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Lord Haskel: My Lords, I thank the noble Lord for giving way. Perhaps I may comment in view of the noble Lord, Lord Eatwell, saying that most people logged on to the University of California at Berkeley on that system because they heard about it on the "Today" programme.
I conclude by making this serious point. In Britain we have a great interest in this changing structure of employment, which has been one of the themes of today's debate, because of the shifting patterns of employment. From the jobs-for-life of the past, which have been spoken of by several of your Lordships, to the routine job changes and rise of short-term contract work, it is something which I think we have experienced more drastically than most other European countries. Many industries are shifting towards lean employment structures in which they rely on others for everything but their core operations.
One businessman to whom I was talking the other day had gone the whole way. He was engaged in providing airline catering. Initially, he brought in the food, cooked the meals, put them into the plastic packs and sent them off himself to the airlines who were his customers. Gradually, he contracted out all those operations until the only thing he had at the middle was a computer. He was writing out schedules which said that X meals had to be delivered to airline Y at such and such a time on Monday morning and other people were doing all the work. He has one individual sitting at the middle, masterminding the whole programme. We could reach a situation where we have a core of people who are very well educated and very well trained but, outside that, there will be a penumbra of people who are on short-term contracts, brought in from agencies on temporary hire, or are self-employed and contracting their services to the larger companies. That is Will Hutton's 30:30:40 world in which he says that 30 per cent of the population of working age will be in core jobs and will be highly skilled, highly trained; 30 per cent will be in contract jobs; and 40 per cent will not participate in the workforce at all for some reason, such as early retirement, motherhood or being a student.
It is the small and medium-sized firms that on the whole bear the brunt of the economic cycle, the ups and downs of the switchback. So it is going to be the 30 per cent of short-termers who bear the employment up and downs and what used to be referred to as "the lump" in the construction industry where self-employed workers have long been the norm. It is now common in the more starchy areas of banking and
I should like to make a plea to the Government not to boast too much about the flexibility we have achieved. There have been genuine gains in employment, and from these Benches we welcome and endorse the Government's emphasis on helping the long-term unemployed back into work, even if the New Deal has not been quite as successful as they have claimed (because of the strength of the pound and the endemic mismatch between the overheated south-east and other parts of the country, which are still relatively in the doldrums). That flexibility in the labour force has come largely from the shifting patterns of employment which I have described and the large numbers now working on short-term contracts. That has transferred the risk in the economy away from capital and on to the workers; indeed, often on to those workers least able to bear the effects of any downturn.
That carries potential long-term dangers. It is quite common in the UK to hear the Germans being criticised for their lack of flexibility and to point out their falling productivity. Those critics overlook two matters: first, that German productivity statistics since 1992 have incorporated the East German La nder whose productivity was always below western standards. Secondly, West German productivity in terms of added value per worker per hour has been, and remains, about 30 per cent higher than its British counterpart. One of the main reasons is that German workers are trained better and for longer than British workers. German employers invest in training because generally German workers stay longer in their jobs and, if not for life, at least long enough to pay back the cost of training.
I suggest that the changing structures of employment which we have witnessed over the past 25 years are part of a long-term and dynamic situation. We as a nation have very little control over it and we have chosen for one reason or another not to use the few controls that we have. Whether that is a wise decision, time will tell. It has resulted for the present in an imbalance in regional terms (which I have mentioned, but which has been dealt with at length by others) between the core and the periphery of the workforce--that core workforce and the penumbra of part-timers and contract workers. In both senses, flexibility has its upside and its downside. I urge the Government to recognise the downside and perhaps to be a little more humble when they preach the British solution to our partners in the rest of Europe.
Baroness Miller of Hendon: My Lords, this has been a most interesting, stimulating and informative debate. Perhaps I should apologise to noble Lords for my grating voice. It is certainly grating inside my head.
Changes in employment patterns have been taking place not just in the past couple of decades as many have said, but for thousands of years. Nine thousand years ago man stopped being a hunter nomad and became a farmer. Later he developed into an artisan, working in wood and metal, devising alphabets and discovering mathematics and all forms of science, so creating the world of ideas. Everything accelerated at the time of the Industrial Revolution, which changed the whole balance of employment from agriculture and small craft work into the gigantic industrial conglomerates and the major industries that existed around the world at the beginning of World War II.
