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Lord Tebbit: My Lords, I am grateful to the Minister for giving way, but what he said leaves me even more puzzled. If the Secretary of State told us everything that is in the report fully, frankly and openly, what is there that prevents him from publishing it? What is the damage in publishing the report if there is nothing in it beyond what we have already been told?

Lord Falconer of Thoroton: My Lords, the judgment is that at this stage publishing the report would not materially assist the peace process, and I ask noble Lords to accept that judgment.

I was asked a number of questions in relation to the review referred to in the legislation. First, it will be a review under the validation implementation part of the Good Friday agreement. The timescale of the review will ultimately be a matter for the parties. It is they who must work together to find an agreed way forward. Our hope is that a solution will be found quickly enabling institutions to be restored as soon as possible. The Bill before the House requires steps to be taken as

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soon as is reasonably practicable after a suspension to initiate a review. I am obviously not in a position today to say who the chairman of any such review may be.

The noble Lord, Lord Tebbit, said that the promise in relation to decommissioning was given not by Sinn Fein, not by the IRA, but by the Prime Minister. It was not the Prime Minister who said that decommissioning should and would happen; it was the Good Friday agreement. The agreement says,

    "All participants [including Sinn Fein] reaffirm their commitment to the total disarmament of all paramilitary organisations".

That is what the agreement required. That is what the people of Ireland, north and south, voted for. That is why clear and credible progress of decommissioning is essential to restore confidence in the devolved institutions.

The question was asked as to whether it was possible to move this Bill without the consent of the Assembly. I can assure my noble friend Lord Desai that it is perfectly constitutionally proper to do that.

A number of noble Lords, in particular my noble friend Lord Desai and the noble Lords, Lord Hylton and Lord Armstrong of Ilminster, asked why the Assembly cannot continue meeting in shadow form but still talking. As most noble Lords recognise, the effect of Clause 1 of the Bill prevents the Assembly from meeting or conducting any business during a suspension. That means that it will not be able to function in a shadow or consultative mode. The Bill is not about providing an alternative role for the Assembly; it is about providing a complete breathing space in order for people to focus their energies on resolving the current difficulties. Of course Assembly members will continue to hold their position and still be able to make representations on behalf of their constituencies. Similarly, it will be open to the Government to consult with any individuals or parties on any matter, but not meet in the formal setting of the Assembly.

I hope that I have dealt with all of the main points raised in the course of this debate. I express my gratitude on behalf of the Government for the broad measure of support for the promotion of this Bill in another place and here today. Once again, I commend the Bill to your Lordships.

On Question, Bill read a second time, and committed to a Committee of the Whole House.


5.55 p.m.

Lord Lea of Crondall rose to call attention to changes in employment patterns in the United Kingdom; and to move for Papers.

The noble Lord said: My Lords, on 23rd and 24th March in Lisbon there will be a special summit of the European Union to be called the Special Council on Employment, Economic Reform and Social Cohesion, for a Europe of Innovation and Knowledge--not exactly a snappy title--which is

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strange, because the conference was largely inspired by the British Government. But it is nice to know that the art of compositing is alive and well in Downing Street.

When Harold Wilson made his famous speech about "the white heat of the technological revolution" at the Labour Party conference in Scarborough in 1963, the first Labour Party conference I attended, all the lobby correspondents there thought it was brilliant. They knew about as much about the white heat of technology as I did. But it was a great leap forward for the Labour Party and I certainly approved of it, even though for the citizens of Scarborough he might as well have been talking Greek.

Nowadays he would certainly add a couple of references to "e-commerce" and the Internet, calling the whole package "the new economy", and the story would be complete. Let me make it clear; it is a valid agenda and I support it. The analysis is correct. But how do jobs fit into it and the lives that the next generation will lead?

When we talk of employment patterns we think of farmers in mid-Wales, steel workers in Scunthorpe through to call centres in Glasgow and musicians in the Barbican. It is important that we do not generalise too much from any one industrial sector. Britain has created an extra 700,000 jobs in the past three years, many of them in distribution and business services, hotels and personal services. The public sector has stabilised but there should be no presumption that the big growth needed in social, health, transport and environmental services should not be through public agencies, albeit no doubt with some degree of hypothecation.

My thesis this afternoon will be that, both for economic and social reasons, we now need to put as much emphasis on the quality of employment as we do on the quantity of employment. How can we set out the vision which accommodates that? Some noble Lords may be surprised to learn that there are now as many managerial and professional workers--38 per cent of the workforce--as there are manual workers, also now exactly 38 per cent. We should not regret that in any way in so far as that in itself is a trend in society towards improving the quality of employment. There was never much quality of life down a coal mine, but the redundant miners to this day do not have the quality of life of most people living in Wokingham. That is another issue concerning structural change. It was Walter Reuther, the leader of the Auto Worker of America who told Henry Ford, when the latter said he would not need so many workers, that he sure as hell needed some workers, some place, to buy his cars. So let us agree that we are talking about structural change, not the collapse of work.

There are unsatisfied demands in society. Over the past four decades civilian employment in the UK has increased by around 4 million, raising the size of the total workforce to 27 million. Most of us will have to get used to hearing the buzz words, "the new economy". I commend an excellent pamphlet entitled, Behind the Buzzword--The New Economy, written by John Philpott, Director of the Employment Policy

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Institute being published next week, from which I derived great benefit and on which I shall draw from time to time in my remarks.

The underlying theme is that developed economies are increasingly knowledge dependent, founded on information and communications technology, and ever more geared to the production of weightless services rather than primary and heavy manufactured goods. The idea of "weightlessness" is, apparently, attributed to Alan Greenspan, who noted that in 1996 the physical weight of US output was then little different from the 1940s, but the real value of output was three times higher. You do not need to be Einstein, or even Alan Greenspan, to work that out.

The story of economic growth is one of technological change and continuity. As one so-called "industrial revolution" succeeds the previous one, we should remember that change will be our ally as long as everyone affected can see how it can improve his or her quality of life.

Standard national statistics record that manufacturing employment is now well under 20 per cent of the total. A great deal more of the value added is now incorporated at an earlier stage in production and the computer hardware and software is itself an excellent example. But business and financial services--often serving manufacturing--now constitute a larger sector than manufacturing itself in the national statistics of employment. The jury is still out on how far the Internet is likely to lead to any step change in productivity. One is reminded of the remark of the American economist Robert Solow:

    "I see computers everywhere, apart from in the productivity statistics".

The question of how we measure the value added of Internet services was at the heart of the issue of the price agreed between Time Warner and America On-Line. There are massive industrial policy issues involved here, many of which have to be addressed in the context of Europe. I am very glad that this is one of the areas on which I understand my noble friend Lord Puttnam will focus his remarks.

In some industries Europe is more successful than America. I need only mention Nokia or Vodafone to make that point. On the question of e-commerce, through Sub-Committee B of the European Communities Committee the House has an important study under way. We look forward to hearing the contribution from that committee's chairman, my noble friend Lord Brooke of Alverthorpe.

We must engender confidence in change, while recognising that disruption in people's lives is not a good thing in itself. It was one of my responsibilities at the TUC to convene representatives of managerial and professional representatives. In recent years there has been a massive groundswell of concern among them about almost every aspect of the contract of employment--whether working time, holidays, health issues and, in some cases, new technology. It is actually a big growth area of trade unionism.

According to one survey, two-thirds of managers are subject to restructuring in any one year. Performance-related pay may be here to stay, but not

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everyone thinks that he is on this earth to vie with Sir Alex Ferguson as far as concerns his contract of employment. However, people do want a benchmark of quality for their contract. I have been a member of a so-called "high level" EU group on benchmarking. It is clear that adopting best practice between the countries of Europe on such questions as contracts of employment and contracts for service provision is a very useful way forward.

Women's share of employment has perhaps been the most significant structural change in recent years: 46 per cent of the labour force are now women; and about 70 per cent of all women are now gainfully employed. In the presence of my noble friend the Leader of the House (and Minister for Women), I need hardly add that women's issues have been given unprecedented prominence by this Government. They have, for example, implemented EU directives on such issues as part-time workers, fixed-term contracts and parental leave, all of which are clearly of central importance in improving the quality of women's contracts of employment and are also part of what is now called, as a new buzz word, "work/life".

