ill health. On flexible working, there’s a welcome pledge to consult on making this a right to have rather than just request flexibility – although the furious reaction to Labour’s plans on this suggest that any consultation won’t be straightforward.
The Lib Dems go much further – in effect committing to implement all of the Taylor Review (including on setting a higher minimum wage for those on zero hours contracts), implementing a right to flexible working in most cases, and strengthening trade union laws.
But unsurprisingly, Labour offer the most radical reform – statutory collective bargaining, banning of zero hours contracts, rights to fixed hours, a ban of unpaid internships, day one employment rights, an end to ‘bogus’ self-employment, improved protections for the self-employed, requirements on employers to take action on gender pay and report on disability pay, strengthened rights and support at work for disabled people, the right to flexible working and stronger powers for trade unions.
Behind these differences are clearly very different views on the labour market itself, but also a fairly straightforward choice – how much of the UK’s flexible labour market are we prepared to trade off for more pay and security? And if this leads to fewer people in work, how many is too many? This isn’t an academic question. For example recent research that we did for Centrepoint, hearing from homeless young people in insecure work, gives a good insight into the issue. Those young people reported money problems, uncertain hours, short-term contracts and often very low awareness of their rights – insecure work was part of the problem. But they also reported that this work was easy to find and that they’d taken it up because they couldn’t get into more secure, permanent employment.
Furthermore, our work on the gig economy and on flexible contracts has shown that for many people atypical work is a positive choice - while the Labour Force Survey confirms that the large majority of those in temporary work or self-employment do so because they want to (with just one in four temporary employees and one in eight of the self-employed wanting out).
So as the Taylor Review put it, the key question is not whether atypical work should exist, but rather “whether vulnerable workers, or those with limited choice, are adequately protected” – which points to a more nuanced approach than any party is proposing, targeted at protecting specific groups and with more tailored enforcement.
2. For those out of work who want to work, it’s slim pickings
One consequence of this not being a ‘jobs’ election is that for the first time in at least thirty years, not one of the party manifestos contains any significant commitments on improving employment support for those out of work. Which is pretty remarkable, and concerning.
Despite employment being close to record levels, the job on employment participation is far from done – with 1.9 million people who are ‘economically inactive’ stating that they want to work, an employment ‘gap’ for disabled people that’s equivalent to 2.2 million more disabled people out of work, and one million young people neither working nor in full-time study.
Perhaps surprisingly, the Conservative manifesto actually says the most on employment support – pledging that the replacement for European-funded programmes will “as a minimum match the size of those funds”, more support for prisoners and veterans, and a National Strategy for Disabled People next year that will include a strategy for employment. However their 2015 pledge to halve the disability employment gap (already watered down in 2017) has now become a commitment just to reduce it. Given that this gap currently stands at 29 percentage points (and just half of disabled people are in work) this is pretty thin gruel.
Labour proposes extensive reforms to the benefits system (which I’ll cover in another blog) as well as some good ideas on in-work support for disabled people. But for those out of work the manifesto only makes one small commitment, to bring back specialist employment advisers. The 2017 pledge to halve the employment gap has gone, as have the proposals for new local, specialist employment services. (The Lib Dem manifesto, meanwhile, says nothing at all about employment support).
Across all three manifestos, the strong implication is that it will be skills and training – rather than active labour market policies – that will do the heavy lifting on employment (more on this below). But while this renewed focus on adult learning and skills is welcome, any direct employment impacts of this investment will be modest at best.
This absence of reference to employment support will be of particular concern to those who currently deliver these programmes for government. This market has changed a lot over the last five years as funding has fallen (by around three quarters) with many larger providers exiting or folding, with charities and the voluntary sector accounting for a growing share.
Figures for the main employment programme - the Work and Health Programme - were published on Friday and make for concerning reading. With this up for renewal during the next Parliament, there will growing concerns about what - if anything - will replace it. And if we face a recession during the next Parliament, as is increasingly likely, then these concerns will only intensify.
3. We need to talk about the workforce
Finally, all manifestos pledge eye-watering amounts in new infrastructure spending (£400 billion for Labour, £100 billion for the Conservatives and at least £60 billion for the Lib Dems), hundreds of thousands of new homes and more recruitment into public services. And while these commitments would add up to literally millions of new jobs across construction, energy, engineering, transport, health, education and so on, far less is said about where these workers will come from - particularly if rules on immigration are tightened.
For the Conservatives, the main commitment is a new, £3 billion ‘National Skills Fund’ which will replace and expand the (embryonic) National Retraining Scheme. This will likely have a greater focus on training for those out of work or returning to work, and will provide match funding for small and medium employers. Labour propose to spend a similar amount in delivering a new lifelong learning entitlement of free training to Level 3 and up to six years’ training at higher levels, alongside a Climate Apprenticeship programme and bursaries for employers that take on apprentices from disadvantaged backgrounds. The Lib Dems however have perhaps the most radical approach: with proposed Skills Wallets of up to £10,000 for all adults, reform of the Apprenticeship Levy into a wider Skills and Training Levy and a new Social Mobility Fund.
To reiterate, this focus on training and skills is welcome. But none of the proposals will be enough on their own to meet the recruitment and workforce challenges that employers will face in the current labour market, and in the case of many public service jobs (health, police, education) it will take years for the benefits of this training to be felt. Furthermore, as we’ve set out before, workforce planning is about far more than just skills. Whoever wins, we should expect delays.
So whoever forms a government will face three big employment challenges: improving job quality, raising participation and meeting workforce needs. These are linked: ultimately, if we want more people in better work then we need to boost growth and address the long-running ‘productivity puzzle’ - which in turn means delivering on public investment and skills reform (among other things). Whether any party can achieve this, while dealing with potential headwinds from Brexit and a global slowdown, remains to be seen. This may not be a jobs election, but for all sorts of reasons the next five years could well be a jobs Parliament.
Any views expressed are those of the author and not necessarily those of the Institute as a whole.