An economy that speaks to the Nation

14th November, 2012 6:11 pm

At this year’s party conferences, politicians of all colours spoke to the deep sense of economic uncertainty that pervades the nation. David Cameron argued in his speech that we are facing a watershed moment, when Britain can either sink or swim. In contrast to New Labour’s reluctance to challenge the economic orthodoxy of the day, Ed Miliband’s One Nation narrative suggested that an economy that works for working people is in Britain’s reach. But what would it take to deliver?

The New Labour government cared about growth, but little attention was paid to the nature of that growth. The thriving finance sector, grown fat on profits made possible by deregulation in the 1980s, masked the slow strangulation of Britain’s real economy. Over this period, the vast majority of bank lending supported the growth of personal debt rather than the private sector. The lesson most on the Left have taken from the overreliance on finance is the need to reverse the 120 year decline of the British manufacturing industry. A healthier sectoral balance – and thus hardier balance sheets – will certainly require a more competitive export sector. But an economy for ‘One Nation’ would have to be far more ambitious than this.

In reality, high value manufacturing and other high skill, high tech sectors generate very few jobs. The rediscovery of Great Britain’s industrial past, much like Tony Blair’s fêted ‘knowledge economy’, bears little relation to the lives of most working people. It says little to the two and a half million people whose skills are being wasted in unemployment, and nothing to the significant proportion of workers in low-skilled, low-paid jobs in the service sector. We may wish otherwise, but the UK’s largest occupational category is shop assistant, not engineer. A One Nation economy must also seek to offer those working as cashiers and in call centres, care homes and construction sites opportunities to use their talents and creativity at work.

To paraphrase Bobby Kennedy, just because we inherited the world as it is, it does not mean that this is the way it should be. In other northern European countries, many jobs that we view as entry level require a lengthy period of apprenticeship. The standard qualification for construction workers in England checks whether students are able to lay bricks and blocks. In Germany, builders train for at least three years and are expected to develop broader skills such as carpentry, civil engineering and management, as well as studying related academic subjects such as physics and maths. Lorry drivers are trained in logistics and foreign languages. Even shop assistants often complete an apprenticeship, learning all aspects of how the business works.

While the UK cannot import the vocational systems of northern Europe, a focus on the means and aims of production across the economy would enable more British workers to find a sense of pride and purpose through their work. This is not just about vocational qualification reform. Unless we also support employers to rethink their business and human resource strategies, we will simply end up with even more overqualified young people stuck in dead end jobs.

Lazy statism will never be capable of shifting capitalism in a new direction. Sector and firm level interventions work best when they are rooted in the operational knowledge of employers and employees. The car industry for example benefits from membership bodies such as the Automotive Sector Strategic Alliance, which supports suppliers to raise quality by providing tailored business advice and training. In the 1980s and 1990s, the Electrical Technical Colleges under the Amalgamated Union of Engineering Workers (now Unite the Union) provided training to most major employers across the country. Crucially, the colleges also worked with managers to redesign jobs and work organisation and so ensure employees’ new skills were utilised in the workplace. Some unions, when prompted by the need to resist job losses, have also promoted alternative, more innovative and diversified business strategies.

How should Miliband embark on this ambitious agenda? As a first step, a new Vocational Fund could promote collaborative and experimental approaches by unions and employer associations to raise business performance and job quality in different sectors, occupations and locations, underpinned by the sort of patient finance provided by national, sectoral or regional banks. Over time, successful initiatives could be extended to act as guilds, with the power to design vocational qualifications, set training requirements, and provide finance and advice to support social and work innovation in their sectors. In some industries, particularly those such as care where high standards are vital to consumer wellbeing, being a member of these new vocational institutions could be compulsory.

The dearth of trade unions in the private sector should not distract from the fact that employees are crucial allies in a One Nation economy. Cooperative and mutual forms of ownership and business cultures that encourage workers to participate in decision-making are characterised by fairer pay, higher levels of trust and greater employee commitment to company success. Thus wider reforms to promote new democratic models of finance, governance and ownership are also required. In most other European countries, employees are represented on company boards of a certain size, and in the USA, employees have a ‘Right to Buy’ when the owners of a privately-owned company decide to sell the business.

Our biggest asset is the people of Britain and we need to construct an economy that is rooted in their creativity. If Miliband’s One Nation economy can set Britain on this path, British workers may yet swim.

Tess Lanning is a Senior Research Fellow at IPPR

This piece forms part of Jon Cruddas’s Guest Edit of LabourList

Latest

  • Featured Latest Ashcroft poll shows Labour making ground in England – but facing wipeout in Scotland

    Latest Ashcroft poll shows Labour making ground in England – but facing wipeout in Scotland

    After the Ashcroft constituency poll of Scottish seats exactly a month ago I said that Scottish Labour is going down in flames, and taking Miliband’s chances of a majority with it. Today’s latest Ashcroft poll has done nothing to put out those flames, or suggest Scottish Labour is performing anything other than a catastrophic nosedive. Except now it almost feels like everyone has adjusted to the “new normal” whereby a Labour heartland is now a Labour wasteland. We’ll get back […]

    Read more →
  • News Video Broadcasters to Cameron: Tell us a date you can do for head-to-head debate

    Broadcasters to Cameron: Tell us a date you can do for head-to-head debate

    Broadcasters appear to be losing their patience with David Cameron’s attempts to get out of appearing the pre-election TV debates. It is widely understood that Cameron has been advised by strategist Lynton Crosby not to take part in the leaders’ debates and has been dragging his feet during negotiations, making more debates each time broadcasters make new proposals. Following the initial invitation of UKIP to appear, Cameron claimed that the Green Party should also take part. Now the Greens, SNP […]

    Read more →
  • Comment Tactical voting: unless we are an open tribe, we will die

    Tactical voting: unless we are an open tribe, we will die

    So Compass holds a debate about the relevance, or not, of tactical voting in the run up May and straight away John Spellar MP and then Luke Akehurst are on to us. John accused us of calling on people ‘not to vote Labour”, Luke says we are ‘naïve’. Well first lets be clear: we have set up the space on our website for a debate; we have one article for tactical voting and one against. We wanted to see what […]

    Read more →
  • News Cooper says “slippery” Farage’s immigration speech will increase division

    Cooper says “slippery” Farage’s immigration speech will increase division

    Yvette Cooper has accused Nigel Farage of attempting to exploit concerns about immigration rather than attempting to come up with practical policies. The Shadow Home Secretary also derided UKIP for getting themselves in a “ridiculous tangle” on the issue – last week a spokesperson for the party said they would introduce a net migration target of 50,000, while Farage today claims that it is not party policy. This follows Ed Miliband attacking David Cameron for missing his 2010 immigration promises […]

    Read more →
  • Comment Featured PMQs Verdict: Nevermind what Cameron said – it’s what he wouldn’t say that matters

    PMQs Verdict: Nevermind what Cameron said – it’s what he wouldn’t say that matters

    There are only three PMQs left until the election. Three more of these turgid, unattractive, unedifying and borderline pointless sessions to sit through before May. If this is the highlight of the Parliamentary week then Parliament can’t prorogue quick enough, frankly. Evidently many MPs feel the same, judging by the wide open spaces on the green benches this lunchtime. After a few minutes MPs had all spaced themselves out a little bit to make the place look a bit less […]

    Read more →
Share with your friends










Submit