Incidentally, those directives were all agreed in Brussels during the past three or four years at the instigation of the trade unions and then negotiated with employers under the Social Chapter of the Maastrict Treaty--though you would probably never know that if you relied on the press releases of the CBI or, for that matter, those from the DTI. Moreover, they are one of the most popular aspects of Europe in Scarborough and Scunthorpe, and also perhaps--I would not be surprised--among readers of the Daily Telegraph.

If we want Europe to become more popular, then any idea that these are the kind of policies we should keep out of sight is eccentric to say the least. But we must not exaggerate the number of people who are on short-term contracts at this stage. In 1999, temporary employment--that is to say, fixed-term contracts--represented 6 per cent of the labour force, if anything falling slightly. More traditional contracts continued to dominate the labour market. In 1999, they accounted for over 80 per cent of all work. Part-time work has shown a slow rise, increasing from 19 per cent in 1984 to 22 per cent in 1999.

People often talk about the seven-day 24-hour society. It may have escaped the attention of some people that three shift systems have been the norm for some industries for the past 200 years. They are now less common rather than more, even if call centres now employ two or three hundred thousand people on that basis. About 25 per cent of people say that they usually work on Saturdays; 13 per cent work on Sundays and 17 per cent work evenings. The figure for people working nights is 6 per cent and, as we established in connection with the Working Time Directive, they are basically the same people who have always worked nights; for example, those who work in emergency services, hospitals and hotels, as well as those who work as security guards and cab drivers. There is anecdotal evidence of more unpaid overtime by

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managerial and professional workers, and, of course, by teachers. But working from home via teleworking represents less than 1 per cent of all work.

I turn now to the question of job tenure. Whereas occupational change is quite rapid, this should not be confused--as I am afraid it often is--with the length of job tenure. Currently, 11 per cent work for the same employer for over 20 years, 20 per cent do so between 10 and 20 years and 19 per cent do so between five and 10 years. If you add up all those numbers you end up with exactly 50 per cent, which means that exactly half of working people stay in the same job for over five years. There was no change in that figure between 1985 and 1999.

There are more problems for older men. I would flag that up as part of the debate that has never really got off the ground in a satisfactory way; namely, the relationship between retirement age, pensions and flexible work. I know that my noble friend Lady Turner of Camden, who will speak later, has often addressed those issues. It is, of course, older workers who fear most being left behind in the development of information technology, but a recent poll found that around half of all the UK workforce shares that fear.

We face a range of separate issues in relation to young people. The Government have shown considerable courage in their policies for young people and the socially excluded. The New Deal is now about to meet its target of 250,000 in the year 2000. The dramatic increase in the demand for skills is best illustrated by the remarkable statistic that only 5 per cent of jobs offered are now for the unskilled. The national learning and skills council will have a very impressive budget of £6 billion and must set a target to close the gap in intermediate level qualifications as compared with France and Germany.

We are just beginning to counter the worrying increase in inequality in earnings from work. The minimum wage will start to help, as long as it is regularly uprated. The working families' tax credit is also a big step forward. America is more unequal than Britain or the rest of Europe, but does create more low productivity jobs. Our education reforms will ensure that we do not need to head any further in the American direction, with all that goes with that--hire and fire and winner takes all. Whatever else it is, it is not the "third way". There must be a limit to how far "downsizing" is the one knee-jerk test by the Stock Exchange for shareholder value.

The other major dimension is the regions. Public resources are, of course, crucial in dealing with the gap between winners and losers within the regions, as well as between the regions, as demonstrated by the opportune study by the Cabinet Office on regional and inter-regional disparities. The fact is that we have to run faster to stand still on regional as well as sub-regional disparities.

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Europe is starting to get its act together on active labour market policy, with guidelines on employment policy drawn up between national governments under the four headings of,

    "Promoting entrepreneurship, addressing issues of employability, of equal opportunity and of adaptability".

Feedback from the TUC and the CBI has been positive both at the level of Whitehall and in the regions.

Northern Ireland has started to give a lead on this. I very much look forward to hearing the maiden speech of the noble Baroness, Lady Blood, who is from Belfast. I had some involvement with Jacques Delors leading up to the £200 million fund--300 million ecus--for Northern Ireland which, by all accounts, has led to a number of successful cross-community projects.

Regional disparities in prosperity are also at the heart of our macro-economic dilemma with what can be argued are inappropriate interest rates and exchange rates for one part of the country or another. Inward investment has made a huge contribution to keeping that problem under control and we must not put it at risk. Some 1,000 Japanese companies and 6,000 American companies already in Britain will soon run out of time for an answer concerning our future in Europe. Let us be clear, we are talking here about the British national economic interest.

We must find a stable, competitive and sustainable exchange rate. Many of us, of course, conclude that the zone of stability is the euro zone, after we have negotiated a soft landing. However, that is another debate for another occasion. I hope that I have raised enough issues for a useful debate. I beg to move for Papers.

6.11 p.m.

Baroness Blood: My Lords, it is with a good deal of nervousness that I rise to speak to this House for the first time, but also with a sense of wonderment that someone from my background should be afforded this privilege.

This House represents a world away from the one I normally work in, and I must confess that the thought of being part of your Lordships' House gave me some sleepless nights, but I need not have had such worries as the kindness and friendly welcome which I have received from your Lordships and from the attendants and other staff of this House since I arrived has made my task of entering this House painless and, indeed, a pleasant experience.

In Northern Ireland, as in other parts of the United Kingdom, employment has undergone profound change. In the past three decades, there have been changes in people's values and attitudes towards work--changes brought about by the speed of technological change and information technology, but change has also been brought about by the wider integration of global economies which has reduced the difference in time and distance.

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Within this House, and indeed within this debate today, many will speak from a wealth of experience and expertise on the subject of changing patterns of work, and will be able to quote statistics et cetera. I do not pretend to have this expert knowledge. Therefore, I beg your Lordships' indulgence; I should like to speak, for the main part, from personal experience.

When I first started work many years ago, it was commonplace for most people to stay within one company or trade for most or all of their working lives, but with the onset of new skills, new ideas and new management practice, that idea today would be the exception to the rule. Most people now work to fixed-term contracts, which afford flexibility to the company within the global market but make for a good deal of uncertainty for the workforce. If the employee is not multi-skilled and does not have the opportunity to move between companies or jobs, he or she faces unemployment over and over again.

For the past 10 years, I have worked within the social economy, working on the peaceline in north and west Belfast. It was interesting to note that the preceding debate concerned Northern Ireland. I was told that I should be witty in my maiden speech, but I do not feel witty this week. As I say, I have worked on the peaceline in north and west Belfast, seeking to influence companies to provide employment in an area of high unemployment and poverty, and working closely with government training schemes to train local people in the skills needed to secure employment opportunities when they arise. We have also looked at other ways of generating employment and bringing in funds to help to set up local employment. The noble Lord, Lord Lea, has referred to one of those. But as I have already said, many of these opportunities are short-lived. Because of the effect of change in working practices many people who take advantage of government training schemes and are lucky to secure a job find that, at best, the job lasts only one to two years and they then find themselves unemployed again.

I give an example; I know the young man concerned quite well. A young man (who has a wife and baby to support) is pleased to secure employment in a local supermarket. He comes off benefit and looks forward to supporting his family. The pay and conditions are not the best, but he views this as an opportunity to stop being an unemployment statistic. Twelve weeks later he is told that this will be his last pay packet. This has happened to this young man three times in two years. Can we imagine the loss of confidence to the whole family when once again the young man has to "sign on" the unemployment register?

That example could be repeated over and over again, but such are the daily happenings within the changing patterns of work in today's inner-city communities within the United Kingdom. We often read and hear about the breakdown of family life and social values, but can we wonder at that when so many of the values that we took for granted as we grew up would seem today to be built on shifting sand?

