Category Archives: Economics
I’ve received exciting news about an upcoming jobs fair – Birmingham’s biggest ever – on 6 – 9 May at Millennium Point.
See below for more details;
All the best
Birmingham City University is working with Birmingham City Council, Millennium Point, Birmingham Metropolitan College and partners to run Birmingham’s Biggest ever Jobs Fair, FREE to all from 6-9 May at Millennium Point.
We still have spaces available and employers will be provided with a free table and chairs, all you need to do is have live jobs available for young people on offer.
So far a range of big brands have signed up – Jaguar Land Rover, Amey, AGA Rangemaster, Aldi, National Express, MG, Hilton Metropole, Tesco, John Lewis, NHS, Thomas Vale, UPS, Wesleyan, amongst many others.
You can take part by registering here http://birmingham-made-me.org/youth-employment-submissions/
Alternatively you can email email@example.com
News from Liam Byrne MP
Birmingham Steps Up Fight against Child Poverty
Liam Byrne MP and Cllr John Cotton are stepping up Birmingham’s battle against child poverty on Friday by bringing together experts from across Britain to plan the city’s fight back.
The conference, which will be opened by the Bishop of Birmingham, will convene experts from Forward Thinking Development, Birmingham City Council, Unison, Citizens Advice Bureau, Child Poverty Action Group, Re-Source Central Foodbank, South and City College, DWP, Midland Heart Housing Association, St Basils, Castle Vale Community Housing Association, Ashram Housing, NHS England and others.
The conference will review the state of deepening child poverty in the city and pin down what the Council, schools, the NHS, charities and business can do together to fight back.
Liam Byrne MP said:
“This conference is a watershed in our fight-back against child poverty. Our belief is simple. Every child in Birmingham is equal and deserves a flying start in life. Yet if some are trapped in a child-hood of poverty, it will hurt them for life.
“My ten years as a Birmingham MP has taught me that this is a city of good neighbours – and good neighbours cannot stand by and watch the next generation suffer.
“This conference gives us the chance to bring together some of the world’s leading experts in tackling child poverty to help answer a simple question: what can good people in our city, from all walks of life, do to help.”
Cllr John Cotton said:
“A third of Birmingham’s children are growing up in poverty and in some neighbourhoods the number is even higher still. This is unacceptable.
We are already working hard as a Labour Council to try and lift families out of poverty through initiatives like the Living Wage. We’re also taking action to try and protect people from the impact of unfair Government policies like the Bedroom Tax and their savage cuts to Birmingham’s budgets.
But we have to do much more if we are going to ensure that every child gets the best start in life. This conference brings together the allies we need in the on-going battle to ensure that every child in this city gets the fair start they deserve.”
Operational use only:
1. The Birmingham Child Poverty Conference will take place this Friday 11 April from 10:00 – 12:00 at the Unison offices, Livery Street, B3 2PA.
Notes to editors
1. In February 2014 Birmingham Labour launched a policy taskforce into Child Poverty in Birmingham, its causes and what can be done to eradicate it. The taskforce is headed by Liam Byrne MP and Cllrs John Cotton and Tim Evans
2. Across the city over 84,000 children— almost a third of young Brummies—are now growing up on the breadline with the figure rising to almost half in some wards. Child Poverty Action Group figures show the estimated cost of Child Poverty to the city in 2013 was £914 million in extra services such as education, healthcare and benefits, as well as, lost tax receipts and lost earnings.
Agenda 2030 and Britain’s Higher Education Speech to Business in the Community: Role of Universities in Fostering Leaders
Tuesday 1st April 2014
Thank you very much.
It’s a great pleasure to speak to Business in the Community today.
I had to come and speak today in part to say thank you for everything you’ve done to help me in Hodge Hill, enjoining our fight against youth unemployment.
Over the years, and never more than today, you brought the enterprise, power and creativity of business to tackling problems we share in common, and today I want to draw on that tradition to talk about how we can work ever closer together in the field of higher education, preparing our young people and preparing our country for a very different world taking shape around us.
Let me start with where the country now finds itself.
