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Prosperity and Work
Prosperity and Work
Policy Commission work programme 2006
Draft - this document does not represent Labour Party or government policy.
1. Introduction
The Prosperity and Work Policy Commission covers a number of key Issues for Labour In government economic affairs, employment rights, welfare reform, manufacturing and pensions to name but a few.
With senior stakeholders sitting alongside Government ministers and CLP activists from the National Policy Forum, the commission will offer a forum for the party to speak frankly on some of the biggest issues facing Labour in a third term.
The new, larger commission represents a merger between two commissions from the second round of Partnership in Power Economy & Welfare and Trade & Industry. In the last round of Partnership in Power each commission took part in a number of engaging events including:
- a Big Conversation on skills that brought together all the key players interested in the adult skills agenda as well as ministers, MPs and peers
- a visit to Rolls Royce in Derby where the commission heard from managers and trade union reps on how they were encouraging workers to re-skill
- taking evidence from external stakeholders, including: the Maternity Alliance and Fathers Direct on parental leave; and the Trade Union Committee & Engineering Employers Federation on manufacturing.
2. Work programme
Competing in the global economy
The economy of the future will be based on knowledge, innovation and creativity. In today's global economy the countries that succeed will be those who invest in education and skills and who compete on the basis of high value, high quality products. Labour's goal is to boost productivity through investment in science, skills and infrastructure, fostering enterprise and encouraging positive attitudes towards entrepreneurship and innovation, ensuring an effective competition framework, fair trade, and building modern manufacturing strength.
Gordon Brown made clear in the Pre-Budget Report that neglect of investment in science holds our economy back, and as we agreed at Warwick, the alliance of scientific research and business creativity is key to our continued prosperity. The Pre-Budget Report contained measures to take forward Labour's ten-year strategy on science and innovation. This includes measures to create a world class environment for health research, to enable the UK to maintain a leading role in stem cell research, and a strengthened partnership with the biomedical industry to increase private investment in medical research and development by up to £500 million in the short to medium term, rising to £1 billion per year in the medium to long term.
At a time when China and India are not only producing an ever higher share of the world's manufactured goods, from electronic goods to clothes, but are producing between them four million trained graduates every year, we in Britain simply cannot afford to waste the potential of any young person or discard the talents of any adult. We must match the best in the world for standards in our schools, leading in science and excelling for the creativity and inventiveness of all our people.
Improving skills in the workplace is a key part of equipping Britain's workforce to meet the global economic challenges of the future. As promised we have recently announced skills academies in four major industries manufacturing, construction, food and drink, and financial services. The academies could train tens of thousands of young people and adults each year and will play a key part in creating jobs, tackling skills shortages and driving up productivity. Industry needs people with the right skills to compete in the global market, including world-class management skills. We know from business leaders that manufacturing and construction are key areas where we need to work with business to help more. National Skills Academies are an opportunity for government and employers to achieve common goals and build a Britain of enterprise and opportunity. The National Employer Training Programme - which offers free training for employees, help for all small firms with their costs - will, from next summer, be expanded nationwide to provide training in 50,000 companies for 300,000 employees a year as we agreed at Warwick. Modern communications and transport infrastructure are also essential for all sectors.
The Education and Skills Commission will look at skills in more detail.
Manufacturing not only has been, but remains and always will be, critical to the success of the British economy. Successful manufacturing industries are vital to our future prosperity and Labour's priority is to build modern manufacturing strength in the UK. Our ten-year strategy on science and innovation will continue to invest in Britain's science and industrial base. High skilled, high-tech modern manufacturing is what Britain does best. Our ambition is to raise the UK's total private and public sector investment in research and development, as a proportion of national income, from its current 1.9 per cent to 2.5 per cent by 2014, to remain a world leader in science and high skill, high value manufacturing. The PreBudget Report also announced, as we agreed at Warwick, that from April 2006, first-year capital allowances will be increased to 50 per cent for small businesses investing in plant and machinery.
Labour is committed to making sustainable improvements in the economic performance of all English regions and reducing the persistent gap in growth rates between the regions. Policy commission discussions will be able to focus upon regional economic development, including links between national and regional policy frameworks.
