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A short Uber ride to the future of work
A surprising number of panellists took an Uber to Demos and the Conservative Workers and Trade Unionists’ conference on the future of work - which took place this weekend.
The conference was understandably overshadowed by the Chancellor’s announcement in the last ever Spring Budget that he would raise National Insurance contributions for the self-employed, to bring them in line with employees. In the uproar that ensued, the Telegraph pointed out if the Conservatives lose the 11 seats where one in five people are self-employed, they’d lose their majority.
But one in seven workers in the UK are now self-employed, the Royal Society for the Arts find, so it’s a surprise that the Treasury didn’t anticipate a row.The Association of Independent Professionals and the Self-Employed, or IPSE, estimate that they contribute £119bn to business turnover. As the RSA puts it, we have seen “shallow policymaking” in response to these economic changes. Under the last government, a Corporation Tax cut mainly benefited larger firms, efforts to curb red tape were cosmetic, and many pro-enterprise initiatives ended up “chronically underfunded”.
Policymakers have a good understanding of why people are choosing self-employment. Julie Deane’s independent review found that “flexibility, freedom and independence are the most commonly cited drivers”. The erstwhile Department for Business, Innovation and Skills’ own research reiterated that self-employment is a positive choice for most, with 84 per cent of the self-employed saying their lives had improved, and over half reporting better finances.
So how are employees faring? The retail sector, which accounts for a tenth of the UK’s economic output, is an instructive example of the pressures on the modern workplace. Despite a golden age before the financial crisis, it failed to recover and the Fabian Society recently claimed that 1 million jobs are at stake. This is because the expansion-driven model retailers copied from each other could not adjust to increased property prices and overheads, reduced household income, and customers spending more time online or locally.
Three models of adaptation have now emerged that all put pressure on employees. The first intensifies the practices of the pre-crisis growth years to extract more profits: outsourcing as many business functions as possible, squeezing suppliers and aggressively cutting staff costs. It is likely to drive further degeneration of job quality in the sector: it might expand the roles available, but they are likely to be increasingly insecure. The second model is driven by automation and digitisation, creating fewer, but more highly skilled jobs that integrate new technology into the trade. A third model, favoured by the Fabian Society’s retail taskforce, puts customer relationships first. It relies on highly-engaged workers like the ‘Geniuses’ who staff Apple stores. Higher pay unlocks the productivity and willingness to adapt to new roles that a relational approach to retail demands.
This model would preserve both jobs and high-street shops, but how can policy support it? Retail was notably absent when Theresa May and Greg Clark identified the sectors that could contribute to growth as part of the UK’s industrial strategy. A longer-term focus amongst retailers, the Fabians argue, could also be encouraged by more diverse forms of ownership in the sector, as well as action from the Competition and Markets Authority to curb monopolistic behaviour by the big players.
It’s not hard to find economic arguments for robust policy interventions to support higher pay, higher productivity and higher value business models in sectors like retail. As the Institute for Fiscal Studies and Oxford Economics found in their latest Green Budget, consumption has buoyed up the UK economy where business investment has failed (See also TTR 12 February 2017).
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But this is not likely to be sustainable, with levels of spending worrying Mark Carney, and debt charities expressing concerns about borrowing. Remember that the stagnation in real wages started before the crisis. Amongst the self-employed, earnings “stagnated in the run-up to the crash and then fell by a quarter in the wake of the financial crisis”, the Resolution Foundation found.
The worker - their independent enterprise, their capacity to adapt to technological change, and their spending power - might well hold the key to the UK’s economic fortunes. But well-paid, productive jobs are under economic pressure from all sides. As Mike Clancy, General Secretary of Prospect, told the conference yesterday, “we've got a real opportunity to ask ourselves what kind of corporate Britain we want over the next five years". Will trade unions spring back from a trajectory of “steady, continual decline” to set out the programme? Will the Conservatives - who called themselves the “party of working people” not so long ago - continue to take over the positions that the Labour Party was created to advance? Most importantly - is there policy substance behind the rhetoric?