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It has often been suggested that Northern Ireland is particularly well placed to take advantage of the opportunity created by an extended European market, by its demographic factors and the excellent reputation of its workforce. It is also suggested that these positive factors must be matched by a perceived ability to adapt to the requirements of foreign-based companies in terms of their structures, organisation and industrial relations practices. However, we in Northern Ireland believe that this should not be an exclusive approach. There must be a continuing pressing need to develop Northern Ireland's indigenous sector as a fundamental part of our community.

Finally, the decline in traditional clerical functions within companies will impact more on women to a greater extent than on their male counterparts. In the recent past, it was women who tended to be part time or be involved in job-sharing schemes. They also tended to be mainly employed in what were regarded as non-core activities. The contracting out of these peripheral functions means that female jobs are more likely to be placed in jeopardy. As the noble Lord, Lord Lea, has already said, of course women have made progress and have established a foothold in managerial, supervisory and technical positions and within the political movement. While these gains are important as role models for other women at lower levels in organisations, unfortunately these are the kinds of jobs that are most at risk from de-layering and the present drive towards flatter organisations.

I am grateful for the opportunity to speak in your Lordships' House for the first time and I look forward to becoming a voice for the community of Northern Ireland in this House.

6.17 p.m.

Lord Howell of Guildford: My Lords, it is my great pleasure to congratulate the noble Baroness, Lady Blood, on an excellent maiden speech. She speaks with tremendously detailed knowledge, prescience and authority about a part of the United Kingdom which I know from the past. In the odd whirl of events that affect Northern Ireland, I was at one stage a Minister of commerce and of employment in Northern Ireland. Although that occurred many years ago I remember the positive qualities that the people of Northern Ireland showed, and continue to show, in adjusting to new labour market conditions. Over all the years and through all the bloodshed and difficulties I have never lost faith in the colossal ability of the people of Northern Ireland to be almost ahead of the game in adjusting to the new network age and to the new demands of global competition and of the global economy. They have done that in the past; they are doing it now; and they will do it in the future. The noble Baroness gives voice to the hopes and the immense weight of common sense which will see them through.

I turn to the broader themes of the debate. This is nothing very new. Some 25 years ago pioneer thinkers such as Charles Handy and James Robertson told a

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disinterested world that the whole pattern of the labour market was about to be transformed: that large blocks of employment were going to dissolve and whole categories melt away; that we were moving towards an era of portfolio jobs, of flexitime and of part-time and self-employment; and that there would be a huge rise in the participation of women in the labour market, but not in the traditional job patterns. They were telling us 25 years ago that the division in analysing the economy between manufacturing and services was already out of date. Manufacturing was shot through with services; services were intermingled with manufacturing; and the whole was permeated by the then embryonic information technology, which belonged to no category at all.

These matters were being set out in great detail by those seers, those prophets. They were telling us that the old familiar landscape of a job for 47 hours a week, 47 weeks a year and 47 years of one's life--which was the normal pattern, the one which all analysts, statisticians and policy makers tended to think about when they spoke about the labour market, employment and unemployment--was already dissolving.

Those ideas were highly uncongenial at the time, largely neglected and resisted. And they have continued to be resisted even to this day. I was reminded, reading today's newspapers, that one of the great citadels of resistance all along to the fact that the labour market has changed has been that noble institution, the Inland Revenue. Today what was supposed to be an avant-garde forecast has become the orthodoxy. Less than half the working population is employed in full-time, single jobs. That is confirmed by the Office for National Statistics and by the newspapers this morning.

But the Inland Revenue does not recognise that. It remains totally hostile to the self-employment patterns, to the portfolio working patterns, and to the new world which involves more than half of the working population. I spent 30 years of my life in another place as a Member of Parliament, year after year, on behalf of numerous constituents, trying to persuade Treasury Ministers to persuade the Inland Revenue that it should adjust the patterns of taxation and the schedules to take account of this totally new kind of labour market--broadly without success. Indeed, even now, according to today's Financial Times, the Inland Revenue is about to introduce a new series of rules in April which will make it much more difficult for this half of the working population to develop their skills and talents and to work properly. That is regrettable--I suppose it is understandable--and it should be noted by the policymakers, particularly those who are long on the rhetoric of the new flexible economy but a little short when it comes to making policy adaptations.

As Handy observed at the time--a quarter of a century ago--his ideas were met with "a complete conspiracy of silence" on the part of policymakers, politicians, sociologists and economists for the reason that they did not seem to fit any of the traditional preconceptions. They were not at all popular either.

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For most people, except the most independent-minded, energetic and entrepreneurial, the prospect of working outside the safe and predictable area of full-time, regular, heavily unionised employment--with a hierarchy of management from whom to take guidance and orders, and with the proper protection of labour laws and so on--seemed thoroughly frightening; they did not want to know about it.

Unfortunately, that was not the choice. Even while people were saying, "This cannot happen; it must not happen", it was happening. Policymakers found that these unwelcome events were confronting them with entirely new dilemmas. They might not wish it to be so, but huge new forces were coming together in the economy, dissolving the old patterns completely. Out of the window went the kind of image in the Lowry paintings of people crowding in their thousands through the factory gates in the morning in response to the siren. All that old world was vanishing. Encouraged by dawning new technology, as the noble Lord, Lord Lea, reminded us--I am still talking about the past-- livelier firms were moving heaven and earth to contract out, to miniaturise their work units and to bring in more flexible work times and arrangements. Thousands, indeed millions, more women were working and home life and business life were being transformed. A huge expansion was under way of the informal economy--and, incidentally, of the black economy, hence the worries no doubt of the Inland Revenue--with new occupations and knowledge-based services developing of which the policymakers had not dreamed and of which no mention whatever was to be found in economic textbooks, nor yet in the works of best-selling authors like J K Galbraith and others.

A quarter of a century ago, no one had heard of the Internet or globalisation, and privatisation was in its infancy. Looking back, we can now see that a completely new network pattern was developing--held together by work and social relationships and other sensitivities--and that this was emerging with amazing rapidity and pushing aside the familiar hierarchical structures of business, politics, labour organisations and everyday life.

It was not doing that completely; I must not overstate what has happened. Indeed, the noble Lord, Lord Lea, warned against doing that. People such as Francis Fukuyama have reminded us that despite all this global networking and the rise and empowerment of the individual and so on, people prefer to work in hierarchies. Fukuyama presents us not with "Homo Economicus", who never existed except in hermetic and abstract economic theory, but with "Homo Hierarchicus", who by nature likes the world of status and place and is far more comfortable in that kind of situation than in the milieu of risk and ill-defined networks.

So motives for wanting to stay with the hierarchy concepts obviously differ, as do people. Some people want status, want to be the boss, want to be recognised as leaders and as exerting various authorities and so on, and there are those who want the familiarity and

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freedom from responsibility which a proper and safe place in the hierarchy brings. "Each in their place and a place for all", to quote the Duke of Wellington.

Businesses which are trying to drive through unsettling new arrangements or change direction sharply need leaders, strategists and generals; they do not need networks or flattened management structures. Those things which are all the fashion have to come later. So that is the counterpoint to the feeling that the entire world of labour is being atomised and unravelled.

Having said that, despite all those trends, Handy's predictions have now become commonplace. All around us this is now the new pattern. The only trouble is that the intellectual framework of debate has remained almost frozen. The thinking fraternity, sociologists, economists--especially economists--and academic analysts, with their supporting army of statisticians, have been unbelievably slow in appreciating and understanding, let alone explaining, what has occurred.

This is especially so among the social scientists and groups such as the progenitors of the so-called "Third Way", of which I have made a very close study. They seem to have alighted with surprise on trends such as the evaporation of traditional work patterns, the growth of voluntarism and the merging of manufacturing and services. These are trends, obvious to the people I have mentioned and to other people for 20 years, to which the Third Way enthusiasts seem to have arrived, breathless, very recently, as though they were new insights. In fact they have been long understood, debated and resolved outside the little world of the Third Way clique.

In the current debate the picture of what information technology is supposed to do to the labour market is deeply embodied in the public mind. It is fostered by much public comment--and it is almost entirely wrong. The conventional thinking insists that new technology is bound to eliminate jobs, replace people with incomprehensibly fast and powerful machines, replace unskilled and semi-skilled workers with fewer skilled technicians and create the foundations of a jobless society. In so far as a mass of workers has a future in such a scene, it is argued, it will be in low-skilled, low-paid service jobs, creating new divisions and social polarisation.

