This is Newbury Labour’s submission for Economy, Business and Trade to advance the policy framework set out in Labour’s 2017 General Election Manifesto.
For Further information visit https://www.policyforum.labour.org.uk/commissions/work
The Future of Work
Formal Submission from Newbury CLP
Changing overall landscape
- Technology is driving significant changes in how, where and how much we work. Automation is accelerating, many current sorts of jobs at all pay levels will start to disappear, even “professional” jobs. Technology is increasing driving the provision of goods and services through new platforms such as Uber which are dominating the market. Robot vehicles will eliminate many driving jobs. Chain high street jobs will start to disappear through the competition of online shopping.
- Technology is changing the shape of our economy and what is profitable or productive. Platforms such as Uber, AirBnB and Facebook, are simply the interface between product/ service and consumer, and without owning any asset or stock, they’re the most profitable companies in their traditional industry.
- Flexibility in employment is now the accepted norm. Jobs for life have gone and people now expect to change jobs frequently, grab fixed term contracts etc when they can and endure periods of unemployment. Loyalty no longer exists either from employers or employees. Sense of vocation and service are generally being lost, people are just motivated to work to try to pay the bills. Young people have no expectation that it could be any different but do have high expectations of travel and other benefits through their employment. Some of the flexibility has been positive e.g. more opportunities to work from home. People will work differently and less.
- Self employment is becoming the norm for many people and is being exploited by hiring organisations to avoid key employment protections, payment of National Insurance etc. This abuse is happening in all sectors and at all pay scales.
- People in work tend to work long hours, covering the work of more than one person, whilst others languish unemployed. This is not good for the mental and physical health of either group.
- Flexibility in the job market has reduced incentives for employers to provide in-house training
- Digitisation and automation of our money supply, and the failure of legislation to keep pace with these developments, is driving increasing inequality, continually concentrating wealth in the hands of a smaller number of people, and making profits easily transferable to tax havens etc. Money itself is now digitised and disguised in complex financial structures and products making it difficult to tax. Huge, unaccountable mega organisations will tend to control enabling technologies and dominate markets Digitisation has allowed banks to once again create money (by creating debt i.e. loans); reducing the amount the Treasury collects for the public purse through printing physical money. When the debt has been repaid to the bank, that demand deposit effectively disappears; leaving behind the interest that often ends up in offshore tax havens and not aiding our public services or infrastructure.
- Education is key to supporting the new style of economy. Life long, free access to education and skills training should be available for every citizen. However provision must be planned to address evolving economic needs, not left to random choices by individuals, so that people can be guided to retrain and get work in new areas. It must plan for how people can be trained to add value to technologies driving employment changes.
- The Gove designed overly traditional curriculum in schools needs to be changed so that people learn relevant skills e.g. politics, citizenship, finance and how to think communally, creatively and entrepreneurially, early.
Contracts and working conditions
- Stronger working time regulations are needed limiting working hours. If an organisation is consistently requiring unpaid overtime from its employees then it clearly needs to hire more people. Labour should introduce a France-style working week of 35 hours but unlike France this wouldn’t be a total ban, instead (as is done in many countries including USA) any hours worked over the 35 would be paid a minimum overtime rate of at least 1.5 x the set hourly rate.
- A minimum and preferably living wage should be non-negotiable. If an organisation can’t pay the minimum wage for hours worked then its business model isn’t viable. The taxpayer must not be expected to subsidise hours of work. Labour policy to enforce a £10 an hour living wage minimum wage for all ages is sorely needed.
- Pay needs to be more regulated. There should be a clear allowable multiple between the highest and lowest paid employees in any organisation. Bonuses should be distributed equitably to all employees, not just senior managers. Bonuses should be allowable and encouraged for getting positive results generating win wins, and never allowed for cost cutting that makes people unemployed. If a company needs to downsize and lose staff there should be NO financial rewards for this for managers.
- Flexible employment enabling good work life balance e.g. more home working, should be encouraged, could also help cut commuting and so help meet carbon emission reduction targets.
- Current productivity statistics show a U.K. worker is notionally producing as much in 5 days as German and French workers achieve in 4. There is scope for driving up productivity in a way that can maintain output whilst delivering greater work-life balance with all the public health benefits such a reduction would bring. In addition to a 35 hour week Labour could run (in public sector bodies and with businesses who are interested) a trial of a 28 hour week.
- Labour must support the anti-casualisation movement, insist that the minimum fixed term contract be one year, alongside banning zero hours contracts, thus preventing a race to the bottom with flexible working. Employment regulations should eliminate bogus self employment.
- Unions are co-stakeholders with employees and employers in building success, this needs to be positively branded and promoted to businesses. It is already proven that unionised workplaces have better health and safety and other work conditions, and that collective bargaining achieves fairer pay. Regulations need to support trade unions in the workplace and bring non-unionised workplaces into the fold. Labour should commit to working with the TUC to deliver auto-enrolment into a trade union for all workers, as proposed by the IPPR (https://www.ippr.org/blog/automatic-enrolment-for-the-people-the-case-for-radical-action-to-reverse-the-decline-of-trade-union-membership).