We are taking forward our agreements on procurement. The implementation into UK law in 2006 of two revised EU procurement directives, covering public sector and utilities purchasing, will make the procurement rules more helpful to today's purchasers and suppliers. We are also making progress on all of the 15 recommendations from the Wood Review published in November 2004. The UK has been working with the European Commission and EU member States to promote best procurement practice across the EU.
Labour backs manufacturing: from launch investment for Airbus A380 Super Jumbo to the successful Manufacturing Advisory Service which has generated £155 million of added value for UK manufacturing in its first three years. We made clear in our manifesto that in a third term we will continue to back manufacturing, including expanding the Manufacturing Advisory Service.
The commission has an important role to play in considering these issues, in particular receiving submissions reflecting local views on how to respond to the challenges of globalisation.
Achieving full employment
Our goal is employment opportunity for all the modern definition of full employment. With Labour, Britain now has more people in work than ever before and our long-term aim is to raise the employment rate to 80 per cent.
The New Deal is key to our strategy of helping people to move off welfare and into work. It is crucial that we build on the success of the New Deal and extend it so we can help even more people off welfare and into work. As we extend the New Deal, we should make the best use of the skills in the voluntary and private sectors to make further progress in helping specific groups who may need specialist provision.
But we must make more progress towards reaching an 80 per cent employment rate by helping everyone overcome barriers to work including those who face some of the biggest difficulties, such as people with mental health problems and learning disabilities.
Increasing our employment rate will equip Britain to remain competitive with emerging nations in the fast-changing global economy. And it will enable us to continue supporting an aging population, where there will soon be more people over the age of 80 than under the age of five.
Our 2005 election manifesto committed to help the many people with a health condition or disability who get trapped in the incapacity benefit system that the Tories created to hide the true unemployment figures during their years in power.
There are of course many who genuinely cannot work, and these people should feel secure that the state will support them. But 80 to 90 per cent of people in the early part of a claim for incapacity benefits expect to get back to work, so we cannot accept a system that can effectively write people off, diminishing their abilities and lessening their life chances.
In line with our commitment to match rights with responsibilities, the principle will be something for something - increased support for people's right to work in return for an obligation for people to do what they can to return to the workplace. We will also build on the New Deal for Lone Parents by doing more to help lone parents move into work when they are ready to do so, and continue to take measures to ensure that older people who wish to work are able to continue doing so. And we will continue to promote access to work for older people and work to combat age discrimination in the work place.
The welfare reform Green Paper will be published in January 2006, taking forward our agenda to build an enabling, active welfare state, built on the principle of rights matching responsibilities. Following this, there will be a period of consultation and debate before the Government comes forward with legislative proposals, and this will provide an excellent opportunity to examine the relevant issues, both within the party and with external stakeholders, and the policy commission can play an important role in this.
Modern workplaces
A strong economy draws on the talents of all. Labour has extended legislation to protect people from discrimination at work and has transformed legal rights for disabled people. Since 1997, Labour has introduced new rights for people at work and new opportunities for trade unions to represent their members.
The National Policy Forums in Warwick last year represented the culmination of years of policy development and discussion across the party during Partnership in Power 2. A major plank of what has become known as the 'Warwick agreement' is the set of policies for the workplace which were agreed through Partnership in Power. In our manifesto we committed to delivering these policies in full.
Early in 2006 the Labour Government will set out the next steps in helping people in work through a strategy document. This document will reflect the work already underway and future action to ensure Labour continues to promote full and fulfilling employment. The commission will give government ministers the opportunity to report back to the party on the progress being made to deliver on the workplace priorities set out in the Warwick agreement.
Already we have extended from eight weeks to twelve weeks the protection for strikers from dismissal and a Corporate Manslaughter Bill was included in the Queen's Speech. Last April we implemented the information and consultation requirements on companies with more than 150 employees following the groundbreaking agreement between our social partners. Labour introduced, for the first time, an entitlement for every employee to four weeks' paid holiday, and we will extend this by making it additional to the equivalent of Bank Holidays. The Work and Families Bill, currently progressing through Parliament, will significantly increase maternity and paternity leave and will extend to carers the right to request flexible working.