In the real world, the pattern now evolving before our eyes is going in a diametrically opposite direction. Jobs are disappearing and appearing, as we know. There is a pattern of gains and losses and winners and losers. But the much more significant pattern overlaying it is one of a vast new variety and complexity in which the old job classifications are meaningless and in which the labour market becomes a fragmented mosaic of new skills, flexible work times and spread out locations. I would not for a moment question the issue debated in your Lordships' House yesterday; that the totally unskilled need to be vastly upgraded to acquire skills and that all efforts must be thrown into that task. But one must keep the matter in perspective. Those prepared to perform jobs which

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require a mixture of hard physical work, as in construction, but also a good technical knowledge, will be increasingly valued. I was fascinated that the great manual of the network society, Manuel Castells' volume, The Rise of the Network Society, points out that work in agriculture--farm work and land related work--is actually rising in the advanced societies. All the textbooks stated that it would fall, but more and more people are being drawn into that sector.

The overall message is clear. Information technology and its widespread application to all walks of life has little net impact on levels of employment. It creates a world in which ponderous giant trade unions, locked into dying categories of skills and industry, have a dwindling part to play. That explains entirely the huge decline in trade union numbers in several countries, including the United Kingdom. It creates conditions in which the building blocks of class warfare and social division have crumbled. Bosses and capitalists are no longer the identifiable enemy, ever available for demonising. With the help of wider ownership, those distinctions have begun to blur. The information age has created massive popular ownership on a huge scale far more quickly than many of us dreamt of 10 years ago. That too has created totally new conditions.

Not only academics but also policymakers, political parties and leaders have been slow to the point of paralysis in responding to the new trends. Political speeches and vocabulary continue to be couched in terms appropriate to a vanished employment age. Pretensions of economic control over events remain undiminished. Officials and departments continue to serve up categories and concepts for parliamentary and public discussion which bear no relation whatever to the real world or to the everyday events and influences shaping work, business and society. I am glad that your Lordships' House--your Lordships' transitional House--has shown that it can address those issues in today's terms instead of the terms of yesterday's pretences.

6.33 p.m.

Baroness Turner of Camden: My Lords, I welcome the opportunity to participate in the debate. I am grateful to my noble friend Lord Lea of Crondall for introducing it and for the stimulating way in which he did so. I am extremely pleased that the noble Baroness, Lady Blood, chose this debate in which to make her maiden speech, which I found interesting and, indeed, extremely moving. I hope that we shall hear a great deal more from her in the future.

There is no doubt at all that there have been changes in the pattern of employment in the past 20 years or so. Those seem largely to have been brought about by changes in technology, by the information revolution and increasing globalisation--although of course political policies have played a part. We have seen the decline in Britain of heavy industry and the growth of technology-based industries. That has meant that some former centres of manufacturing industry have become impoverished, with high levels of

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unemployment--particularly male unemployment. It has led also to a growth in areas devoted to newer industries--notably, but not only, in the south-east.

There is a general perception that such factors have wrought a major change in the way in which working lives are spent. A belief exists that years ago, in some golden age, the majority of the workforce were employed by a single employer for all their working lives, but now this has been replaced by a new flexible pattern of constant mobility and movement from job to job. That view is overstated. I have a copy of an interesting report prepared for the National Association of Pension Funds, The flexible labour market: implications for pension provision, which also points out that that view is overstated. Such a lack of security was almost always the fate of lower earners and of manual workers, except those in communities such as that of mining, where people tended to remain rooted in their working environment.

In recent years, some areas of white-collar employment, hitherto regarded as safe and secure, have ceased to be so. That is particularly true of financial services, where the impact of technology and ever increasing competition has resulted in mergers, which themselves have caused job losses. Unions have often protested at the way in which such mergers have been carried out, with little advance warning for the staff involved. Sometimes the first that staff have heard of a merger has been in a radio announcement, together with a statement that there would be a loss of some 5,000 jobs. Unions believe it is wrong that the interests of staff should be entirely disregarded in pursuit of greater profitability. I share that view.

Those changes have for the first time had a major impact on white-collar male staff. Many such employees, made redundant in their mid-50s, do not join the labour market again. That often represents a loss of skill and experience that could be ultimately disadvantageous. We are often told that we are all living longer. Usually, we are told that in the context of discussions about how much the NHS is likely to cost later in this century. But one of the ways of keeping healthy is to have an active involvement in the world around one, in addition to being economically productive. So there are benefits all round in keeping older people in some sort of employment. I believe that there should be legislation against age discrimination, although I understand that the Government's preference is for a code of practice. Perhaps the Minister will enlighten the House on that point.

Another major change has been the involvement of women in the workforce in a way not envisaged 40 years ago. My noble friend Lord Lea mentioned that point. There has been an increase in part-time employment. In 1998, 25 per cent of employees worked part time--the majority of them women.

It is clear from recent research that most part-time employees work part time because they prefer it. Only 11.5 per cent said they would prefer to work full time. It is mainly women with young children who find such a work pattern acceptable. However, there is a need to improve the status and conditions of some part-time

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work and I therefore welcome the consultation exercise which I understand is currently being undertaken by the Department of Trade and Industry.

The Government have been particularly keen to get lone mothers into employment, believing, with some justification, that work is the way out of poverty. Recent research published in the November issue of Labour Market Trends indicates that while the employment of what are called "couple" mothers--that is, mothers who are married or in some sort of relationship--has increased to 68 per cent from 61 per cent a few years earlier, that of lone mothers has remained stable at around 44 per cent, having risen more slowly.

The survey points to a widening gap between the employment of "couple" mothers and lone mothers. A number of factors have been indicated for that difference: lone mothers' relatively low involvement in the labour market before parenthood; their lesser access to childcare; their concentration in areas with poor local job opportunities; and features of the tax and benefit system that limit their financial gains from employment. There have been several pilot schemes and it is notable that the lone parents who have most profited from them and secured employment are those who already possess educational qualifications which gave them access to reasonably well paid jobs.

On the other hand, it is my view--I have said this in social security debates from time to time--that pressure should not be exerted on lone mothers of young children to work outside the home unless they really want to do so. There seems little point in paying for expensive childcare if the mother would prefer to look after her children herself while they are young and perhaps take advantage of educational opportunities available, through home study, so that she can take advantage of job opportunities when her children are older. We should have in place social policies that make such choices genuinely voluntary.

Despite the increasing involvement of women in the labour market, there are still problems, as the recent survey of the Equal Opportunities Commission indicates. Women's earnings are still substantially lower than those of men, and most of the low paid are women. The Government have made a good start on this problem through the introduction of the minimum wage and the working families' tax credit. Although I think the minimum wage has been set too low, it has still benefited about 2 million workers--most of them women. Moreover, the predicted job losses did not take place. We must all welcome the Opposition's conversion to the cause of the minimum wage. It is largely due to its introduction that the EOC can report that women's earnings are now 80 per cent of men's rather than 77 per cent, as formerly.

Nevertheless, low pay still remains a major problem. A substantial minority of the British workforce spend their entire working lives in a cycle of disadvantage, moving between low-paid jobs, often with spells of unemployment or inactivity in between. Those who are low paid tend to be older men, some women or people with few educational qualifications, and they

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are likely to experience persistent low pay. Young people may be among the low paid at the beginning of their working lives, but many tend, as they change jobs or make progress within an organisation, to become established on a stable upward trajectory which peaks in their late 40s.

It will be seen, therefore, that the emphasis on education and training, which has been such a basic feature of government policies, is correct. Incidentally, partnership with the trade unions is important. Unions are keen to ensure that their members take advantage of whatever employment training opportunities are available. I commend the Government on the improvements that have been introduced as far as concerns trade union recognition and trade union legislation. Those changes have not led to unemployment, as was predicted at the time.

