Speech to the Fabian Society at the launch of the Changing Work Centre
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Can I start by thanking Community and The Fabian Society for inviting me to Chair the Changing Work Centre, and to the members of the Advisory Board – many of whom are here tonight - who will provide huge expertise, insight and experience to the work of the Centre.
The Fabians have a long tradition of new ideas and new vision for the Left – with a minimum wage and full employment part among the first things they ever called for over a hundred years ago.
And Community, one of our most innovative trade unions at the sharp end of changing work today – fighting for jobs in the steel industry but also not walking away from their members and communities where steel works have closed, supporting them with new training and looking for new ways and areas to recruit.
Over a century ago, the Fabians and trades unions came together to stand up for working people and to found the Labour Party as the party of work.
So it is fitting that the Fabians and Community are coming together now to found the Changing Work Centre – and renew the Labour Party as the party of work in the 21st century.
Changing technology, globalisation and changing work are changing everything about our lives.
Work may be about to change even faster.
But politics isn’t keeping up.
While innovative start-ups are seizing new chances, many communities and families are struggling with the pace of change.
The best companies now put horizon scanning at the heart of their business.
But policy makers and certainly politicians too often fail to lift up their eyes.
The new and changing world of work is generating amazing new opportunities but also new injustices, inequality and new forms of exploitation.
Yet we haven’t worked out how to respond
We are analogue in a digital age.
Task rabbits in the headlights.
Labour has always believed in the dignity of work.
The pay check that keeps kids out of poverty;
The promotion that helps people get on;
The sense of purpose, the defeat of idleness;
The lifeblood of communities where everyone knows they have responsibilities and a part to play.
For me as Secretary of State for Work and Pensions after the financial crisis, the most important thing was to make sure that the Future Jobs Fund and other policies ensured we never again lost a generation to unemployment or scarred entire communities as the Tories did in the 1980s.
As work changed in the past, we and the trades union movement adapted too – finding new ways to support social justice in each new age.
But as work is changing now we aren’t keeping up.
That’s why today’s launch of the Changing Work Centre is so important.
And that’s what I want to talk about today
- Why work is at the heart of Labour’s identity
- How and why work is changing so fast now
- And what this means for the Left and for the Changing Work Centre now
LABOUR AND THE INDUSTRIAL REVOLUTION
Our movement was born out of momentous economic and social change – so we’ve always understood how the nature of work affects the distribution of power and wealth, social class and inequality.
Labour was forged in the furnaces of the industrial revolution.
Steam, electricity and global trade drove the rise of the great cities and the smoking factories, built working class identity and solidarity, brave new opportunities and terrible urban squalor and exploitation.
The children of farm labourers and skilled artisans became factory workers or dockers, sometimes migrating miles from where they were born.
Children were sent up chimneys. Women were killed by spinning machines. Men died when pits collapsed.
Trades unions recruited in the collieries, the factories and the steelworks.
And from that solidarity they built the Labour Party to fight for good jobs, full employment, an end to exploitation, collective bargaining and a living wage.
Our socialism was not just about work itself but the fight for the universal services and welfare state needed to support opportunities, security, equality and social justice in an industrial age.
So the pioneering Labour Government built the National Health Service, brought in the Family Allowance, designated new towns to build decent homes for all.
We knew who we were, what we stood for, what we were fighting for – and so did everyone else.
LABOUR AND THE WHITE COLLAR REVOLUTION
By the second half of the twentieth century machines had become more complicated.
Low skilled jobs were replaced or moved to cheaper places abroad as global trade grew.
New higher skilled jobs emerged – operating and organising the machines and delivering the services new consumers wanted.
Manufacturing went into decline but services were on the rise – a real white collar revolution demanding new skills and rewarding new talent. Women were demanding greater equality too.
Collective bargaining power and state ownership weren’t enough to provide job security or economic prosperity as the old jobs were changing fast, moving abroad or being replaced by new technology.
Power and opportunities were no longer in the hands just of those with the capital, but those with the skills and qualifications to get on.
And Labour wanted everyone to get on, to make the most of their talents and potential, every child to get the very best chance in life.
We seized on new routes to tackle inequality, end child poverty and redistribute power.
Harold Wilson championed the white heat of technology, and new universities.