The commission will discuss workplace issues, including action to help our most vulnerable workers, so that we continue to deliver a modern employment rights framework that ensures ongoing prosperity and growth.
Tackling child poverty
Labour's commitment to tackling child poverty formed a key plank of our 2005 election campaign, and our manifesto reaffirmed our historic pledge to end child poverty in a generation, starting by halving it - both in terms of relative low-income and in terms of material deprivation - by 2010-11. Since 1997 we have ensured there are a million fewer children in poverty, and we are broadly on track to have reached our target to reduce by a quarter the number of children in relative poverty by 2005.
Work is the best anti-poverty strategy so extending employment opportunity to all has been and will continue to be a crucial part of our strategy to tackle poverty. Tailored help, especially for lone parents, is key but we are also committed to making work pay - with a guaranteed income of at least £258 per week for those with children and in full-time work.
The benefits system needs to support all children, and those in greatest need the most. That is the rationale for universal child benefit and targeted tax credits, and why we have committed to increasing the Child Tax Credit at least in line with earnings up to and including 2007-08. The Pre-Budget Report announced a series of steps to ensure that the system strikes the right balance between providing a stable award and maintaining the ability to respond to changes. As a result of Labour's measures, families with children are on average £1,400 per year better off, and those in the poorest fifth of the population are on average £3,200 a year better off compared to 1997.
In considering the next steps we must take in tackling child poverty, we have stepped up our ambition by incorporating a new measure of material deprivation - which looks directly at what poorer families are missing out on. In particular, this will mean increasing the availability of decent housing and tackling financial exclusion. And, as the 2004 Child Poverty Review highlighted, we are also focussed on the critical importance of public services - such as childcare, education and parenting support - in improving poor children's life chances and breaking cycles of deprivation. In this way we can ensure that we tackle child poverty in the round.
Finally, an important aspect of this workstream should be to examine how we can campaign more effectively on this issue, to help win popular support for our mission to abolish child poverty and for future measures to tackle child poverty.
Pensions
Labour's first priority on coming into office in 1997 was to tackle the legacy of pensioner poverty we inherited from the Tories.
We have succeeded in lifting nearly two million pensioners out of absolute poverty. The average pensioner household will be £1,400 per year better off as a result of measures this Government has introduced than they would have been under the 1997 system. The poorest pensioners are £1,900 a year better off. As a result of measures this Government has introduced since 1997, there will be nearly £11 billion extra spent on pensioners in 2005-06. The Minimum Income Guarantee, Pension Credit, Winter Fuel Payments and a seven per cent real terms increase in the Basic State Pension are just a few of the measures that have made a real difference to the quality of life of millions of people.
We have also taken action in the Pensions Act 2004 to tackle the loss of confidence in the private pensions market - through the Pension Protection Fund, the Pensions Regulator and the Financial Assistance Scheme. Ministers have indicated that Financial Assistance Scheme funding will be reviewed as part of the Spending Review process.
The Pre-Budget Report announced an additional £300 million over three years to enable pensioners on Pension Credit who do not have central heating to have it installed free of charge and to provide a £300 discount on central heating for all other pensioners. It also announced a continuation of the £200 Winter Fuel Payment (and £300 for over-BO households) for the rest of this Parliament. Our goal is to eliminate fuel poverty for vulnerable groups by 2010, and for all by 2016.
Following the publication of the Pension Commission's second report in November 2005, we need to forge a national consensus about how we move from a pension system designed for today's pension problems to one that will secure dignity in retirement for future generations.
The case for action is clear:
- By 2050 there will be 50 per cent more pensioners than today.
- When the system was introduced there were ten workers for everyone pensioner. Now there are four workers for everyone pensioner and by 2050 there will be two people in work for everyone in retirement.
- Over the last 25 years, official estimates of life expectancy for a 65-year-old woman in 2050 have increased from 19 to 26 years - an increase of around 40 per cent.
- The Pensions Commission have made clear that nearly ten million people are not saving enough for their retirement.
- If we do nothing, relative to workers, future pensioners will be 30 per cent worse off than they are today.
We have said that pensions reform must meet five key tests:
Does it promote personal responsibility?
Is it fair?
Is it affordable?
Is it simple?