We are currently in an economic boom. Unfortunately, not everyone is benefiting from it. Those who are not are likely to be from disadvantaged backgrounds, with poor educational attainment. Quite obviously, economic upturns should, as far as possible, offer benefits to all. So far, they have not done so. I believe that the Government have in place policies which help and which can be built on. Yes, the employment scene is changing. The changes will favour the skilled, the educated and the entrepreneurial. But disability, age, and social disadvantage should not lead to social exclusion. The changes in employment patterns--the subject of today's debate--should not involve the creation of an underprivileged underclass.

6.43 p.m.

Lord Dahrendorf: My Lords, this is one of our Wednesday debates. I am delighted that we can continue to have them, and continue to have them in the middle of the week. It gives me an opportunity to take up the challenge offered to us by the noble Lord, Lord Lea of Crondall, and to discuss, at least briefly, a problem without actually offering a solution, which I suppose is what we usually do on Mondays, Tuesdays and Thursdays. The earlier debate today strikes me as having also been one which presented us with a problem without having a solution. But that is another matter. In the process, perhaps I can do a little to redeem the thinking fraternity, which attracted the gentle irony of the noble Lord, Lord Howell of Guildford.

Like the noble Lord, I believe it is a mistake to use traditional language and concepts as if the world to which they apply had not fundamentally changed. That is true for work; it is also true for a concept like unemployment; and it is certainly true for a concept like full employment. The major changes that have taken place have been mentioned, so I can be brief on this point. But perhaps I may remind the House of two processes which strike me as particularly important. The first has been mentioned by almost everyone who has spoken. It is the massive growth in non-standard employment. By that I do not merely mean part-time or fixed contract employment but also a new form of self-employment. It is not strictly self-employment as

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the term used to be used. It ties individuals to particular employment contexts but at the same time turns them into self-employed people, whether self-employed porters at a television station or self-employed drivers for a company.

I know that this is one of the cases where the glass is both half empty and half full. I shall use figures in my comments which come largely from what I regard as the most informative empirical study on the whole area of work and life. I refer to the British Household Panel Study, conducted at the University of Essex on behalf of the Economic and Social Research Council, and in particular to the publication by Jonathan Scales entitled The Future of Work and Lifestyles, which was produced for the Debate of the Age organised by Age Concern.

In 1970, 20 per cent of people were in non-standard employment. In the early 1980s, the figure had risen to 30 per cent. By the late 1990s, the figure had reached 40 per cent. I am not suggesting--and no one would suggest--that that can be extrapolated to 100 per cent. But it is an almost undeniable fact that we now have two types of employment. We have standard employment, with some of the certainties and uncertainties which it has always had, and we have a massive incidence of non-standard employment.

The other important trend--little has been said about it so far--is the strange reduction in the proportion of the economically active population. That is true both at the young end--at any rate for men, who find it difficult to enter the labour market--and at the older end; again, primarily for men but not only for men. Here we have some of the elements of two of the major social problems facing us.

In the case of young men who find it hard to enter employment, we are quite close to some of the problems of crime which worry us. At the older end, we have very considerable problems for our benefit system. The fact is that, of 61 to 65 year-olds, only 40 per cent are still in employment. Incidentally, compared with other European countries, that is a high figure. In most European countries, the percentage is even lower. The fact that only 40 per cent are in employment tells us a story about the role of work in the lives of our fellow citizens, especially at a time when, fortunately, life expectancy has gone up.

If there were more time, I would outline a third trend which was mentioned by the noble Baroness, Lady Turner, and other speakers. I refer to the strange new inequality which has emerged from changing work patterns. There are some, perhaps a growing number, who seem to have all the disadvantages while others have all the advantages. There are people with a low level of education and income; who are subject to greater health risks; who live in worse housing; and who participate less, generally.

Let me concentrate on the other two trends. The problem that I draw from their existence is that, nowadays, even paid work fails to solve some of the problems that work solved in the past, notably paid work. I do not suggest that that is necessarily a bad

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thing. I do suggest, however, that it forces us to rethink a whole range of issues. I merely mention two, which are of major, and in some cases immediate, significance. The first is entitlement to benefit--in a sense, the Inland Revenue problem, the non- acceptance of changes which have consequences for the way in which redistribution is organised.

Linking benefits to jobs is all very well but, given the new working patterns, it is not good enough. We must try to achieve a greater separation of people's entitlements from their employment. That means that the entitlements must be more closely associated with the individuals, and less directly associated with the jobs that they do.

We see the beginnings of that change in the Learning and Skills Bill that is before the House. I refer to the introduction of individual learning accounts. That is precisely what I have in mind when I argue that changing patterns of work require that benefits become transportable in a more effective way than was the case when they were totally linked to jobs. That is true also in the field of pensions, although I am hesitant to enter into a serious discussion of pensions in the presence of the noble Baroness, Lady Turner, who knows so much more about the matter. It seems to me that the separation of the redistributive elements of the welfare state from jobs is an almost necessary consequence of changing work patterns.

There is another equally serious, if less tangible, point. I speak about it with some hesitation. It is the fact that work no longer provides the degree of satisfaction, meaning or content in life for many that it may have done in the past. To take up the impressive language of the noble Baroness, Lady Blood, work no longer provides the kind of content in life to which many of us have been used.

The survey to which I referred includes an interesting table relating to life satisfaction. One set of figures may be interesting in this connection; namely, a category of people who were employed one year ago and are now unemployed. According to the survey, a third say that they are more satisfied with life; a third say that they are less satisfied; and a third say that life is much the same. I do not want to over-interpret the figures, but it is probably true to say that the relationship between the work that people do and the general satisfaction that they feel in life has become more tenuous. Indeed, work no longer structures people's lives as effectively as it may have done in earlier times.

By the same token--this point is relevant to those who make the provision of work one of the main planks of social policy--work also no longer provides the degree of social control that was implied in the past. I disagree with the noble Lord, Lord Howell, in his praise for hierarchy. Where there is hierarchy, there may be social control. However, one of the changing patterns is that there is simply not the same degree of hierarchy, and social control cannot be exercised through the employment system alone. That is where a very big problem arises in terms of social cohesion.

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Changes in work patterns make it extremely hard to see how societies are knit together and how they are supposed to hold together.

Many proposals might be discussed in the practical field. There is the question of basic incomes and their effect on cohesion, as well as on the transportability of benefits. I am one of those who regard the working families' tax credit as a step in the right direction. It does not get us there, but it is a step in the right direction, and that is better than staying put or going back.

There is the great issue of voluntary activity. I am pleased that, in a speech today to the National Council for Voluntary Organisations, the Chancellor of the Exchequer made an effective plea for strengthening voluntary activity and supporting it, in part, through the instrument of a modernised Inland Revenue and through other means at his disposal. There may be other things that can be done. However, my problem is that work does not do the trick. Given changes in expectation and working patterns, the view that jobs can still be used to the same end as they were often used in the past is misguided.

At present, many trends work against social cohesion. The new inequality certainly does not help. Unless we take the matter as seriously as it needs to be taken, we run the risk of creating societies that call for authoritarian leaders rather than relying on civil methods. Against that background, tackling the consequences of changes in the world of work is essential.

I conclude with an abject apology. Owing to shifts in the timetable for this debate, for the first time since joining this House I may not be able to be present for the entire debate. However, I promise that, for me, this occasion will remain the singular exception.

6.59 p.m.

Lord Puttnam: My Lords, I, too, am grateful to the noble Lord, Lord Lea, for introducing this timely debate. It has far-reaching implications for the future of all of us. I should like to congratulate the noble Baroness, Lady Blood, on her maiden speech. It was wonderful to hear an authentic voice of experience in this House. I am delighted that the noble Baroness has joined us and look forward to hearing from her on many future occasions.

I think I detected a sense of frustration in the remarks of the noble Lord, Lord Howell. I share that frustration. It is odd that in the year 2000 we have to reiterate and anticipate facts which have been relatively common knowledge for 20 years. We all share some blame for the fact that as a nation we are not better prepared for the changes in the workplace that overtake us.

The world of work is undergoing some fundamental changes, and I believe that they will affect every aspect of our lives. "The Internet economy", "the wired world" and "the learning society" are no longer just buzz words; they increasingly define the world that we inhabit. The days when any nation such as ours could remain competitive based on large manufacturing

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industries, or a largely agrarian economy, are rapidly drawing to a close. There will still be a place for those industries; we still need refrigerators and food to put in them, and cars and the fuel to power them, but these industries can no longer serve as the locomotives of our particular economy if we are to have the remotest chance of remaining competitive on a global stage.

