Things can only get better? Labour’s 2017 manifesto

16th May 2017

Stephen Evans, Chief Executive, Learning and Work Institute

It’s great to see a focus on Further Education and skills in the Labour manifesto. But we need more radical ways to invest if we’re to tackle the big questions

Labour has now launched its manifesto, after its pre-launch (i.e. leak) last week. There’s lots to welcome, and it’s rare that any frontline politician talks about Further Education with the passion and first hand experience of Angela Rayner. But in some places different priorities might better match the challenges of our time.

Further Education

It is unambiguously good news to see a commitment to invest in lifelong learning. This includes doubling the Adult Education Budget (AEB) to £3bn by 2022.

The other big spending commitments, part of a drive to a new National Education Service, are to end tuition fees in Higher Education (£11.2bn per year) and Further Education (accounting for around £250m of the proposed increase in the AEB), reintroduce the Education Maintenance Allowance for 16-19 year olds in full-time education (over £500m per year) , exempt schools from the Apprenticeship Levy (£150m per year) and equalise education funding for 16-19 year-olds (£500m – £900m, depending on the calculation used).

After almost a decade of cuts, it almost feels strange discussing extra investment. (I’ll leave it to the Institute of Fiscal Studies and others to analyse the realism and wisdom of the proposed sources of funding for this). But it’s a conversation we need to have: as a country, we must live within our means, but investing in skills can help increase our means.

However, where should this extra investment go? Analysis shows that removing university tuition fees would mainly benefit better off graduates (given fees are not paid up front, and their repayment means tested). How do EMAs fit with the raising of the participation age and rise of Apprenticeships? And, while it’s is not clear how the increase in the AEB would be invested, simply increasing the budget for the existing system is unlikely to give the transformational change we need (to be fair, manifestos are not the place for every detail and nuance of policy).

Some of the ideas we’ve floated in our manifesto include introducing Personal Learning Accounts, giving people the chance to co-invest and learn more flexibly, or perhaps mirroring Singapore where each citizen over 25 was given a SIN$500 to invest in approved learning to adapt to rising skills need.

In this respect, the proposals on Apprenticeships are perhaps the best part of the manifesto. In place of a cross-party focus on ever-increasing numbers of starts, the focus instead is on quality, outcomes, and increasing provision at Level 3. There is also a commitment to introduce participation targets for groups of people, such as people with disabilities and people from BAME backgrounds, that are currently under-represented in Apprenticeships. This s exactly the sort of thing Learning and Work Institute have been calling for. More please!

Work

The debate about work is one of the most pressing issues of the next decade. Our employment rate is at a record high (though with big gaps for some groups, such as disabled people, and parts of the country). But there’s been a rise in insecure work and we are on track to have the worst decade for living standards since the Napoleonic Wars.

This is squarely where Labour’s pledge for a £10 per hour National Minimum Wage (NMW) is pitched. It’s great that, almost 20 years on, the NMW is now a set part of the landscape: it’s easy to forget the controversy when it was brought in. There’s a clear case for continuing to increase it, as the economy allows, benchmarked as a proportion of average earnings. But we should proceed with caution, perhaps setting an ambition and asking the independent Low Pay Commission to get there as long as employment would not be adversely affected.

The Government was forced to backtrack on proposed cuts to in-work tax credits. But these cuts were left built into Universal Credit, which is gradually replacing tax credits. This is part of the reason the Institute for Fiscal Studies predicts those in the lowest half of the income distribution will fair worst over the rest of this decade. ‘Given this, and the level of extra spending proposed elsewhere, it is perhaps surprising that Labour commits  to only review and partly reverse these cuts.

A new Ministry of Labour would enforce and develop new worker rights, including: a ban on zero hours contracts; full employment rights from day 1; and doubling paternity pay. The risk, of course, is reducing employment by increasing the cost / risk to employers of taking on new staff: there’s always a balance to be struck. Meantime, there’ll be a commission looking at the legal status of different forms of work.

Lastly, there’s no mention of employment programmes to get people back into work. Instead the focus is on reversing some benefit cuts and sanctions policy. Given the 30 percentage point gap in the employment rate of disabled people and 80% cut in contracted employment programmes, this is a shame. We set out our proposals here.

Overall, it is good to see a commitment to investment in skills and to improving working conditions and incomes for the ‘ordinary working people’ that politicians so often invoke. The real question, aside from how the money will be raised, is the priorities for spending it. For example, the £10bn earmarked for ending tuition fees could pay for a reversal of cuts to Universal Credit and a substantial cut in National Insurance bills for low paid workers.

But there’s lots of good stuff and the right questions are being asked. As Labour’s 2001 manifesto said, “A lot done, a lot to do”.