Is it sustainable?
As we made clear in our 2005 election manifesto, a reformed system must, in particular, address the disadvantages faced by women. Policy commission discussions will be able to focus on issues such as women's pensions, and also educating young people about the importance of taking on a pension.
Following the package of reforms to our pension system proposed by the Pensions Commission, we are undertaking a major consultation exercise. We will talk to people of all ages, in all parts of the country, as we work towards the publication of a White Paper in the spring. Over the next few months, the Prosperity and Work Commission will have an ideal opportunity to help take forward this consultation both within the Labour movement and beyond.
World-class public services
Labour's goal is to deliver world class public services through sustained investment and reform. World class public services are crucial in the modern world for promoting opportunity and security for all. A dynamic economy depends on dynamic and efficient public services. Our modernisation of public services must deliver efficient, responsive public services with high standards fit for the 21st century.
Our first Spending Review had to put right decades of Tory underinvestment and ensure that capacity was increased to tackle long term under-provision in hospitals, schools and other facilities. There are now over 28,000 more teachers and 105,000 extra teaching assistants and support staff. The National Health Service has now over 79,000 more nurses and over 27,000 more doctors since 1997.
It is important that reform is not at the expense of the workforce. Staff are key to public service improvement. Delivering high quality public services, modernised for the 21st century, demands that the best use is made of the dedication, service and professionalism of all those who work within the public sector.
The National Policy Forum has previously played an important role in addressing these policy issues. In the final policy documents discussed at Warwick in July 2004 we agreed to build on the lesson learned in local government and address the "two tier" issue more widely in the public sector. In March 2005, the Government announced the extension of the 'Code of Practice on Workforce Matters' to the wider public sector.
The Commission will continue to monitor issues of public service delivery and performance as they arise, in particular noting ongoing studies related to the forthcoming Comprehensive Spending Review.
Helping women in work and family friendly working
The Women and Work Commission was announced by the Prime Minister at the NPF in July 2004 and was charged with examining the problem of the gender pay gap and other issues affecting women's employment. The Commission is chaired by Baroness Prosser and will report to the Prime Minister in January 2006.
The remit of the Commission is to look at:
- how men's and women's education and skills affect which jobs they can get
- promotion and career progression - both the 'glass ceiling' and the 'sticky floor'
- women's experiences in the job market before and after having children;
- the different experiences of women working full-time and part-time;
- reviewing the experience of equal pay reviews in both public and private sectors and considering the case for mandatory pay reviews.
Labour is committed to tackling the pay gap, which currently sits at 13 per cent for full time workers and 41 per cent for part time workers. Such discrimination no longer has a place in our modern workforce. Not only are we commited to gender equality, but it is also important that women's abilities and skills are being fully utilised in businesses and in the economy.
The Prosperity and Work Policy Commission will have a keen interest in what comes out of this report and will hear from ministers on how they intend to take forward the recommendations of the commission.
Addressing the gender pay gap forms just part of the commitment Labour made at the last general election. We pledged an increase in maternity and paternity leave and a commitment to extend flexible working. The Work and Families Bill is making good progress through Parliament and forms an important part of delivering on the commitments made at Warwick and in our manifesto.
We have come along way since introducing the Sex Discrimination Act 30 years ago. With the support of Labour in government women are getting at fairer deal in work. There are more women in work today than ever before. Over one million women have found work since 1997 and Britain has one of the highest female employment rates in the world.
Above all we want to ensure that women have a choice, with options open to them. We have already helped millions of parents find a better balance between work and family life with more maternity and paternity care and improved access to good quality childcare and early years education. The findings of the Women and Work Commission will allow us to make further progress in helping women in work.
Energy and the environment
Energy policy is back in the spotlight as the Prime Minister recently announced an Energy Review, following on from his commitment made at Labour Party Annual Conference in September 2005 to ensure we meet our goals on carbon emissions while ensuring a secure and affordable supply of energy for all households.
Labour's Energy White Paper in 2003 urged that we continue to keep energy under review. It is clear that nothing remains constant when formulating energy policy and it is right that we continue to monitor our policies, especially as climate change becomes an ever-pressing issue and our targets appear even more challenging. North Sea gas production is in decline and Britain is now a net importer of gas, the decommissioning of coal and nuclear plants in 2020 is drawing closer, and global fossil fuel prices are affecting costs for domestic and business users.