I suspect--in fact I know--that some noble Lords remain sceptical about the new e-economy. They imagine that it is simply a blip along the timeline of the ordinary working world and that somehow things will eventually settle down and return to the world lamented by John Mortimer in last Sunday's Observer where life revolves around the village post office, grocer and local craftsman. If one looks at the ordinary lives of many in the country it is true that things seem to be going on much as before. People quietly go about the same or similar jobs that they have had for the past 30 years. Every time there is a dip in the share price of Yahoo or it is reassuringly possible, somehow, to dismiss the Internet revolution as yet another "over-hyped, over-here" phenomenon created in the fevered imagination of some American futurologist.

I no more wish to be viewed as an alarmist than to stand here 20 years from now shaking my Zimmer frame and saying, "I told you so!", but in our anxiety about the future we are in danger of becoming almost a nation in denial. We must acknowledge and adjust to future realities, or we shall be left floundering in their wake. Growth in the western economies is now being driven by the astonishing rate of the development of the world-wide web and e-commerce generally. When President Clinton came to office there were just 50 websites in the entire world; now pages are being added at the rate of over 100,000 per hour. Another 100 million users will come online this year. But in the end it is not the technology itself but the way that it is used and regulated which will define the scale and nature of these changes.

In some respects it is reminiscent of the development of the railways in the 19th century, only much more rapid and, to some extent, profound in its implications. It is well worth remembering that, in the end, what changed rail travel into a genuinely mass form of transport was not any particular technological development but a simple piece of parliamentary legislation which required every public railway to run trains on a daily basis, and at appropriate times, to enable working men and women to travel to and from their places of work at a flat fare of a penny a mile. It was perhaps the first recognition of the benefits that can flow from what we have come to call "universal access".

The value of the railways in both social and commercial terms lay precisely in the notion of universal access. In the space of a very few years cheap travel swept away those factors which had, since time immemorial, kept the vast majority of the population at home or close to the place in which they were born. The railways made it possible for one to travel further afield for work; to read the same morning newspaper, even in rural areas; to send a letter to the other end of

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the country overnight; and to visit a friend or have a day out. It even made possible the development of today's Football League. The greater the access to rail travel, the more varied became its impact on society and culture; and the more varied that impact the more it became an indispensable part of the life of the whole nation.

The stock prices of the railway companies soared and tumbled just like the Internet start-ups of today, but the railways themselves were here to stay. They changed our economy and the social fabric of the nation for ever. I believe that the impact of digital communication on the information age will in many ways parallel this, albeit in a very different form, perhaps on an even more dramatic scale.

I shall try to illustrate the scale of change in another way by using the London Stock Exchange as an example. In a recent article in Science and Public Affairs, David Potter, chief executive of Psion, observed that in 1984 the 10 largest firms by value quoted on the London Stock Exchange were: BP, Shell, GEC, ICI, BAT, Glaxo, Marks & Spencer, Grand Metropolitan, BTR and Beecham. Their combined market value at that time was £40 billion and their net assets were also £40 billion. Between them they employed a little over 1 million people. Today, the 10 largest firms are: BP-Amoco, Shell, BT, Glaxo-Wellcome, HSBC, Lloyds-TSB, Smithkline-Beecham, Vodafone, Diageo and AstraZeneca. Their combined value is £340 billion and their net worth is £90 billion. They employ about 750,000 people. Six of those companies deal in intellectual property rights (IPRs) and are not valued for their capital stock; nor is any of them an "industrial" in the accepted or traditional sense of the word.

I give another more topical illustration: Vodafone's 113 billion dollar acquisition of Mannesmann last week. As Lex observed in Saturday's Financial Times, this new company will be worth 16 per cent of the entire Footsie 100. If one adds together the food, drink and tobacco sectors, throws in electricity, gas and water and then aerospace, defence, steel, engineering and construction, all of those sectors together just about equal the value of the newly-enlarged Vodafone--which was a company that did not even exist a few years ago.

One of the implications of all this is that the new economy is already with us. Regardless of the share price of Yahoo today, tomorrow or even a year from now, like the railways this is an economy that is here to stay. It is a global economy which tears down trade and cultural barriers alike. Just watch the impact that Vodafone's bid for Mannesmann will have on other long-sheltered titans of German industry. Suddenly, they are as vulnerable to predators from across the world as anyone else.

In this new "knowledge economy" value resides overwhelmingly in intellectual property rights--human knowledge--which are now termed intangible or weightless goods. The noble Lord, Lord Lea,

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explained exactly what that term meant and from where it came. In the new economy competitive advantage increasingly means knowledge advantage.

As I said in this Chamber only two weeks ago, all of this has an enormous impact on patterns of employment. The job for life, the nine to five working day and the single male breadwinner are very much things of the past. Whole industries are being restructured; payroll, procurement and pensions are all moving online. Gone are the days of the set, but comforting, pattern of education, work and then retirement. Increasingly, individuals must adapt to the rapidly changing demands of the job market.

I offer a couple of small but quite telling examples. Between 1979 and 1998 the number of self-employed people among the managerial and professional classes in the UK grew by 300 per cent. I was told only last week that today one person in six in Britain works for a business that did not exist five years ago.

All of this throws up enormous challenges for policy makers. How can we provide for such a varied pattern of work? What will these changes mean for the non-work aspects of our lives, including our families and leisure? How can we ensure that people have the opportunities to act flexibly to meet the new demands of the future workplace?

I listened with real interest to the noble Lords, Lord Dahrendorf and Lord Howell, and my noble friend Lady Turner, who spoke about the commercial and social impact on society. Above all, it poses a massive challenge for our educational system. We need to tie our learning institutions ever more firmly to the world of business. Many of our universities remain relatively dislocated from industry; and that is certainly not so in the United States, where business and higher education work hand in glove with industry and government. The result is an economy that plays fully to its strengths, where the academic world meshes with business and government to create a seamless web of support for America's strategic and commercial interests. I do not pretend that it is an immaculately conceived fact of life, but it is the net effect of industry, government and business working together with the academic world to ensure that they move forward as a coherent modern economy.

President Kennedy once said of his country,

    "Our progress as a nation can be no swifter than our progress in education".

At the beginning of the 21st century that statement carries a ring of truth that he and his advisers could scarcely have imagined possible.

It is a cruel fantasy to believe that the UK can maintain a competitive economy without embracing the fact that our entire economic infrastructure is being transformed by the digital technologies. Increasingly, we as a nation will be judged by the quality of our skills and the depth and versatility of our knowledge-based workforce. That is why the quality of our education system, and of our educators, is of absolutely fundamental importance to any future prosperity of this country. Change, not just in

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employment patterns, but in the economy more generally is all around us. We diminish it or, worse still, ignore it at our peril.

7.11 p.m.

Lord Haskel: My Lords, I, too, congratulate my noble friend Lord Lea on introducing the debate. Employment patterns are changing. I welcome this opportunity to debate these changes which affect the working lives of us all.

It seems to me that the elements causing these changes are a commitment to enable all to work in the face of the harsh realities of the global market; and the realisation that a healthy economy and a fair society are not opposites but the same side of the coin. So how will those factors affect employment patterns in Britain? What changes will they bring about?

Some of the pieces of the jigsaw are already apparent. My noble friend Lord Lea told us about the new economy. He is right and I thank him for explaining it to us. It is crossing the Atlantic from the United States--and why not? Look what it has done for the United States over the past 10 years. Ten years ago the American economy was in decline. Today it has outpaced us all in productivity and job creation. The key to the new economy is information technology and the Internet.

I agree with my noble friend Lord Puttnam about the importance of e-commerce. That is important in the real world. However, I differ from the conclusions he draws about the stock market world. The stock market world is distorted by crazy share prices, the current fashion for high technology, and by opportunistic financial short-termism. That is why is 40 per cent off its peak and Yahoo is 35 per cent off its peak while, in the rest of the world, life goes on as normal. These are huge changes.