- Gender equality in the workplace must be reinforced by tough regulation that includes detailed gender audits of individual employers. Labour should commit to Iceland-style new laws to fine employers who fail to reduce pay inequalities between genders (https://www.independent.co.uk/news/business/news/iceland-gender-pay-gap-illegal-men-pay-more-women-income-salary-earn-a8139141.html) and should reduce the current reporting threshold (250 employees) to cover all companies with more than 100 people on the payroll.
- Differences in pay tend to be reinforced during recruitment when applicants are asked to declare their salary histories. This tends to favour men in subsequent salary offers reinforcing lower pay for women over their working lives. Legislation must stop applicants from being required by recruiters to declare this, and all jobs should be advertised with transparent details of the salary package that will be on offer to all applicants.
- A major barrier to work remains childcare. Labour’s 2017 manifesto pledge to extend 30 hours care for all 2-4 year olds must remain in place and we should formally adopt the suggestion in the 2017 manifesto that we could commit to 15 hours free care for all 1 year olds. Furthermore paid parental leave must be extended from 9 months to 12 (this was promised in Labour’s 2005 manifesto but never delivered!!). We should also seek to follow the Welsh Labour Government’s example where they are planning to introduce free care not just in term time but year round (48 weeks a year).
- Labour’s 2015 and 2017 pledge to extend ‘Paternity Leave’ to 4 weeks should be extended further to 6 weeks and shared parental leave pay should be raised to 12 months at 75% of prior earnings to be more similar (though still inferior to) Sweden.
Benefits, pensions and taxes
- We must recognise that people will be naturally more part time and in and out of work more frequently between contracts. The benefits system must recognise this and make it easier and non- judgemental for people to claim support. This could be done digitally with no need for invasive interviews at Job Centres but with other means of access for people without digital connectivity. Long term workless claimants should also be treated non-judgementally but offered additional support, advice and training. No-one should be hounded into work, the needs of people with disabilities and health issues must be respected.
- Serious consideration should be given to a Universal Basic Income payment for all citizens, modelled on the new flat rate state pension and child benefit prior to the Osborne means-testing reforms, in order to simplify the benefits and student finance systems and provide practical support for entrepreneurs and people working in a flexible job market.
- The issue of pensionable age needs to be re-examined. Recent rises in pension ages force older people to work longer thus reducing employment opportunities for younger people. Pension eligibility ages need to be reduced and be the same for men and women, perhaps age 65. Pensions also need to be made more viable by reducing opportunities for people to take out money from their funds pre-retirement and make it easier to pay into pensions that are better regulated and cannot be undermined by rogue employers. Labour should develop plans to implement Dutch-style CDC schemes as the norm to replace Defined Contribution pension schemes which have become the standard and load all risk on the employee rather than sharing it between employer and employee.
- At least 1million workers in part-time work are seeking full-time opportunities (http://uk.businessinsider.com/ons-underemployment-double-unemployment-rate-2017-9). Yet the tax system, with its thresholds for National Insurance Contributions, encourages employers to hire large numbers of workers on low wages and low or no hours contracts to minimise their NICs. Labour should reform Employers NICs away from a tax levied on each individual and instead use the model of the Apprenticeship Levy to create a new Levy on total payroll including benefits-in-kind.
- Labour should conduct a review of potential taxes on profits arising from automation to avoid wealth concentration, encourage organisations to hire people instead, and to possibly finance a Universal Basic
- Financial and tax legislation needs to be reviewed and catch up with the realities of digital money. We should put forward legislation to ensure that in the digital economy the money creation process sits with the state and not with commercial banks. This should reduce the amount of debt in our economy; and the reliance that citizens have on it. In turn, this should prevent money from being siphoned away from our economy and communities in the way it currently is today.
The broader economy and government
- Large companies are too removed from communities, we need a strong drive to localise our economies and provide support for SMEs, family businesses, co-operatives and other community initiatives generating local jobs, products and services and ploughing profits back locally. This could be a key responsibility of Local Authorities and funded by Labour’s proposed new banks. Bold visions might include setting up cooperatives of local builders to compete with large construction companies bidding to build social housing. New initiatives that procure local companies to do work and keep profits in the local economy (such as that currently being put into action by Labour in Preston) should be replicated throughout the UK.
- School students should be helped to gain work experience in such organisations and be the future leaders in this sector.
- Outsourcing of public services must end, be brought back into the public sector and other not for profit organisations, and all profits ploughed back to generate jobs and better services. Community owned not for profit companies could be created to provide public services and support vibrant local economies.
- Staying on top of technological and market developments is tough, we need Trade Commissions for every sector e.g. telecoms, that get all stakeholders together to collaborate on employment issues.
- Government itself needs to become more agile to cope with a changing world. Serious efforts should be made to reduce bureaucracy and restore staffing levels and morale to improve services.