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Equal Opportunities Commission - Transformation of Work Report

The Rt. Hon. Alistair Darling MP,  Former Secretary of State for Trade and Industry
Institute of Directors, Pall Mall, London,  23 January 2007

Alistair Darling MP, Secretary of State for Trade and Industry

I’m pleased to be with you here today at the launch of this important report. The latest in the Equal Opportunities Commission programme of research and analysis.

The Equal Opportunities work has been crucial in helping to bring about changes in women’s economic and social position.

We want this important work to continue when the Commission for Equality and Human Rights drawing together the work of all three of the equality Commissions later this year.

In the last 10 years, we have, I believe, helped working people, their families and their employers in many ways. A strong, stable economy. 2.5 million more people in work. Legislation to outlaw discrimination at work. Help for people who want to work and look after children.

But there is still more that can be done.

It’s striking how often people try to polarise the debate about the balance between work and home-life. The truth is that there isn’t some titanic struggle employer against employee.

Most people want to work hard, do a good job and enjoy time with their family. Most employers value a good employee who is happy with their work. It’s in all our interests to get that balance right.

Setting the scene

A good job is the basic foundation for a secure and happy home. The sort of job you have, your relationship with your employer and colleagues at work have a huge impact on your quality of life.

Since coming into Government, our aim has always been to achieve full and fulfilling employment. More and Better Jobs.

That’s why this report – which looks at the future of work – is so important. It raises crucial questions about what more we can do. To ensure that as many people as possible – particularly women – stay in the workforce and make the best of their skills.

We have a skilled, flexible labour market and record numbers of people in work. We are committed to keeping it that way. But we can’t be complacent. There are massive economic changes taking place. I was in India – I saw the challenges we face as a result of rapid economic change. But I believe we can compete on quality. And quality of employment is an important part of doing that.

So we set out the next stage of our approach in “Success at Work” which we published last year. It shows how we plan to build on what we’ve done in the labour market. To ensure businesses and employees work together towards common purposes.

There is more and more demand for the “work-life” balance our reforms are driving. It makes sense for businesss and families. Today’s report shows that growing enthusiasm.

Fourth in Europe for flexible working hours, first as the best place to do business. The number of parents working flexibly has almost trebled since 2002. That is a good record. It is growing all the time, but we can and are doing more.

In April, over 2 ½ carers will join the 3 ½ million parents of young children with a right to request flexible working. It is having a profound effect on our working culture. Our approach is right for families and right for business.

What We’ve Achieved

In 10 years I believe we have achieved a great deal. There are 2.5 million more people in work now than in 1997. The UK’s employment rate, at 74.6% remains the highest of the G7 economies and above average for the EU. At 5.5%, the unemployment rate is well below the average for the EU of just under 8%. So don’t tell me that fairness at work costs jobs – it doesn’t.

The foundation of the UK’s success has been our strong and stable economy. Historically low interest rates. Investing in research and development. A real platform for business to innovate, invest and grow.

And at the centre of this approach is the belief that social justice and a strong economy go hand-in-hand. Work is the best way out of poverty. Getting people into work – and helping them to stay there – is vital to the success of our social and economic policies.

We do need an efficient and flexible labour market – one that creates jobs, increases competitiveness and raises productivity.

But we can do so at the same time as recognising decent standards at work and quality of employment.

We have shown through our reforms that fairness and decent standards are not barriers to jobs and growth.

We have low unemployment. We have a liberal economy. Increasingly, other countries taking a more restrictive approach have unacceptably high levels of unemployment.

We’ve tackled unfairness by tackling discrimination at work. We’ve given workers the right to four weeks’ annual leave. And confirmed a week ago that this will be extended to 28 days to include bank holidays. 10 years ago some said that the minimum wage would lose 1 million jobs.

And we’ve successfully introduced a National Minimum Wage, benefiting more than a million low-paid employees each year. And there are 2 ½ million more people in work.

I’m also very proud of the Government’s track record in introducing measures to support working families.

In the last ten years, we’ve created over a million more childcare places. Guaranteed all three and four year olds a free part-time nursery place. And improved financial support through increased child benefit and working tax credits.

Working parents have benefited from increases in maternity pay, which will have more than doubled by April 2007. They have also benefited from new rights to paternity and adoption leave, and from the right to request flexible working.

Last year we published a report “Changing Job Quality in Great Britain”. This showed that job quality – which covers job satisfaction, stress levels, employee influence over work, job security and effort – when measured in Britain has improved. With around one million more workers saying they were satisfied or very satisfied with the sense of achievement that they got from work in 2004 – compared with 1998.