Information technology and e-commerce is only just starting here. However, its impact on employment patterns will be enormous and inevitable. Last week British Airways announced that 50 per cent of its ticket price sales will be via the Internet by 2003. The Prime Minister has undertaken that 25 per cent of government business will be transacted over the Internet by 2008. He obviously means it because he has appointed an information technology czar to ensure that the skills and technology to carry that out are firmly in place.

We no longer need computers. Our family-friendly television sets are beginning to serve just as well; so are our mobile phones. As British firms try to compete with low labour costs overseas, the pattern of jobs is changing in the manufacturing sector. The noble Lord, Lord Howell, reminded us that that has been happening for 25 years. But today the situation is different. British firms have turned to information technology and mass customisation. Indeed, the division between manufacturing and services is becoming more and more blurred. Mass customisation is itself becoming a service, while in the world of the new economy, services become experiences which have to be available seven days a week, 24 hours a day.

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Therefore, I think that we can discern a more ruthless economy based on attacking the status quo and the entrenched players with new technologies and working methods that improve or replace earlier ones. That ruthlessness will certainly change the pattern of jobs, particularly in retail. It will mean many lay-offs as the old skills become obsolete and new ones are needed. The noble Baroness, Lady Blood, told us that in her excellent maiden speech. More change, more insecurity and more stress will be the pattern; perhaps all with the same employer, not because of job protection which has no place in the new economy, but because employment nowadays is continued at the same firm by continuous learning and training. Quite rightly, the Government are making that a cornerstone of their policy.

But if the new economy is to be successful, it requires not only new skills, but also a higher degree of commitment and responsibility from both employers and employees; for example, trusting people with sensitive information which has been kept previously confidential. The new economy demands new attitudes towards team working and loyalty. The new 24-hour service economy does not require the long hours that seem prevalent in this country. My noble friend Lord Lea reminded us about shift working. It requires flexibility, but not the flexibility of easy hire and fire. It requires employers to be flexible and helpful over hours, and employees to be reliable.

I expect the future pattern of work to be one of flexible hours with job-sharing instead of a long working week, especially as more women work. Social trends tell us that a quarter of women working full time work flexible hours.

I do not believe that we shall all be working at home on computers. The case for teleworking has been overstated. It may mean that some highly talented people may work at home perhaps for more than one company, but in general people need to react with people. Creativity and innovation rarely happen in isolation. Human contact cannot be replaced by information technology. Indeed, according to recent figures, the percentage of the workforce who telework has been pretty static for the past couple of years.

Neither do I see any great increases in leisure time. Ten years ago we were told that the biggest social problem today would be filling our leisure time. Instead, we are working the longest hours in Europe. What I think is inevitable is rising employment in personal services, as we all become better off--that half of the economy which is not affected by information technology. The noble Lord, Lord Dahrendorf, referred to it as the non-standard employment.

Information technology is more likely to replace financial trading before it replaces gardening, childminding or recreation. That will mean working all hours, but not necessarily for low pay.

That is how I think that the new economy will change our patterns of work. But there will be other effects. It will increase the inequality of earnings. My noble friend Lord Lea told us that 5 per cent of jobs

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offered are for the unskilled. Looking at social trends, it appears that self-employment is becoming the pattern for the unskilled. Sixteen per cent of men in work in the spring of 1999 were self-employed. One-quarter of these worked in construction and were mainly white. Of the remainder, by far the most were from the Indian sub-continent and worked in distribution, hotels and catering. They are victims of the ruthless economy--the socially excluded--referred to by my noble friend Lady Turner. The stress of the ruthless economy will increase pressure on personal and family life. To make it all worth while people will want a government who deliver a sound economy with low inflation, low interest rates and tough regulations from competition.

But social justice and fairness are also part of this sound economy. That too will affect the patterns of work. Indeed, the effect has already begun. My noble friend Lady Turner told us about the minimum wage, the Working Time Directive and the working families' tax credit.

All that points to an enormous amount of power in the hands of the leaders of business and industry. Perhaps these are the authoritarian leaders to whom the noble Lord, Lord Dahrendorf, referred. How can this be balanced so that employment patterns are not just a matter of their whim? Regulating employment is fine and necessary, but it is only part of the answer because after a while diminishing returns set in. Regulation has to go hand in hand with the creation of quality jobs and quality work in maintaining a healthy economy so that Britain is a good place for business. That is a far greater incentive than any kind of protection.

Employers then have every encouragement to provide training and opportunities for lifelong learning and to provide work because they need the staff and have a loyalty towards them.

But power is increasingly held in the global private sector. Decisions taken outside our borders affect employment patterns here in Britain. What can we do about that? In addition to a sound economy, perhaps the Government could look at the United Nations report on business and human rights, which was released at the end of last month. It outlines nine core principles on standards of labour, human rights and the environment. It seems to me that the economically powerful would be happy to accept these principles in return for the sound economic conditions provided by the Government. That seems sensible to me because, after all, the business of business is to serve society.

7.22 p.m.

Lord Eatwell: My Lords, I must confess that at first I was a little puzzled as to how to approach the topic of this debate, for changes in employment patterns are essentially the outcomes of the interaction of a complex range of processes. It is those processes which are the determinants. It is the patterns of employment which are simply determined.

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So it seems to me that the real issues at stake in this debate are those determinants of the patterns of employment, predominantly demographic, economic, technological, and political, and the relationship between those determinants and the economic well-being of the British people. It is therefore no accident that many noble Lords who have spoken already have focused on technical, economic, political and demographic changes in describing the changes in the patterns of employment in the UK.

I do not intend to deal at length with the demographic issues, important though many of them are. The increased labour market of participation of women, the ageing of population and the high mobility and economic flexibility of the immigrant population have all had, and are having, a significant impact on the performance of the economy and on the pattern of employment. They are, if one likes, the supply side of the employment equation as, to a certain extent, is the important issue of the quality of education and training the major determinant of the flexibility of the labour force as a whole.

Instead, I wish to concentrate on what is really the fundamental economic factor which determines the pattern of employment and indeed its overall level. That fundamental factor is the demand side of the labour market. Later on, I shall turn to some of the political and policy issues.

The size and composition of the demand for labour depends, so far as the private sector is concerned, on the growth and decline of industries. But even here there is no one-to-one link between the growth of a particular industry and employment in it or indeed between the competitiveness of an industry and the pattern of employment in the economy as a whole.

For example, a vital component of the UK economy today, as indeed for many years past, is our manufacturing industry. That is because it produces a very large proportion of our tradeables--that is, the goods we sell abroad and/or the goods which compete against imports from abroad. It is also because the performance of manufacturing industry is one of the prime determinants of the overall growth of productivity and hence of the competitiveness of the economy.

The peculiar importance of tradeables is that, at high levels of domestic demand which are enough to secure something like full employment, the balance of what Britain buys and sells must be sustainable. That means that we must be able to compete. If we cannot compete, then high levels of demand will simply suck in more and more imports and we shall run up larger and larger foreign debts to pay for them. So a competitive industry producing competitive tradeables is one of the basic components of any sound employment policy.

But, while a competitive industry is the indispensable foundation of a sound employment policy, it does not matter at all how many people are actually employed in our competitive manufacturing and other industries. All that matters is that they should be competitive. For example, let us suppose

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that only one person were employed in all manufacturing industry perhaps to switch on in the morning and switch off in the evening. That would not matter so long as that one person were backed by sufficient capital to ensure that he or she produced the requisite exports to pay for the goods and services that we import at full employment levels of demand. Only one person would be employed in manufacturing, but the competitiveness of that individual would be the key factor that permitted the full employment of the labour force in other sectors of the economy, including the public sector with perhaps more nurses and policemen or perhaps more university teachers.

So the fundamental issue in the modern highly competitive world in which we live today is whether our economy is competitive. If it is not, then it will be increasingly difficult to sustain full employment and such employment as can be sustained will tend to be increasingly low skilled and low paid. If the economy is competitive, then not only will it be possible to sustain full employment but also the pattern of employment will tend to consist of more highly skilled, more fulfilling and more varied jobs.

