By Liam Byrne –
It was Ronald Reagan who said: ‘it’s true that hard work didn’t kill anyone but I figure why take the chance’.
The President was of course being charming. But the truth is that the lack of good jobs today, means that it is harder than ever to make a living simply by working hard. Working people in the UK are on average £1,600 worse off a year since the 2010 general election; a family today has to work an extra two hours a week, just to make what they did four years ago.
That’s why Labour has said we will put an end to low pay by looking at higher sector-specific minimum wages, and by encouraging businesses to offer the living wage. It’s why we’ve said we will freeze energy prices, and it’s why we’ll extend childcare provision.
But for the long term, there is only one real way out of this mess: and that is to grow our knowledge-intensive sectors; that part of the economy that accounts for one third of output, one third of business, but just 19% of jobs. If it was a third of jobs that would be an extra 2.4 million better paid jobs to go round. Right now, those jobs pay 40% over the national average; that’s a weekly pay-packet of £161 more.
But here’s the challenge: global science is now out-pacing UK skills. Our teaching is not keeping up with either the trade or the technology that is rapidly re-shaping the world around us. Competitors like Germany, Korea and Israel are all growing science spending faster than us. Our spending on science is falling in real terms by £100 million a year.
Meanwhile, new science powers like China are growing science spending at 36% a year as they shift from being an intellectual property (IP) copier to an IP creator. Chinese firms such as Xiaomi and BGI are showing that they can beat the world in the invention business.
And others are not simply inventing things, they are making things. At the Rolls Royce-Hindustan Air plant In Bangalore, I recently saw first-hand that production quality is simply world-class. Rolls Royce and its partners have 850,000 engineering graduates every year to choose from. But salaries for people of the quality that Rolls Royce needs in India are between just £3,000 and £5,000 a year.
In this world that is coming, if we’re to prosper, if we’re to build a bigger knowledge economy, it’s critical that we find ways to teach creative, practical intelligence, not just to some but to all.
The decline of routine jobs is accelerating as technology advances: indeed, economists at the Oxford Martin School now estimate that 47% of jobs in our economy may be automated over the next two decades. The world-class education system of tomorrow will therefore not just have one, but many ways to rise. Today, our universities draw on a talent pool that is simply too small. We do well at helping students on an academic track go on to higher education. But we do a terrible job at helping those on an apprenticeship track make the same journey to higher skills.
Here’s what the OECD said about the problem last year: ‘The weak articulation between level 4 and 6 programmes and university bachelor programmes is a serious problem’. There are now something like 200 apprenticeship frameworks – but just 13 of them stretch up to higher level skills. Just 6% of apprentices go on to bachelor’s degree level skills. We have just 6,000 apprentices training for level 5 qualifications.
Yet that’s the choice young people want. Earlier this year, I was in a different Rolls Royce plant in Derby and I asked some apprentices there why they’d chosen Rolls Royce. ‘It’s easy’ said one ‘We’re told in our first week here that the sky’s the limit. It’s the chance to go all the way, to go up to a degree level skill – but get paid along the way’. Right now, it seems, 94% of apprentices do not get that Rolls Royce experience – and as a country I don’t think we can afford that in the years to come.
Priorities for action
So what do we need to fix?
First, we have to protect our world-class science base. We have to ask ourselves whether we can sustain a world-class system if research capital is distributed by ministerial diktat, often going towards shiny new projects rather than where the money is needed. This is especially the case at a time when science spending is falling in real terms by £100M a year.
Second, if we’re to stay world-class we have to stop those measures that are shutting us off from the world. Where the signals read by students in countries like India, are please don’t come. Of course we need stronger checks on short-term student visitor visas. But when I met several hundred students at Delhi University last week, I was struck by how hard it was to convince people that the UK genuinely wanted them to come. It is simply ridiculous that students are today inside the UK’s net migration target.
Third, we’ve got to create a system with equal access for A-level students and apprentices; what you might call an ‘earn while you learn’ revolution. The government is boasting that its ‘uncapping student places’. But it’s only uncapping places for half of our young people who happen to be on an academic route. What about the other half who’d like to be doing apprenticeships? To deliver this, we’ve got to look at how we create a proper system of tertiary education, where our great further education (FE) colleges are more inter-connected with our universities. Colleges will become the mission-critical partner in transforming the apprenticeship system, so we need close ties between FE and HE if we’re to help those on an apprenticeship track move up through the system.
And we’ve also clearly got to look at the situation now faced by post-graduate students who are finding it harder and harder to get access to Career Development Loans, yet face a jobs market which increasingly expects post-graduate qualifications.
Higher education was crucial for me in the journey from behind a fry-station at McDonalds in Harlow, to the Harvard Business School, to representing Birmingham Hodge Hill.
But just 30% of my constituents enjoy the chance to get into Higher Education, and I want to transform that. If we’re to build a bigger knowledge economy we need higher education to be stronger; but for me a key part of developing a stronger, bigger system is ensuring that there are many ways to rise.
Liam Byrne is Member of Parliament for Birmingham Hodge Hill and the Shadow Minister for Universities, Science and Skills.