Trade Unions increased recruitment in the public sector and among the professions – reaching its highest ever membership in 1970.
Britain saw the biggest boost to social mobility since the industrial revolution – working class kids from all over Britain becoming like Neil Kinnock the first generation in a thousand years to go to university.
Tony Blair championed education, education, education – boosting science, sending more teenagers to college.
Gordon Brown brought in the New Deal for the unemployed, and tax credits combined with a minimum wage so no worker could be left behind.
We championed women’s emancipation – with the equal pay act and the sex discrimination act. The right to join a union, statutory recognition all delivered.
We fought against the prejudice and discrimination that held people back.
And we started to change work itself to fit round family life - giving rights to part time workers, rights to flexible working, extending maternity leave and investing in childcare.
We wanted everyone to be able to climb the skills ladder into the new quality jobs of the future, and no one to be left behind.
Once again we knew who we were and what we stood for.
WORK AND THE DIGITAL REVOLUTION
But technology and the economy are changing rapidly again. New amazing opportunities are emerging, but also new inequalities, new injustice and exploitation. And the old remedies aren’t enough.
Help to climb up the skills ladder is great. But it isn’t enough if someone has taken the middle rungs away as the economy is hollowing out.
There are more jobs now as more women work, older people work longer and more people come from abroad.
But they are less secure. Over half the new jobs created since the financial crisis are either temporary or self-employed.
Fewer manufacturing jobs, more services.
Only one in twelve workers are on George Osborne’s march of the makers.
More professional and managerial jobs;
Less work in admin or skilled trades;
More low paid care work;
More jobs at both ends, but fewer in between;
More jobs in cities, fewer in coastal towns;
More people have the flexibility they want to juggle work and family life or study to get on;
But more people are stuck under-employed wanting more hours, more control or higher skilled work.
Just when people need more support at work trade union membership has fallen.
And trade union rights are being cut.
Overall inequality in the workplace is widening and insecurity is growing.
53 men and 9 women between them own more than half the world’s population put together.
Less people than are in this room right now.
Yet they have more wealth than half our planet.
Mike Ashley is worth £5.5 billion. That’s enough to pay the wages of every police officer in England.
Yet his business has been built on zero hours contracts and agency workers – some of whom we learn this week are being jammed into overcrowded terraced housing by their agency to get round the minimum wage.
And this widening of inequality isn’t just bad for working people, it’s bad for economic growth too.
As the Bank of England, the IMF and OECD have all now argued, growing inequality is preventing the wider economic growth and prosperity our countries need.
If prosperity isn’t shared, in the end it won’t grow.
WIDER CHANGES AHEAD
But this matters even more because we could be on the cusp of changes to work that are far more profound than anything we have seen since the industrial revolution.
China, India and other major countries no longer compete with us just for low skilled jobs with cheap labour. Now they are competing for the highest skilled and high tech jobs too.
Turbulence caused by global movements of capital in the last century is nothing to the turbulence now being caused by global movements of labour on a scale we did not predict.
Old work is still pouring out
New workers are coming in
But we are not creating enough good jobs for the workers at hand.
Businesses need the best global talent to compete in international markets. But many choose trained workers from abroad rather than skilling up here at home.
Britain has always benefited from the ideas, ingenuity and hard work of those who have come here from abroad. But some employers exploit low skilled labour from abroad to keep wages low and avoid investing in the better jobs local workers would prefer.
Meanwhile The Inclusive Prosperity Commission last year found that:
“corporations have shifted their traditional focus on long-term profit maximization to maximizing short-term stock-market valuations.”
David Weil describes the fissuring of the workplace as companies increasingly franchise and subcontract, pushing former employees into self-employed contractors transferring risks away from the company to the workforce and pushing wages down.
Others are using their global status to avoid paying taxes to national governments.
The employment security that employers used to provide is disappearing and the social security governments used to provide is increasingly hard to fund.
Liam Byrne, one of the members of the advisory panel, argued in a speech in November:
"Too few firm are thinking long term and creating the great jobs that pay ordinary workers well."
That is why – he argues - corporate governance needs to change and we need to re-write the rules.
Demographic changes are affecting the workplace too. Family life is changing as both need flexibility, leave and childcare.
But as older relatives live longer increasing demands for social care, there are huge new demands on the economy.