It is important to notice that attaining competitiveness is not just about ensuring that existing industries invest in the people the capacity and the innovation that will place them at the forefront of international markets. It also demands that there is a framework of ownership, of corporate government and, where appropriate, of regulation within which the industries of the future can flourish. That is why our approach to the development of the electronic media is so important today. That is why the speech of my noble friend Lord Puttnam was so important.

The growth of information systems, of electronic commerce and telephony and the link between all these and the traditional media of radio, television and film, is transforming today's economy as radically as the introduction of the steam engine did in the 19th century or indeed widespread electrification in the 20th century. Those great technological innovations created entirely new industries and revolutionised the old ones.

That is what is happening again today--with one added ingredient. Today, innovation in information technology, in telephony and in broadcasting is happening in the context of a highly competitive international economy. In that international economy, location--where you physically happen to be--is becoming far less important than it has ever been in the past. If we here in Britain are to compete in the future--if, that is, we are to maintain full employment and generate a fulfilling pattern of employment opportunities for the British people--we must ensure that there is a framework of industrial policy in place that will secure for Britain a position at the forefront of innovation in industries, new and old, fashionable and unfashionable, on an international scale.

That leads me on to the issue of policy. The rapid changes to which noble Lords have referred create major difficulties for policy makers. To illustrate those

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difficulties, I shall concentrate my remarks on a distinctly unfashionable--indeed, old-fashioned--industry: radio. In doing so, I declare an interest as chairman of the Commercial Radio Companies' Association, but what I have to say will apply as much to commercial radio as to the BBC. I also declare an interest as a director of Anglia Television, a component of the United News and Media group, because I shall have something to say about television later.

Radio plays a large role in the lives of the people of this country. Nine in every 10 people listen to radio for an average of 24 hours a week. Compare that with the average television viewership of 27 hours a week. So, in terms of consumption, radio is roughly as important as television. Yet radio is neglected in government and by the upper echelons of broadcasting policy makers. For example, last year there was a DCMS survey of household attitudes to BBC services. There was no question at all on radio. Why not? Perhaps the Minister will explain when he sums up. In the Davis Report on the future of digital broadcasting, there was again no mention of radio. Finally, last year at the Prix Italia broadcasting awards, a world showcase for all that is best in broadcasting, the Chairman of the BBC devoted all his remarks to television at what was supposed to be a television and radio event.

Those examples are rather limited and represent a regrettable neglect. But they also represent a folly. Radio is part of the electronics revolution. Indeed, as noble Lords are probably aware, mobile telephony is referred to in the United States as "wireless".

Perhaps most important of all, like all electronic media, radio is facing the digital revolution; a revolution which embodies the potential not only of very high quality sound, transmission and reception, but also could, if there were a total switch to digital broadcasting, permit a far more intensive use of that most scarce of all commodities in both broadcasting and telephony: the radio spectrum.

Digital radio will also produce a huge increase in choice for listeners and, by making more effective use of the spectrum, a huge increase in access for broadcasters of all kinds; that is national broadcasters, community and ethnic groups and all kinds of social interests.

Digital radio will also simplify broadcasting by Internet. In a few years' time, as many people will receive their radio programmes via the Internet as via a conventional radio set. The origins of those radio broadcasts could be anywhere in the world. In just a few years, competition between British commercial radio and the BBC will be a minor side show in a world-wide competition for audiences.

In this country, we have the opportunity to succeed in that global competition. Crucially, we have the product in quality radio broadcasts across the range of music and speech produced by the BBC and by our commercial broadcasters. We have the industry skills to make this a very British success story. Only outdated legislation stands in the way.

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First, successive Secretaries of State, acting under the Broadcasting Act 1990, have allocated only sufficient spectrum to digital radio for it to reach 75 per cent of the population. Do the Government simply not care about the other 25 per cent of listeners? Perhaps the Minister will tell us. Is it not clear that lack of access to digital radio will stifle investment in the industry?

Let us take another example. In order to encourage investment in digital radio, the 1996 amendments to the Broadcasting Act permits foreign--that is, non-EU--investment in the digital sector. But at the same time, highly restrictive ownership rules severely handicap domestic commercial companies from achieving the size which would generate the revenues to fund the investment that is necessary. While welcoming foreign investors with open arms, current legislation leaves the British radio industry fighting competitive battles with its hands firmly tied behind its back.

Thirdly, the sensitive and complex issue of a switch-over date from analogue to digital services is being neglected by the Government. Without consideration of a switch-over date, there is little incentive to invest, particularly in the production of reasonably priced receivers.

The radio industry is working hard to achieve digitisation. The BBC and commercial radio are working together in a public-private partnership to persuade the equipment manufacturers to commit to the scale of receiver production that will bring prices down. We are all grateful that the Secretary of State for Culture, Media and Sport has agreed to support this campaign at an event in May. But it is not just support that is needed.

The dilemmas facing the industry and the straitjacket of outdated legislation that is inhibiting its growth demand that government policy be modernised now. Throughout broadcasting, radio and television, many of today's regulatory structures have been rendered irrelevant by the new information age. We must modernise. An example of the urgency of the situation we face may be found in yesterday's referral of the planned television merger of United and Carlton to the Competition Commission. The Competition Commission will inevitably assess the merger through the lens of competition alone without referring to wider broadcasting issues. Its conclusions, however wise, can be only a partial solution.

Before the election, the Government promised a new regulatory structure to envelope all the electronic media--radio, television and telephony. That new, modern structure of regulation is required to support investment. It is needed to secure competitive success for all our media industries in the new international media environment. And it is needed now. The year 2002 will be too late: too late for industry; too late for jobs; and too late for the future of employment in the industries of the future.

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7.37 p.m.

Lord Brooke of Alverthorpe: My Lords, I am grateful to the noble Lord, Lord Lea of Crondall, for introducing the debate and I extend my congratulations to the noble Baroness, Lady Blood, on a marvellous maiden speech.

I make my contribution as a simple general secretary of a couple of Civil Service trade unions. My contribution comes from great experience of dealing with the many changes which came at us from many different angles. I also speak as someone with an interest in the future of work. I was involved in the review of the future of work, sponsored by the Churches in 1997. It was chaired by our colleague, the noble Lord, Lord Sheppard, who was then Bishop of Liverpool. I refer to that this week when we in this Chamber have heard a great deal about morality, principles and religion. I regret that more noble Lords are not expressing an interest in today's topic because I believe that work, or service, is at the heart of things, leading to the physical and spiritual well-being of individuals, families and the nation as a whole. It is that which motivated the Church review when it was set up in 1996-97. It took place against a background of a good deal of trouble within the labour market. People were experiencing difficulties which had arisen as a result of following, over the preceding 15 years, the policies of our colleagues on the opposite side of the Chamber.

I shall take a political stance for a short period. It is worth remembering, when considering major changes in the pattern of employment, that the major change we are now experiencing is a shift from having great numbers of people unemployed to having much higher levels of employment. During the period of the previous government, the number of full-time jobs fell by over 1.18 million. When they left office, unemployment still stood at over 2 million. For the first time in decades, we saw over 3.25 million people living in households where no one had any employment whatever. In terms of remuneration, 50 per cent of the vacancies advertised in job centres throughout the United Kingdom were offering hourly rates of £3.50 or less. Indeed, in many cases people working from home were being offered as little as £1 an hour, in particular women employed in piecework.

In the period from 1979 when the Conservatives came to power, incomes of the bottom 10 per cent fell by 30 per cent in real terms. Against that, at the other end of the scale, we saw a phenomenal growth in the salaries, incomes, dividends, share options and so forth of people who were able to progress using the freedoms given to them under that administration. We watched that big divide develop and we are now tackling it. It is now a fact of life: people in the bottom 10 per cent of income levels are worse off in relative terms. Perhaps I may remind my colleague, the noble Lord, Lord Howell of Guildford, that during the 1980s a line was taken that stated that nothing could be done about the growth of unemployment. A phrase parroted by everyone stated that high unemployment was inevitable and that we should adjust to it accordingly. However, I am glad to say that right

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around the Chamber, that fatalism has been rejected. Now a good deal more optimism about what the future holds for us is evident.

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