You might say: what a difference a fortnight makes.
Last weekend saw much speculation about Labour’s position on how we pay for higher education. In due course, we will set out our plans. But Ed Miliband has made clear our direction of travel.
We have to reduce down the huge levels of debt write-off that make the today’s system unsustainable.
That’s the lesson from the revelations of the last two weeks;
Revelations which have driven a coach and horses through the government’s higher education policy.
Revelations that have raised huge concerns for students, for taxpayers and for Vice Chancellors.
They are revelations which have comprehensively changing the terms of the debate.
First, there was the admission to me in a parliamentary answer that the government now expects the write off of student loans to rise so high, that the new system of tripling student fees might not save the tax payer any money.
A surge of speculation that student fees might have to rise even higher quickly followed. In the Commons, Nick Clegg said there was no case for such a rise, but in the TV studio, David Willetts was telling a different story.
After her interview with the Universities Minister, Cathy Newman of Channel 4 News reported:
“As David Willetts was leaving the studio, I suggested it sounded like another tuition fees rise was on the way… ‘Could be’ was his response.”
Mr Clegg tried to defend himself by arguing that the amount students would pay back each month was less than under the old system.
He somehow forgot to mention that the average student today won’t pay their loans back for 27 years. That means students today will approaching 50 before they are free from the debt burden.
In stark contrast, it was estimated that for students starting after 2006/07 the average Student Loan would take 11 years to repay for men and 16 years for women.
This last week, we got the story’s latest instalment, when a fresh batch of answers arrived to the parliamentary questions I tabled on the scale of private providers now enjoying hundreds of millions of pounds of support funded by the taxpayer.
The sheer scale of the subsidy surprised everyone.
Nearly £1 billion of publicly funded loans and maintenance grants are now flowing through students to private providers.
That, as the Guardian pointed out, is a 2100 per cent increase in recent years.
But what really surprised me, is that government has no idea about the level of profit these private providers are now making.
In a parliamentary answer to me, David Willetts said, “The Department has not made an assessment of the level of profits made by for-profit alternative providers with courses of higher education that are designated for student support”.
But, worse, it turns out that the government doesn’t even check whether a college is profit making or charitable before it agrees loan support.
A further answer confessed; ‘In assessing students’ eligibility for student loans, the Department does not distinguish between those alternative learning providers that operate on a commercial for-profit basis, and those that do not. The information requested is not available.”
Just to round it off, Mr Willetts underlined; “The Department has no plans to regulate the profitability of alternative providers with courses of higher education designated for student support.”
You heard it.
Together these revelations have profound implications for the future.
Not so long ago, many in the university sector set out to me how uncapping students into the next parliament was a vote winner for the Tories.
But now it’s clear that what is proposed is a system that combines the worst aspects of a free for all and a money pit.
Call me old fashioned, but I happen to believe that public universities do a brilliant job.
The national system of higher education that emerged in the 1960s, with a national admissions system and a national grant regime ensured that today we enjoy not only world class universities, but a world class university system.
It’s diverse, it’s competitive in a way that encourages innovation in research and teaching and it deliver high standards.
It’s also highly efficient.
I happen to think we should be very proud of it.
What is not clear to me is how it is good for public universities to maintain a system where half of the new money earmarked for expansion is locked up in an escrow account to provide for loan write-offs, and where there is zero control of how much is creamed off in profit by a hungry private sector. I look forward to hearing the arguments in favour.
With this is mind, it’s very welcome that Universities UK is grasping the nettle and seeking to maximise cross party consensus on a new way forward.
I very much look forward to joining those talks, and to help get the conversation going I want to set out today the principles which I think should guide us.
These are principles deeply rooted in our history and academic traditions, but more importantly a sense of the future, in a world turning east, where technology is moving faster than ever, and where we in Britain need new answers to help us, collectively, earn our way to a better standard of living.
It’s not so much Robbins Revisited. Its Robbins Rebooted.
The starting point for our principles is the speech Chuka Umunna made to the Engineering Employers Federation a few weeks ago.