So, the time is right for a review to ensure we can meet the targets and priorities set out in the 2003 Energy White Paper, namely:
- cutting carbon dioxide emissions
- maintaining reliable energy supplies
- promoting competitive energy markets at home and abroad
- ensuring every home is adequately and affordably heated.
All energy options are up for consideration, including the role of current generating technologies, such as renewables, coal, gas and nuclear power, and new and emerging technologies, for example carbon capture and storage. The review will also look at the role of transport, energy efficiency and the energy market in supporting the White Paper goals.
There will inevitably be some difficult decisions and trade offs to be made in arriving at the right package of policy proposals. It is crucial that we stimulate a wide-ranging and informed debate and engage the public, business and industry throughout the process as well as academic, private sector, scientific, Non Governmental Organisations (NGO) and other experts. Labour Party members will be encouraged to have their say and the Commission will play an important role in stimulating debate across the party, including in areas such as security of supply, long-term safety issues, the operation of the Interconnector, and the potential of emerging and future technologies such as renewables, clean coal, carbon capture and storage and nuclear fusion.
International development
Labour's record on international development is a source of great pride for our members. It shows the real difference that politics can make to peoples lives. 2005 has been a critical year for development. Under our Presidencies of the GB and the EU, we are delivering on our promise to use our leadership role to help secure international action focusing on Africa and climate change.
With Labour's leadership much has already been achieved. At the Gleneagles summit in July a comprehensive package and plan of action for Africa was agreed, meeting many of our manifesto commitments. Significant achievements include: an extra $50 billion of aid for all developing countries by 2010 and a doubling of aid to Africa by $25 billion per year; cancellation of 100 per cent of multilateral debts of the Heavily Indebted Poor Countries which could amount to a total of $55 billion of relief; by 2015 all children will have access to good quality, free and compulsory education and to basic health care, free where a country chooses to provide it; as close as possible to universal access to treatment by 2010 for HIV/AIDS; funding for treatment and bed nets to fight malaria, saving the lives of over 600,000 children every year by 2015; and full funding to totally eradicate Polio from the world.
Gleneagles made significant progress on debt relief and aid but the challenge of reforming the trade rules to help developing countries remains. The World Trade Organisation (WTO) ministerial meeting in Hong Kong on 15 December gave a real opportunity to build on the agreements on trade, domestic subsidies and agricultural export subsidies and make trade freer and fairer.
The Prime Minister announced that the UK is to treble its support to help poor countries trade their way out of poverty to £100 million per year by 2010. But this is just part of the ambitious and comprehensive package of measures that Labour in government pursued in Hong Kong. At the talks, the Government pushed for a cut in barriers to trade in the three key areas - agriculture, non-agricultural market access, and services. It also pushed for poor countries to be allowed the flexibility to decide, plan and sequence trade reforms with no forced liberalisation - all supported by the aid for trade package which will assist poorer countries developing their capacity to trade.
The commission will have the opportunity in the New Year to reflect on the progress made in 2005 and how we can maintain the momentum behind the debate on international development, and continue to engage with our members, the public, NGOs and other organisations to translate the agreements made this year into action. As the Britain in the World Commission is also considering these issues, opportunities clearly exist for joined-up working, with the Prosperity and Work Commission taking a lead on issues around trade.
3. Next steps
Annual Conference 2005 agreed new proposals Improving Partnership in Power. The Improvements give policy commissions a crucial leadership role in ensuring the success of the next PiP cycle by, for example, providing better engagement on topical issues, building an ongoing relationship with party stakeholders who have made policy submissions, as well as looking at innovative ways policy commissions can work to help with their thinking on future policy development.
This work plan outlines the policy challenges and the topical issues facing the Prosperity and Work Policy Commission in the year ahead. They provide a focus for the commission's work and help party members understand the current work of the National Policy Forum.
The policy commission will consider how to manage the engagement on these issues with party stakeholders, which will include prioritising the policy areas, putting forward a timeframe and proposing the best method of engagement depending on the policy issue under consideration.