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Quick Reads
Teacher turnover affects pupils’ performance at GCSE - but not by much. Centre for the Economics of Education
Seven ways to make industrial strategy successful. Hint: make it the last time technical education is reorganised. Institute for Government
“That’s your bloody GDP, not ours”. Lived experience and economic indicators are drifting apart in many parts of the UK - we need to rethink how we use statistics. New Economics Foundation
Going for the Guardian. The Official Secrets Act 1911 is outdated, but a proposed replacement - with 14-year sentences for leakers - is draconian. Democratic Audit
Boxed in. Subscription services are pretty convenient, but they can cause serious anxiety for consumers with mental health problems. Money and Mental Health Policy Institute
Watching the watchers. When police officers wear cameras, complaints decrease, but assaults against them rise. RAND Europe
Learning to fail well. What experimentation does to improve policymaking. Nesta
Regulating Aunty. As part of the first external regulatory process for the BBC, Ofcom will soon deliver its verdict on the distinctiveness of the Corporation’s programming. Is this too much like editorial control? LSE Media Policy Project
Embiggen it. In Australia, the problem with social innovation has been getting systems to change at scale. Centre for Public Impact
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Reports
Safe as houses? Private tenants are likely to have three health and safety issues during their tenancies - which are still short and insecure. Citizens Advice
“People need to be accountable, don’t they”. Support for a localised NHS is entirely conditional on whether services are evenly delivered. Fabian Society
Now you try. Collaborative problem solving could improve learning outcomes by the equivalent of five months of schooling. But it threatens a loss of control for stressed and overloaded teachers. Nesta
Neighbourhood watch. The “severe” financial pressures faced by councils will be felt most in the services “that make local areas liveable places”. Councils might need to get political about how these can be delivered. New Policy Institute
Looking out for each other. The UK has contributed security, policing and intelligence expertise to the European Union, which have more to lose after Brexit. That said, our current interdependence on these issues is probably irreversible. RAND Europe
Like inclusive growth? New devolution deals should put all public spending on the table in return for commitments to achieve specific social and economic outcomes locally. Royal Society for the Arts
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The Budget to end Spring Budgets
Kick out the JAMs. What happened to working people? Centre for Labour and Social Studies
Dear Prudence. With a £175m price tag, the Chancellor has delayed big decisions on business rates and social care in the service of a fiscally-neutral budget. Centre for Policy Studies
How to spend it. There’s £320 million in this Parliament to help fund up to 140 new schools, but no signs of where this will end up in the system. Education Policy Institute
Abolish capital gains tax. When levied on investments in shares, “it taxes anticipated profits and retained profits that are taxed elsewhere in the system” Institute of Economic Affairs
No rabbits. Short-term improvements in the public finances probably won’t stick: “the Chancellor has largely chosen to do nothing”. Resolution Foundation
Tax on bricks. A missed opportunity to overhaul the business rates system entirely. Centre for Local Economic Strategies
“Nothing to see here”. The Chancellor has built up the Brexit piggy bank instead of supporting industry through a critical time. Civitas
£42 million of business rates levied on Manchester businesses will be used to cover £500 million of reliefs in London. Centre for Cities
“Our social care system is a leaky bucket” - and without careful consideration, that £2bn of extra funds will end up in the hands of private investors. New Economics Foundation
Sit back, relax. The Chancellor has resisted the temptation to meddle in the economy, and that’s a good thing. Official Monetary and Financial Institutions Forum
£1581. The amount the poorest women will lose in benefit freezes and cuts by 2020. Women’s Budget Group
Nicknames aside. Do we see signs of “a more strategic, less crisis-driven approach to spending decisions”? Institute for Government
It’s now plain to see that social care must be delivered locally, not by national agencies. LGiU
Five things the Chancellor forgot to mention. New Economics Foundation
Play fair. “Divide and rule, limited trust and earmarked pots are guiding principles”, still, of the Government’s approach to devolution. New Local Government Network
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See also
Ruling classes. “As a minister, you do sometimes think that British political life is an endless recreation of the PPE essay crisis.” The Guardian
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Think Tanks
Uptown, downtown. A new enquiry into the state of Britain’s towns. IPPR
The new impact. It’s not just the research findings - it’s what you do with them. Overseas Development Institute
Less painful ways to do monitoring, evaluation and learning. On Think Tanks
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Jobs
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Programme Coordinator - Challenge Prize Centre. Nesta. London. £26k. Apply by 20 March.
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Head of Data. Citizens Advice. London. £58+4k. Apply by 24 March.
Media and Communications Manager. Royal Society for the Arts. London. £31-36k. Apply by 27 March.
Policy Officer. Royal Town Planning Institute. London. £34k. Apply by 27 March.
Senior Policy Advisor. Committee on Standards in Public Life. London. £31-38k. Apply by 29 March.
Director (maternity cover). Money and Mental Health Policy Institute. London. Competitive salary. Apply by 5 April.
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