In 1901, 12 per cent of the population of the United Kingdom lived in the countryside and were engaged in agriculture. By 1991 the number of agricultural workers had fallen to 2 per cent. In contrast, the number of people working in office jobs rose from 18 per cent to 40 per cent in the same period--more than double. Currently the number of couples with dependent children where both partners are in employment is three-fifths, compared with around half in 1979-80. A relevant fact is that between the spring of 1971 and the spring of 1999 the proportion of economically active women rose from 56 per cent to 72 per cent. One reason for that is that since 1901 there have been more office jobs than manufacturing jobs and the gap widened from 10 per cent to 20 per cent in the years between 1971 and 1991.
In other words, the nature of the work available has changed. More women are prepared or are physically capable of carrying out the jobs that are on offer, so more and more have paid employment. Their ambitions for themselves and their families, quite apart from their economic needs, are putting more women into the labour market. Several noble Lords, particularly the noble Lord, Lord Lea of Crondall, and the noble Baroness, Lady Turner, have mentioned that that is one of the greatest changes in employment patterns that we have seen over the past quarter of a century.
Without industries on the scale that existed in the first half of the 20th century, the unsurpassed savagery of the two global wars would simply not have been possible. After the Industrial Revolution the greatest accelerator to invention was the two world wars, which demanded new processes like mass production and incredible new inventions that today we take for granted, like radar, jet planes and Henry Kaiser's Liberty Ships, which transformed shipbuilding from rivets to welding. The list is almost endless and I shall not take up the time of the House by reciting a catalogue of them. After the war, the development of
What about telephones? The other day I was watching a not so old film when I was struck by the character laboriously turning the dial of the telephone and I compared that to the push button machines that we all use now. Those will soon be replaced by voice-operated telephones, which are already on the market. In 20 years' time--possibly less--I suppose the telephone kiosk will have disappeared completely in exactly the same way as the street gas lamp.
That leads to another example of changing employment patterns. When the gas lamps went, so did the jobs of the men who used to light them every night, along with the many jobs lost in the gas industry. Inventions have brought about changes in employment patterns, destroying old jobs, but at the same time creating new ones. One of my sons is a software engineer. When he was born there was no such thing as a software engineer.
Social considerations and international politics have also played a major part in the changing patterns of employment. The entire former British Empire has been decolonised and practically each new emerging country wanted to add industry to its predominantly agricultural economy. So we helped them to establish textile factories and in no time "King Cotton" was killed off by cheap imports from the developing world. In some cases, steelworks were developed and our steel industry suffered as a result.
Our steel industry was also decimated as a result of fierce competition in the developed world and changes in manufacturing techniques in other industries. Reduction in demand caused by changing car engines from steel to aluminium and introducing plastic into car bodies is one such example.
In economics there is a new buzzword, "globalisation". International trading companies have been with us for a long time. Those companies now have the opportunity to manufacture or to buy components in one country, assemble them in another and sell them in a third country.
Inability to compete with overseas industries working with cheap labour and less restrictive environmental regulations have all long played their part in virtually destroying old, traditional industries in which we were once the leaders. In four great centres we were the world leaders in shipbuilding. That industry has virtually disappeared. Overseas competition and domestic restrictive trade union practices played a major part in that. I am not being judgmental because I believe that under-investment and bad management were also to blame.
The fact is that the industry has gone and it has gone for ever, which brings me to geography. Why was it so hard to introduce new industries to the North East to replace shipbuilding, despite there being a ready-made skilled, versatile workforce on the spot? Another reason for this situation is the transport costs. A business that has to move its goods from Newcastle to Dover is inevitably at a disadvantage in relation to one that is based somewhere on the M2.
Even that factor is beginning to change. We have just entered a new world--indeed a new planet--"Planet.com". The other day I ordered something by mail order and found myself talking to a lady in Cornwall. I can buy books, compact discs and all sorts of things from America without speaking to anybody, and far more cheaply than I can buy them here. There is even a website operating out of Cyprus that sells cars at thousands of pounds less than in the United Kingdom.
What I call electronic work can be done anywhere. Call Directory Enquiries from London and you are likely to be answered by someone in Northern Ireland or Scotland. Data can be processed just as easily and speedily in some provincial town.
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