In that speech, Chuka set out the basic truth in politics today.
In a country, where living standards are under such acute pressure and where the deficit still looms so large, innovation is the only way out of austerity.
As Chuka Umunna put it; “We, the Labour Party, are clear about our goal: a high-productivity, high-skilled, innovation-led economy.”
That is why our universities are so important. They are the power-houses of the knowledge economy. They need to be bigger, stronger, more central to our economy in the years to come.
As the Royal Society put it so simply, so eloquently in 2010, Britain need to put science and innovation at the heart of a strategy for long-term economic growth.
Unless we grow smarter, we will grow poorer.
Over the last five months, I’ve travelled all over Britain talking to hundreds of students and teachers, scientists, innovators, business leaders large and small, sixth-formers and their parents, and most of the nation’s vice chancellors.
I’ve been struck how our debate is in sore need of a few basic principles.
You can take as read, my sympathy with some fundamentals, set out with characteristic eloquence by Nigel Thrift in his recent speech: British Higher Education: Where Next?
In particular I want to double underline what Nigel said about the importance of universities as ‘disinterested producers of knowledge for its own sake’ and that ‘universities must remain as conscious moulders of sceptical and informed subjects’, ‘focused on being public goods’.
Today, however, I want to step out further, and having reflected both on the IPPR’s seminal Commission on Higher Education, and Mr Willetts own contribution to the debate, Robbins Revisited, I want to set out five tests that I think should help us judge what good university reform looks like.
First, obviously, is financial sustainability. Good research, good teaching, needs good and sure foundations.
And what is now clear is the Tories’ student loan system that pays for our universities, voted through by the Lib Dems, is a time-bomb.
According to the Public Accounts Committee, its storing up perhaps £70-80 billion of debts that may never be repaid.
Today’s system with tripled fees and big debts for graduates is now as expensive as the system where students were charged a third as much. It has become an indefensible system. So people should now stop trying to defend it. Or relying on it for the future.
The second test, must be: what is good for our science base, our store of knowledge and wisdom. Whatever is proposed for the future must pass one simple judgement: is it good or bad for the science base?
Today, while other powers emerging and established are investing in science like never before, we are cutting science spending across government according to the Campaign for Science and Engineering, to the tune of over £800 million.
Nationally, research and development as a percentage of GDP is at its lowest level since the turn of the century. Last year it fell for the first time since 1985.
Test number three, is student choice. Are we offering students a real choice of pathways through to higher level skills?
Today, while we do a decent job of getting A level students or those on an academic route to university, we do a terrible job of lifting apprentices up to the same standard.
While great firms, like Rolls Royce train fifty per cent of their apprentices to degree level skills, as a country we manage just six per cent. That’s right, six per cent. The grand total of 6,000 people. It’s not good enough. Its not good enough for the future.
As if I needed persuading, this was a point rammed home for me in Paris yesterday by OECD economists and policy advisors.
Fourth, we need to do far more to fix Britain’s skills base; when regional skills gaps are opening wide all over Britain, then I’m afraid we do need a deeper conversation between business and universities about the graduates we’re educating.
I’m a firm believer in education for education’s sake.
But I know too that a good job is fundamental to the way we flourish and right now half of graduates are not in graduate level jobs.
Finally, Labour will always demand faster progress when it comes to social mobility.
The shutdown of Aim Higher was obviously foolish. The IPPR is amongst others who have proposed new ideas like a ‘student premium’.
NUS has consistently argued for better hardship funds to help poor students stay the course.
It’s time these arguments were taken seriously.
These are the tests that should shape the way we think about the future. The government’s proposal to pour more money into ‘more of the same’ has now been exposed as impossible.
What’s proposed isn’t sustainable, it does nothing to boost the science base, diversify student choice, or bring universities and business together, or deliver fast enough progress towards social mobility.
Half the new money proposed in the next parliament bleeds straight out to provide for debt write-off – and much of what’s left will go straight to the hundreds of private providers whose students now consume north of £850 million a year in public subsidy, while zero control on their profitability.
