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The Rt. Hon. Patricia HewittFull and Fulfilling Employment |
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| Thanks Geoff for that introduction. I really am delighted to be here. Particularly as it is Lord Janner's birthday.
Lord Janner, and his father before him, were both, like me, MPs for the constituency of Leicester West. Lord Janner served the constituency well for 25 years. When I became MP, the constituency only accepted me on condition that I didn't last quite as long as he did… Context Today I want to talk about the type of labour market I want to see in Britain. With Gordon Brown, Andrew Smith and Estelle Morris, I am today publishing a paper paper that sets out clearly our vision and aspirations and policies for the labour market of tomorrow. – "Full and Fulfilling Employment – Creating the Labour Market of Tomorrow" with Gordon Brown and Alastair Darling. The paper, "Full and Fulfilling Employment", clearly sets out our three aims for the labour market:
I would like to say a little on each one of those aims. Employment Full and fulfilling employment is at the heart of our approach. It drives economic growth - creating social renewal. And now – with 1.5 million more people in work than in 1997 – full employment is closer to reality for this Labour Government. In the first term, the first thing we did was ensure macro-economic stability and get public finances in order. This gave business the platform for growth; and us the foundation to introduce the working family tax credit, increase child benefit and introduce the New Deal. Getting people back into work and making work pay. We also introduced decent standards in the workplace, both domestically, through mechanisms such as the Minimum Wage; and internationally, through the European Social Chapter, proving – provided you get the implementation right - there doesn't need to be a contradiction between fairness and flexibility, and that both are essential if we are to get more people into the labour market. But we have still not attained our goal of full employment, although we are now close to achieving what has been a key ambition over the 100 year history of the Labour Movement. Diversity and Choice And there are areas where the labour market remains dysfunctional. Women remain held back by the 18% pay gap – so it is still too often them, rather than their partner, who give up work or reduce their hours when their child is born. Economics dictate. Men have a time gap; women a pay gap. And almost 70% of men aged 60 to 64 are economically inactive now – i.e. they're not looking or not available for work. This compares with 70% who were active just 30 years ago. Yet we're living longer and are healthier for longer. So there's no reason why we should feel we have to give up work when we reach a certain age. And I'm not just speaking from self interest! 7 per cent of the population are from Black, Asian or other minority ethnic communities. Yet unemployment is far higher; almost 14 per cent of the unemployed are from ethnic minority groups. It is in business interests to pick from the full talent pool. We need to promote more diversity and choice in the workplace. Productivity Gap And tackle the productivity gap. For every £100 of production by a French worker – we produce £85. For every £100 of production by an American worker – we produce £72. If we achieved US levels of productivity, we would be creating an extra £5,000 per worker, per year. This does not mean we need to work harder. What we do need to do is work smarter. Aims – Summary So our aims for a second and potentially third term are clear:
We are confident that these are the right principles on which to base our aims. Getting people into work is the crucial first rung on the ladder of social opportunity. Work engages our ambitions and expectations; it helps to shape our identity and status. The labour market is far more than just some anonymous economic entity. It's about people. And in launching this vision paper today, we are talking about people. Not a market in widgets. Labour market is shorthand for lives and identities. This government is often accused of being obsessed with the work ethic. I make no apology for that. I have seen at close hand, in my own constituency, how unemployment destroys people's health, undermines their families and destroys community cohesion. I have no doubt jobs are vital to social inclusion and social justice. For this Labour government, the labour market is the point where our two over-riding ambitions meet most starkly. Our ambition for a dynamic, successful economy. And our quest for social justice. Human Capital is to the 21st Century what plant and machinery was to the 19th. So we are convinced our goals are the right ones. And we're pretty clear that the broad thrust of our policy is correct to meet these goals – our record speaks for itself. But where we want to really engage debate is on how we go about reaching those goals. Tools European Vs national level For instance, do we take action at European or at national level. The debate is often polarised between a job-destroying regulatory, European social model on one hand; a job-creating deregulatory US model on the other. I reject this caricature. The US has done much in terms of job creation and productivity growth. But anybody who deals with the litigious American culture knows it's not a free marketeer's deregulated heaven. Nor is there a single European labour market. Rather, there are fifteen different labour markets, fifteen models with different traditions, different levels of employment, productivity. Gordon Brown will tomorrow be tabling at ECOFIN the Government's detailed analysis of different labour markets in all EU countries. A shorter version of that analysis forms part of the vision paper I am launching today. Of course it is right that sometimes we do take action at the European level. We are committed to full engagement in Europe - not only on social policy, but also in other areas like economic reform and the environment. But the idea that European action does not have to involve legislation is now engrained in European thinking, following the Lisbon Summit. I'm pleased that Member States have taken up what is known as the Open Method of Co-ordination. Peer pressure focussed more on results and less on process. And the Commission has taken on board many of the proposals contained in the Mandelkern report – so we will have a meaningful consideration of alternatives to regulation at the European level, a culture of consultation on regulatory proposals and a rigorous Assessment Instrument. Regulation or best practice We also have a range And this is now clearly recognised across Europe in the way that social policy is developed. Indeed, it is enshrined as part of the Lisbon process [?]