How Labour should rule: low pay and low skills

How should Labour rule? In this election campaign we’ve got a critique and some policies. Come May 7 we’ll need an approach to government. Over the next few weeks I’m going to use this column to outline what Labour in power should mean in practice.

For me, the story is about supporting people to make our own way in life. Labour’s ruling idea should be liberty. We want a society where we have the freedom to be what we want to be, and where the work we put into making our own destiny is rewarded with a good life.

As I’ve argued before, Labour’s idea of liberty starts with the fact we have free will but are always also dependent on others. As human beings, we are defined by our capacity to shape our own destiny. But it is our existence with others that give us our sense of who we are and what we want to do with our lives. Most of us who do jobs we love had a role model, an inspirational teacher, someone who pointed the direction. Government, of course, can’t provide that role. But it can help make sure our relationship with the institutions that are vital to our lives – schools, colleges, workplaces, healthcare – is supportive not dominating. There should be a simple test for every government action: does it help increase our feeling of dignity, or does it take control out of peoples’ hands.

In power Labour needs to relentlessly focus on the basics needed to make our own way in life– a good job, housing and health. This week I want to start with work.

Labour’s argument is that Britain’s economy under the coalition is on the wrong track. The Conservative-led government saw low wage, low skill job growth as the only viable route to economic recovery, gambling that unrestrained corporate power and relatively low taxes would drive employment up. Britain is out of depression – but living standards are still stagnant. It is astonishing that this government celebrates the fact that average incomes have recovered to 2010 levels.

Our promise in this election campaign is to use the power of the state to block the worst excesses of this approach, banning zero hours contracts and increasing the minimum wage. But that won’t be enough to change the game. We need to think more positively about political power, using it to reshape the institutions that support people into good work, not just ban and block.

A good job is a vehicle for aspiration, but aspiration is about finding a way of life that gives us satisfaction, not just the relentless striving to accumulate. The key concept should be vocation – an occupation which gives us a sense of meaning and self-worth, not just money – but it is an idea our current low wage economy annihilates.

Our low wage economy has three roots: a workforce that has low skills, a financial system where credit for expansion is hard to come by, and a structure of corporate ownership that gives no incentive for big firms to put back into the communities they make money out of.

Vocational education needs to a Labour government’s first priority. Britain currently has a big skills gap, with too many people taking qualifications in areas where there’s no prospect of a decent career. The problem is a school and college system that has little link with work, and where institutions have an incentive only to make sure students pass exams. FE colleges are training too many beauticians and not enough electrical technicians, for example. 9 out of 10 British firms recently surveyed by the British Chambers of Commerce thought school leavers had poor skills. Politicians of all stripes lament the decline of British manufacturing yet engineering firms find it impossible to hire a decently trained wireman.

Successive governments have not helped. Labour in power raised the school-leaving age, but had no coherent approach to vocational training. This government has created a more systematic approach to qualifications, but has cut the support for careers advice. Apprentice numbers have rapidly expanded, but too many are just re-badged training schemes. The Conservative Party’s plan to freeze 5-15 year old education will lead to a 13.4% cut in funding for 15-19 year old education if they win an outright majority. If we have to cut, I’d rather shave a little off early secondary to invest more in the point where young people transition to work.

We need a more systematic approach to 14-19 education and 19-25 year old vocational training, as the recent IPPR report Moving on Up argues. Instead of the current mess, that means a single set of institutions and standards for all students, and a curriculum that includes both vocational training and general education for those on a vocational path. Our current FE colleges are failing badly. Building on our promised vocational baccalaureat, we would create a nationwide network of new technical colleges with a clear purpose of getting people into high skilled work, which high quality careers advice at their core.

There needs to be a national framework. A Labour government should agreed through a year-long process of negotiation between politicians, business and education providers – a national vocational convention, lets call it. Then, devolution of responsibility for building and leading vocational institutions needs to be devolved to city and county authorities. Local politicians and business-people have a far better chance of understanding local economic conditions than Whitehall. This needs to be one of the few areas where Labour needs to make a case for rolling back austerity, arguing that investment will bring a future return.

At the moment, vocational education is the ugly sister to university-based higher education. In these anxious economic times, many 18 year olds want to learn a trade rather than do a degree, but find the only path possible is to go to university. Putting careers advice at the centre of school and college life will partly change that. But there needs to be a bolder change in funding, so students choosing a vocational route have the same access to loans and grants as university students.

Alongside a big push on vocational education, Labour needs to launch a nationwide network of regional banks. It also should help local authorities to develop a much more aggressive approach to the conditions big firms need to meet before opening shops and factories, particularly where they don’t bring massive employment. The approach, throughout, is to build institutions which offer support rather than just ban and regulate. It’s about challenging the Conservative vision of an economy that makes us poor and vulnerable, and using the power of public institutions to support our capacity to make our way in life instead.