I put it to you that this is not a system that is fit for purpose.
This year we celebrate an important anniversary in the Labour calendar. The 50th anniversary of Harold Wilson’s election – a moment when a party relentlessly focused on the future swept away an old boy network lost in the modern world.
Higher education was central to our offer then.
And so it is today.
The Tory ways have failed.
It’s time for a new way forward.
Chinese business leaders in Birmingham in bid to boost relations
The party will also meet officials from Birmingham University to discuss the university’s collaboration with a range of organisations in Guangzhou, the third largest city in China. And they will have lunch with Prof David Eastwood, the university’s Vice Chancellor
Top government officials, academics and business leaders from China are to visit Birmingham as part of a high-powered event to improve relations.
The delegation from China will also spend two days in London meeting senior officials such as George Osborne, the Chancellor and Vince Cable, the Business Secretary, and a day in discussions with British politicians such as former Trade Secretary Lord Mandelson.
The fourth and final day of the visit, on March 28, will be dedicated to Birmingham.
A delegation of more than 10 officials from China, as well as staff from the Chinese embassy in the UK and Chinese businesses operating in Britain, will have dinner with Birmingham City Council leader Sir Albert Bore at a city restaurant.
They will receive a briefing from council officials on the economy of Birmingham and the wider West Midlands region, and opportunities for trade and investment.
The party will also meet officials from Birmingham University to discuss the university’s collaboration with a range of organisations in Guangzhou, the third largest city in China. And they will have lunch with Prof David Eastwood, the university’s Vice Chancellor.
The event will be the 7th UK-China Leadership Forum, the name given to a regular meeting between senior figures from both country.
China’s delegation will be led by Yu Hongjun, a Vice-Minister in the International Department of the Central Committee of the Communist Party of China, which is responsible for forging links with foreign political parties and organizations.
Also taking part are officials from the People’s Bank of China and from the Communist Party’s foreign affairs office.
Their visit to the UK will include meetings with representatives of Barclays Bank and BP, as well as Sir John Cunliffe, a Deputy Government of the Bank of England, who will talk about the economic outlook for Britain and challenges faced by the UK and EU.
And to ensure they receive a rounded view of Britain’s political system, they will be treated to a five minute presentation on Conservative Party policy from former Business Minister Mark Prisk, titled “an aspiration nation for hard-working people: the Conservative Party vision for 2020”, as well as a presentation from Labour Shadow Education Secretary and Stoke MP Tristram Hunt (Stoke-on-Trent Central), titled: “Rebuilding Britain for 2020: the Labour Party’s One Nation Vision”.
As well as Mr Hunt, Midland MPs due to meet the delegation include Emma Reynolds (Lab Wolverhampton North East), John Spellar (Lab Warley) and Liam Byrne (Lab Birmingham Hodge Hill), who is a regular attendee at UK-China Leadership Forum events and author of Turning To Face The East, a book looking at how the UK can succeed in a global economy where China is increasingly important.
Mr Byrne said: “Birmingham is showing the rest of Britain how to win in China. But this is no time to rest on our laurels. This week’s chance to show off our city to powerful delegation of Chinese decision-makers.
“If we want more good quality jobs of the future then we need to become one of China’s favourite places to invest. So the more we bring together China’s investors and politicians together with our great city, the better.”
Sir Albert Bore, who visited Guangzhou last year, said: “Birmingham is an essential engine of the UK economy and it is vital that we continue to forge links with thriving economies worldwide. This council has for a number of years created very close links, and established three sister cities, in China, something I am continuing to do.
“The West Midlands is the only UK region to have a trade surplus with China, over £1.7 billion in 2013 and crucially, the Chinese also see Birmingham as an increasingly important investment location.”
Professor Edward Peck, Pro-Vice-Chancellor, Head of the College of Social Sciences and academic lead for China, said: “Birmingham is celebrating a very successful year of engagement with China.
“Following the University’s original approach, which focuses in particular on Guangzhou, we have secured funding for research collaborations with the City Government, local universities, research institutes and regional enterprises in the areas of health, life sciences and engineering.
