What does ‘The Fixer’ tell us about Labour’s approach to the economy?


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Tess Lanning is a research fellow at the Institute for Public Policy Research (IPPR) and co-author of the report ‘No Train No Gain: Beyond free market and state-led skills policy’, published today at www.ippr.org

Once a week you can watch Alex Polizzi, in her series ‘The Fixer’, help failing family firms specialising in anything from bread to bridal wear, and furniture to car repair services, learn how to innovate.

Alex-PolizziThe British hotelier mentors the family members to develop their products, identify and compete in more diverse and higher value markets, and to develop and use the skills of their staff in ways that improve the quality of their goods and services.

What’s notable about this compelling BBC series, tucked away on Tuesday nights on BBC 2, is that Polizzi offers the sort of business support that is almost non-existent in England.

Labour set up the business support service Business Link, which was much criticised for being too generic, with little or no operational knowledge of different sectors or markets. The coalition is hoping to deregulate its way to growth and even Business Link has been reduced to a website and a phone line.

With little desire to intervene at the firm or sector levels, improving individuals’ skills became the principal form of intervention in the economy.

Labour put adult skills centre-stage in its strategy for social inclusion, and also argued that a more highly qualified workforce would help to drive innovation, competitiveness and the resilience of British firms. Targets followed to increase qualification rates at school, university and in the workplace and rhetoric about the promised ‘knowledge’ economy abounded.

 


See also:

Budget 2012: Some welcome news for cities, but questions remain about jobs and growth 23 Mar 2012

Cameron still doesn’t get the need for an interventionist manufacturing strategy 12 Mar 2012

German lessons for the British economy 18 Jan 2012

How can we have fairer capitalism? 13 Jan 2012

A new strategy to help save UK manufacturing 5 Dec 2011


 

Yet despite impressive investment in the skills of the workforce under Labour, the development of a knowledge economy has been slower than hoped. Demand for higher level skills has been increasing since the 1980s, but nearly half of jobs in the UK do not require post-secondary education and a third of firms offer no training to staff.

Levels of training, one proxy for more innovative, skills-led business models, actually fell over the period Labour was in government.

Data from the Labour Force Survey shows that in 2001, as Graph 1 shows, around 30 per cent of the workforce had received job related training in the previous 13 weeks.

Graph 1:

Received-job-related-training-in-past-13-weeks-2001-2011
In 2011 this had fallen to 27 per cent, with the sharpest decreases, as Graph 2 shows, for young people.

Graph 2:

Received-job-related-training-in-past-13-weeks-by-age-2001-2011
A new report by IPPR, published today, shows British firms also perform poorly when compared to their counterparts in other northern European countries. At 31 per cent, the average participation rate of training among adults is similar to the OECD average.

But this is below that of our main competitors in northern Europe, and when it comes to the average hours of training in a year – one proxy for quality – the UK, at 39 hours, is substantially lower than the OECD average, at 58 hours. On this measure, just three countries perform worse than the UK out of the 27 OECD countries for which comparable data is available.

Levels of innovation and productivity are consistently higher in the German-speaking and Scandinavian countries, where firms and sectors train more, and to a higher standard, than their British counterparts. Many jobs that in England are viewed as low skilled, require a deeper level of skill and so offer more opportunities for employees to use and develop their skills.

A bricklaying apprenticeship in Germany, for example, offers the opportunity to become something closer to a civil engineer, while lorry drivers are trained in logistics and foreign languages.

In these countries, firms benefit from powerful unions and employer associations, which drive improvements in their sectors and supply chains by regulating training and offering tailored business support. Supported by state-backed finance, the social partners help disseminate information and support businesses to innovate and grow.

This not only explains why the German and Nordic firms are better at competing global markets in higher value sectors such as manufacturing, greater employer commitment to training and workforce development also means citizens in these countries receive a better service in domestic markets such as social care, construction and the fitness industry, while workers in those sectors also have more opportunities to use and develop their skills.

The weak tradition of business support in the UK makes this a difficult agenda to pursue. Evolutionary reforms to the institutional landscape are needed. Reforms to build the strength and capacity of sector bodies and existing employer associations should aim, over time, to develop local and sectoral networks of business support comparable to those in other northern European countries.

The UK needs a radical new approach to social mobility and economic competitiveness, one that moves away from state-led interventions focused on individuals and towards collaborative approaches targeted at improving business performance and job quality in firms.

In short, many more firms should have access to the sort of active or tailored business advice that the Chough Bakery in Cornwall received last year, courtesy of Polizzi and the BBC.

 


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  • Anonymous

    Lets see what you approach to the economy was.

    1. Investment.

    Now for an investment to make sense, to meet economic tests, that investment has to do the following. Produce a saving in expenditure, greater than the cost of the money borrowed, with interest, or produce extra profits, in excess of the money borrowed. Note that raising tax rates isn’t making a profit. Getting more people paying tax is.

    However, you didn’t do this. You increased the amount of borrowing because you spent money on things that didn’t produce savings or new people paying tax. You wasted it.

    So why should you be lecturing on how to run businesses when you have caused so much damage by crap investments?

    It’s not as if the Tories are any better. Look at Boris (interesting instead of tax evading Ken)

    140 million on 5,000 Boris bikes. Cost per bike, on the road, 28,000 pounds.

    Doesn’t take a genius to work out it will never make money.

    So where was Labour when Boris was on his mad cap scheme? Agreeing with it.

    Government is the problem, not the solution.

  • Anonymous

    Oh right, the 99% are getting SOME training. Unacceptable!

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  • Selohesra

    Quiet here today – was hoping for some reasoned discussion on Ken’s tax affairs

  • Anonymous

    I’m sure you would. Let’s discuss YOUR tax affairs.

  • Selohesra

    All income declared on tax return to HMRC – no dodgy companies – next

  • Timbo

    At least with boris bikes you are also making saving on the environment, from reduced wear and tear on highway infrastructure, and from reduced congestion (which of course is better for productivity).

    A motorist pays about £650 a year in petrol taxes if they have annual mileage of about 10,000. Road tax varies between zero and about £400 and is typically somewhere in the middle. So the government is only getting around £1k from each motorist, which is pretty cheap given that people’s cars clog up public space on streets (mostly for free – bunch of freeloading scroungers!), add particulates to the air which are a major contributor to asthma and other bronchial diseases that cost the NHS, add to climate change and require the government to spend massive amounts retaining an infratrucutre for a mode of transport that is not really fit for the 21st century. That’s what I call a bad deal.

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  • Ed’s Talking Balls

    I’d rather have the full truth about Ken’s.

  • Anonymous

    …He’s not doing anything wrong.

    http://www.cityam.com/forum/ken-livingstone-blameless-his-tax-planning

    CityAM are not exactly a left-wing propagit paper.

  • Ed’s Talking Balls

    Tricky ground here.

    Legally, of course he’s doing nothing wrong. But he’s still structuring his arrangements in such as way as to avoid paying some tax he would otherwise be liable to pay.

    I don’t blame him for that. What I do blame him for, however, is the sheer breathtaking hypocrisy, then the subsequent attempts to smear a fellow candidate.

    This is one of several reasons I personally don’t believe he’s fit for office. By a long shot, it’s not the biggest reason, however. You can tell a lot about a man by the company he keeps (so the saying goes….)

    P.S. Of course you’re right about City AM’s views. But then again, City AM would praise anyone engaging in tax mitigation.

  • Anonymous

    What? He’s doing what HMRC *recommend* in his situation.

    The problem is the law itself, which needs changing to harmonise the tax you pay regardless of the way your income reaches you, rather than ANYTHING he’s done.

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