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

To report anything from the comment section, please e-mail [email protected]

Latest

  • Comment Featured Local Government Scotland Triumph in London and despair elsewhere: Corbyn looks safe for now

    Triumph in London and despair elsewhere: Corbyn looks safe for now

    Do you have a spring in your step today or simply a sprain in your ankle? After weeks of campaigning around Britain, Labour activists will this weekend slump into the bars or on to the sofa as MPs battle to put their seal on the identity of the real winners and losers from Super Thursday. Jeremy Corbyn defied expectations in English council elections but Labour suffered another dire defeat in Scotland and found its grip on power in Wales slightly […]

    Read more →
  • Comment Featured Jon Trickett: In Jeremy Corbyn’s first national test, we have beaten the Tories

    Jon Trickett: In Jeremy Corbyn’s first national test, we have beaten the Tories

    Back in April, I wrote on LabourList that “we should be looking for Labour to advance on the 2015 election results, where we finished almost seven per cent points behind the Conservatives.” According to the BBC’s projection, Labour has now closed that 7 point gap and achieved a one point lead across the country in yesterday’s elections. That means that in the first national test of Jeremy Corbyn’s Labour, we have beaten the Tories. It certainly represents progress, but it […]

    Read more →
  • Comment Featured Local Government Seats and Selections Uncategorized Burnham considering a run for Manchester mayor – so should he stay or go?

    Burnham considering a run for Manchester mayor – so should he stay or go?

    Andy Burnham is considering seeking the Labour nomination for the contest to be Manchester mayor, it emerged last night. The new post will be part of George Osborne’s “devolution revolution” settlement with Greater Manchester, which will see a host of powers for health, transport and planning handed to the region. Burnham is staying in the shadow Cabinet for now but, as he weighs up several approaches from local MPs, here are five reasons to stand for the mayoralty and five more […]

    Read more →
  • Featured Local Government News Scotland Wales Liveblog: Labour holds Salford mayoralty as hopes rise for Sadiq Khan

    Liveblog: Labour holds Salford mayoralty as hopes rise for Sadiq Khan

    We want to hear from Labour activists and supporters today so please send us your stories and pictures [email protected] The pick of the submissions will be added to the liveblog. 18.09: All of the constituency Assembly Members have now been elected, with Labour up one to nine AMs. They are: Jennette Arnold North East Leonie Cooper Merton & Wandsworth Unmesh Desai City & East Andrew Dismore Barnet & Camden Len Duvall Greenwich & Lewisham Florence Eshalomi Lambeth & Southwark Joanne […]

    Read more →
  • Featured Local Government News Corbyn: We are fighting inequality and forcing the Tories into u-turns

    Corbyn: We are fighting inequality and forcing the Tories into u-turns

    Jeremy Corbyn and his senior allies have launched a fightback after Labour failed to make a breakthrough in English local elections and suffered another meltdown in Scotland. Corbyn delivered an impassioned speech in Sheffield, where he attacked the Tories over their failure to deal with the steel crisis, condemned the running down of the NHS and challenged David Cameron to tackle tax avoidance. The Labour leader was in Sheffield Brightside and Hillsborough to congratulate Gill Furniss (above), one of two new Labour […]

    Read more →
Share with your friends










Submit