TECHNOLOGY CHANGES AHEAD
However the biggest impact on work of all is coming from the escalating pace of technological change.
Brynjolfsson and MacAfee in their book the second machine age, argue that, “digital technologies will be as important and transformational to society and the economy as the steam engine…. The transformations will be profoundly beneficial… but will bring some thorny challenges.”
There are amazing new leaps in science, technology, health care, big data and analytics – with exciting new jobs to go with them.
Already we have seen new global giants emerge selling us things we never knew we wanted and now we depend upon. The world’s biggest company started in Steve Jobs dad’s garage in the 70s. The worlds biggest social network started in Mark Zuckerburg’s student dormitory in the 90s.
It’s much easier for new ideas to spread, new companies to break in without raising vast amounts of capital first, to start up in a bedroom, a garage or an internet café.
Hewlett Packard are recruiting loads of data scientists to develop new ways for companies and public services to analyse big data – mapping new diseases, or finding children at risk, or predicting consumer preferences.
In Manchester, the National Graphene Insitute is pioneering super material that can revolutionise engineering.
In Somerset, Facebook is investing to develop solar-powered drone technology that will bring the internet to remote parts of the world.
But the truth is that Britain isn’t generating enough of these brilliant new jobs and too many people are being locked out of new opportunities or left behind.
Not enough young people – and especially not enough women - are studying STEM subjects. 90% of coding is being done by men.
Older workers struggle to get the new skills they need.
New tech jobs are also far too concentrated in the cities, while towns get left further behind.
Our new research shows that tech start-up businesses in just one narrow London post code last year were higher than all the start-ups in Yorkshire towns put together. As tech becomes more important than ever, this is creating a new digital divide.
Ways of working are changing too. Four technologies - mobile computing, social media, data analytics, and cloud computing - are together causing huge disruption in traditional businesses and changing jobs.
Software platforms like Amazon, ebay, Uber, Airbnb, Blahblahcar, Hassle.com and Task Rabbit are changing the way people do business and the way we work.
Nearly five million people are involved in crowd work – modern spot markets for driving, renting a room, moving a wardrobe or getting the laundry done.
For some people this provides new opportunities. The chance to work flexibly while the kids are at school without the pressure of starting your own business. Or to reach vast new markets online. Or to volunteer and help in the community too.
But there are downsides – especially when it’s the only work on offer.
Crowd sourcing and self-employment can provide flexibility and innovation, but people get no maternity leave, no sick pay, no employment rights. And in the end it is families that lose out from the growing insecurity it creates
The old welfare state wasn’t designed for this.
Nor were trades unions.
Organising the dockworkers against the exploitation of spot working in 1889 was possible because they all met together in line and built common solidarity while they waited for the foreman to choose who got work each day.
This new crowd workforce is scattered across the country left to compete against each other online.
Workers in the new economy need social security, employment protection and trades union support as much as ever, but we need new ways to make sure they can get it.
Coming down the track is perhaps the most transformative technology of all. Artificial intelligence and robotics. Technologies designed not just to augment human labour or to make it more productive, but directly to replace it.
Skilled insurance underwriters replaced by algorithms;
Even the new Uber drivers replaced by driverless cars.
The Bank of England say up to 15 million jobs in the UK could be at risk of automation.
Some experts are optimistic. They argue technological advances in the past have always made all of us better off in the end.
Others predict this will reach a tipping point and suddenly displace large swathes of work across the globe far faster than human ingenuity and rising demand can create new jobs.
Bill Gates has warned that, “technology will reduce the demand for jobs.”
Others warn that even if new jobs are created, the scale and pace of change means too many workers or communities will just get lost somewhere in the void between the old and the new.
Or that even where there is growing need – such as for high quality social care – the free market won’t create the new jobs we need and the public sector isn’t stepping in to the gap.
Others are more worried. They fear that this time the technology is different.
That we will see a much more extreme hollowing out of the labour market than we have seen ever before.
That this new technological change will replace not just augment human capabilities – and that means overall the share of prosperity paid to working people will fall – pushing down real wages and living standards across the globe.
Andrew Haldane, Chief Economist at the Bank of England has said:
"as robots extend their skill-reach, “hollowing-out” may thus be set to become ever-faster, ever wider and ever-deeper."