. of policy tools available to us at national level - some involving legislation, some - best practice. And there are some marvellous examples of best practice. Full Employment Take our aim of full employment – promoting diversity and choice. Some managers, I'm sure many in this room, will advertise in Black and Asian papers as well as the national press. It is clearly the right thing to do to cast the net as wide as possible when fishing for new talent. Many employers are promoting flexible working - encouraging women returners to the workplace, and improving productivity into the bargain. I was recently speaking to different employers about how they do this – a large employer and a small employer. The large company – Lloyds TSB – are giving their workforce a real choice on how they balance their work and family responsibilities. They want to be the employer of choice. The smaller manufacturing company is doing the same – because they really recognise the benefits to their business – in terms of winning contracts and improving productivity. On the other end of the scale, a major clothing retailer was telling me about a time he asked a manufacturer to do a very fast turn-around of short runs. The manufacturer explained that he couldn't do it because he didn't have the labour flexibility. Of 400 workers, only 4 were part-time. The retailer asked if he couldn't he employ more. 'If I started doing that,' said the manufacturer, 'everyone would want to do it!' There was a manufacturer neither meeting the needs of his customers or his employees. I wonder how long employers like this will stay in business. So there is a role for regulation sometimes as well. That is why, next April, we are introducing new laws to encourage flexible working. And, incidentally, I understand that tomorrow night is the night that parents need to "get together" if they want to be the first to claim the new entitlements when they come into effect! So I am opening a discussion about whether we need to do more – either through a regulatory or non-regulatory approach – to protect workers not currently covered by certain statutory employment rights – including, for instance, many agency workers and some casual workers. This feeds into the debate currently going on in Europe. Employment agencies play a great role in promoting diversity. Often, people's first experience of work will be through an agency. Ethnic minorities, mothers returning to work, older people – often find they help get their foot in the door. It is important that the Directive the Commission has recently proposed does not make it significantly more difficult for firms to take on agency staff. Some people have said they are afraid that agency workers will take the place of permanent staff. If this is the case then the principle of non-discrimination should apply only after a period of, say, 12 to 18 months. By then, the agency worker cannot truly be said to be merely temporary and should be put on the same footing. This would stop companies using agency workers to undermine the conditions of permanent workers. At the same time, it would avoid administrative burdens that might discourage companies from taking on agency workers. I want to improve the quality of what some describe as atypical work, but the legal framework should reflect genuine differences between different types of workers. I want to promote diversity of opportunity in the labour market, not reduce it – and need your views on how to do this. High Performance Workplaces In creating high performance workplaces, the critical outcome is to have greater trust between managers and staff - but there is more than one way to achieve this. Some follow the partnership route - companies like Tesco, in its partnership with the shopworkers' union, USDAW, and TNT, with the Transport and General Workers Union are amongst the success stories of this approach. We've made it easier to go down this route by giving trade union members a legal right to recognition, and by providing support through our Partnership Fund to encourage employee dialogue. We also agreed the European Directive on Information and Consultation. Some companies may use employee share ownership schemes. Others use less formal measures to involve employees, secure their commitment and harness their talents. For instance, a small firm may set up an ad hoc problem solving group – or may just rely on direct dialogue with their employees. But there are still not enough good examples out there - the high levels of disputes taken to tribunal are indicative of a deeper underlying problem. So we've taken steps through the Employment Act, which gained Royal Assent on Monday, to encourage workplace dialogue to try and resolve disputes before they get as far as tribunal. I want to find out more about current employee dialogue. I want to find out what is working well and why; what issues employees are currently informed and consulted about, and how and when this takes place. We will be consulting at a later stage on detailed implementation of the Directive. Before then, we want to be sure of the context for implementation, make sure we understand the environment in which legislation would be introduced and, as far as possible, build conscensus to how we should implement. That is why I am publishing a discussion document on improving employee dialogue today. I also want to look at how the Employment Relations Act is operating. The Employment Relations Act 1999 provided mechanisms - for instance, union recognition procedures- to promote fairness and partnership at work. There is no doubt that fairness and partnership lead to more productive workplaces. I am today announcing a review of how the Employment Relations Act is operating, as we have signaled many times since these policies were first developed. Our aims are full employment; high performance workplaces; higher standards – based on principles of diversity and choice. In the next few years, I want to see a labour market with the following features: 1. More provision – and take up – of flexible working opportunities;2. Less of the long hours culture that permeates too many of our workplaces; 3. Reduction in gender segregation both vertically and horizontally; 4. Greater and deeper spread of best practice in people management; 5. Reductions in the gender pay gapdisparities across the workforce; 6. Fewer women with dependent children citing lack of available childcare as a barrier to employment; 7. Reduction in employers' perception of the administrative administrative burden of employment legislation. These are the areas in which I want to see progress. We have many tools at our disposal to achieve them. In particular, Human Resources Managers have a really important role to play in this. You have developed already some excellently innovative ways of turning your workplaces into high performance workplaces. I look forward to working with all of you in seeking to make this vision a reality. Thank you. |
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Other speeches by The Rt. Hon. Patricia Hewitt
(the following are available from the archive) |
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