Employees also said they felt more secure in their jobs. Management-employee relations have improved, and employees said they had a greater say in the way they did their jobs.

The report also found that jobs created in new workplaces were generally of higher quality than previous ones.

There is always room for progress. This shows that our policies are on the right track. I know we can do more.

Family friendly Employment/Flexible Working

The Equal Opportunities Commission Report highlights the growing trend of flexible working in the UK, and the importance of this.

The right to request flexible working has been a success, helping many people to change their working patterns. Latest figures show that 47% of new mothers work flex-time compared to just 17% in 2002. And almost triple the numbers of new fathers now work flexibly.

And employers accept four out of five flexible working requests.

When we introduced the right to request flexible working in 2003, we deliberately chose an approach that ensured that the legislation was workable for both employers and employees.

And last September, the World Bank ranked the UK as the best EU Member State for ease of its employment law.

For example, we specially focused the flexible working law to parents of young and disabled children – a group of employees who needed it most.

And from April this year, we are extending the right to carers of adults. Another group of with particular problems in juggling their work and caring responsibilities. Evidence is showing that our approach is working and we are achieving a cultural change.

We’ve seen a significant increase in the number of people working flexibly in recent years. And employers offering more types of flexible working.

56% of British employees with more than 10 employees operate flexible working hours. Homeworking last year increased to 28% from 16% in 1998. Flexi-time is up from 19% to 26%.

The term “work-life balance” has increasingly become part of everyday language. For a great many, work-life balance practices and flexible working policies has become embedded as key elements of good business practice.

Companies are recognising the benefits of flexible working. This ranges from increased staff loyalty and motivation, through to savings on recruitment costs, reducing staff turnover and absenteeism and attracting and retaining a talented workforce.

Increased goodwill and a more flexible attitude on the part of employees can benefit the bottom line. Evidence from the CBI’s employment trends survey shows this is all true.

There can also be benefits to society more widely. If, for example, everyone who currently travels to work by car were able to work from home once a week, the reduction in congestion and pollution are potentially substantial.

So through the right approach to legislation and working with employers and their employees we have brought about a huge change.

We are now one of the best countries for flexible working AND at the same time one of the best places for business. Ten years ago, to some people that would have been unthinkable. Not for us.

In the last 2 years 17% of employees have asked to work flexibly. Our Work Life Balance employee survey, which we are due to publish shortly shows that 87% of employees said they were either very satisfied or satisfied with their current working arrangement – which shows how far we have come.

This really is proof of the change that has taken place in British workplaces in recent years.

The Work and Families Act which was passed last year is a significant piece of legislation, which introduces practical and very real additional support for working families. It introduces measures to help employers manage the administration of pay and leave and to plan ahead with greater certainty.

These latest changes respond to changing patterns of employment, and will ensure that parents, adopters and carers have genuine choices about how they balance their work and family life.

The main strands to the Act, most of which takes effect from April this year are:.

Maternity pay is extended from 6 to 9 months, making it easier for women to make a choice about when they return to work.

A set of measures to help with the administration of maternity, paternity and adoption pay and enable employers to plan ahead.

The Act also extends the right to request flexible working to carers of adults. More than 2.5 million carers will be entitled to this right.

Where Next?

As we move on from the changes being introduced in April, our aim by the end of this Parliament is to extend the period for payments of Statutory Maternity Pay, Maternity Allowance and Statutory Adoption Pay to a full year.

We also intend to give a new right to fathers to take additional paternity leave. This will allow them to take up to 26 weeks to care for their child before their child’s first birthday, if the mother chooses to return to work. Supporting the whole family.

This will be paid leave if the mother has decided to return to work with some of her own entitlements remaining. It’s estimated that between 240,000 and 280,000 fathers can take advantage of this new provision.

We will also continue to monitor the effectiveness of the right to request to flexible working. And look at the case for extending it to parents of older children.

A final thought. There is a growing consensus that quality of work and the quality of life really do matter.

But it isn’t universally accepted – far from it. Some say you can create quality through mere encouragement or exhortation. Yes, good employers will do the right thing. But too many won’t.

The lesson of the last 10 years is you need to legislate where necessary but do it - getting the balance right. You do need to do more than encourage.

You need to lead. You need to legislate to bring about the changes we all want. The argument is not yet won. Warm words, are never enough.

So let’s recognise what’s been done and build on that.