However optimistic or pessimistic you feel, on some things everyone seems to agree:
- People will face faster change in their jobs, their lives and communities than ever before – and for some that will be really hard.
- There are exciting new opportunities but also serious new risks of exploitation
- Inequality and insecurity are both highly likely to get worse unless we act.
- Work is fragmenting, workplace solidarity is fracturing, and social solidarity is fracturing too.
The potential scale of this means there is huge urgency in how governments and policymakers respond.
POLITICS AND THE DIGITAL REVOLUTION
So far the Tory Government is making things worse not better.
Making it harder for Britain to compete for the best jobs and the top international talent
Science investment is too low
The education curriculum has gone backwards
FE Colleges and skills have been cut right back
Immigration restrictions on overseas university students and scientists are too tight.
Yet not enough is being done to stop low skilled migration being exploited to undercut local jobs. Nor is there enough help for people to cope with change.
Martha Lane Fox is doing with some great work with dot.everyone
But the Government is doing too little to reach those without digital skills.
Retraining for older workers has been squeezed
There is no proper plan to grow new quality jobs in expanding sectors like social care.
Social security, protection and solidarity are being undermined not modernised for the changing world.
Tax credits cut back
Employment rights taken away
Trades union rights hit
Public services squeezed.
The result is that communities and politics are fracturing, many people feel let down, and nationalism is rising as a way to find someone to blame.
LABOUR AND THE DIGITAL AGE
Of course it shouldn’t surprise us that the Tories aren’t bothered.
They see changing work just as an issue for the market to resolve. Widening inequality is not for them a great concern.
For Labour it really is – but we are in danger of looking irrelevant and failing to keep up.
Losing our traditional support as the working class fragments and peoples sense of identity changes.
Not reaching those in insecure work with trade union support.
Not inspiring those who want to get on, seize new opportunities for the future.
Not reassuring those who feel angry at their lack of control of their lives.
Not reaching beyond the cities and into the towns
We cannot get lost touting yesterday’s solutions to tomorrow’s problems. Things like nationalising the power industry don’t do anything to help young people trying to build a new app or older workers stuck in precarious temporary work.
Right now we aren’t offering hope to those who want new opportunities or to security to those who feel threatened by change.
And we have to earn the credibility to be heard.
Much as we may argue amongst ourselves about whether we are too right wing or too left wing, the right question is whether our whole labour movement is being left behind.
Work has always given us in the Labour Party our own sense of common purpose, our own sense of identity, and our own vision of the future.
So we need to renew ourselves now around a strong vision of the future of work, common purpose, empowerment and equality in a digital age.
CHANGING WORK CENTRE
And that is the purpose of the Changing Work Centre.
To reach beyond the party, to draw in the best ideas, the widest expertise, to look at how work is changing and how our country should respond.
This is a time for politicians to show some humility and admit that the world is changing so fast, we are none of us confident about the best response.
Only that way will we be open enough to the radical new ideas we need.
The Centre is our chance to understand and analyse changing work:
To ask how Britain can compete globally and create more good jobs in a digital age. For example, what digital skills and infrastructure will our country need, or how can we create good quality jobs in care?;
How we build a fairer and more equal society that empowers everyone and stops exploitation?;
How do we build social security anew – a new Government social compact for a new workplace
How do we encourage new shared enterprises, and new ways of building common purpose and community;
How can trades unions play new and innovative roles supporting working people when the old collective workplaces decline;
And how can we build a Labour coalition around a fairer Britain, to inspire both high skilled and low skilled, the aspirational and the fearful, to have confidence in a better working future.
When the Fabians and the trades unions, the Methodists and Marxists, the cooperatives and the Christian socialists came together to found the Labour party they created a powerful movement.
Never Luddite, always progressive and enthused by new ideas. Never narrow, always internationalist. Always strong values and fierce determination, but also hard headed and practical about the need for Parliamentary power.
That is what the Fabians and Community are doing again now – drawing on that progressive, optimistic forward looking tradition, practical hard headed analysis and plans.
That is what our Labour party needs to do again now.
To resist the temptation to be either Luddite or romantic about what technology will bring
To be true to our values, learn from our history and lift up our eyes towards that future of changing work.