“We are delighted to be welcoming this delegation to Birmingham.”
I just wanted to let you know about a great Jobs Fair happening in Castle Vale next week. All the details you will need are on the flyer below.
You can access a PDF of the flyer using this link: JOBS FAIR – CASTLE VALE – 2 APRIL 2014
The Department for Business, Innovation & Skills have now answered my Parliamentary Question on the RAB charge on student loans.
PQ No. : 2013/3264
THURSDAY 20 MARCH 2014
Liam Byrne (Birmingham, Hodge Hill): To ask the Secretary of State for Business, Innovation and Skills, what recent estimate he has made of the RAB charge on student loans. (192816)
Rt Hon David Willetts
This Department has been reviewing our modelling of the RAB charge on student loans. We currently estimate the RAB charge on student loans to be around 45%, which reflects our current estimate of the costs to Government of the higher education subsidy to students. By its nature an estimate is subject to change as it is highly dependent on macroeconomic circumstances, and the growth of graduate earnings over the next 30 years.
We will continue to review our estimates in line with the latest data and advice from experts and stakeholders.
And here’s my response:
This is fresh evidence that our university finance system is turning into a money pit. The system is now haemorrhaging cash that will never be repaid and reinvested in the next generation. It’s high time David Willetts came out and told us exactly how much this strung together system is costing the taxpayer, rather than dress it up with clever accounting tricks. First, he tells us that the RAB charge is 35%, then 40% and now it hits 45%. It’s time to call a halt to this descent into chaos. Their funding model fails the sector, it fails our students and it fails those whose hard earned wages continue to prop it up.
‘Child poverty costs Birmingham £1 billion a year’ – Birmingham Mail article on Child Poverty in Birmingham
Last Friday I visited Re.Source Central foodbank in Ladywood with Cllr John Cotton and Cllr Tim Evans. The visit was a part of the Birmingham Labour Party’s review into Child Poverty in the city.
The Birmingham Mail have written an article highlighting the issue:
Child poverty costs Birmingham £1 billion a year
MP Liam Byrne warns a third of youngsters in city are growing up on breadline
Extra services for Birmingham children growing up in poverty are costing £1 billion a year, an MP has warned.
Liam Byrne (Lab Hodge Hill) and Labour councillors have launched an inquiry into child poverty in the city.
A third of young Brummies are now growing up on the breadline with the figure rising to almost half in some wards.
The worrying figures come just weeks after the Mail reported how the city’s police and crime commissioner Bob Jones had warned that parents were being forced to steal food so their children can eat.
West Midlands Police has seen a big rise in the number of shoplifting offences – last year saw 29,104 in the West Midlands – a rise of 11 per cent.
Officially, Ministers claim they have no figures showing the number of children in poverty in towns and cities.
But a study by campaigners Child Poverty Action Group estimates that 84,114 children in Birmingham and are poverty, or 31 per cent of the total.
And this costs the city £914 million a year in extra services such as education, healthcare and benefits, as well as lost tax receipts and lost earnings, according to the campaign group.
Mr Byrne had asked ministers for official figures, was told they were not available.
The MP said: “It’s patently clear that the government simply doesn’t give a stuff about Birmingham’s youngsters, so we’re going to have to take action ourselves.”
Coun John Cotton, Labour’s Cabinet Member for Social Cohesion & Equalities said: “Birmingham’s Labour-led Council is already working hard to pick up the pieces by supporting families hit hard by Government cuts and the unfair Bedroom Tax.”
The Government says it has taken a series of measures to cut child poverty including investing an additional £200 million in childcare, making it easier for parents to work, channelling £2.5 billion to schools teaching low-income pupils, providing free school meals for all infant school children from September 2014, cutting tax for 25 million people by increasing the personal tax allowance and cutting income tax for those on the minimum wage by two thirds.
Ministers have launched a consultation on what more can be done to cut child poverty.
It follows the Birmingham Mail’s recent Brum on the Breadline investigation which uncovered demand for food parcels at some city food banks had rocketed by almost 50 per cent in a year.
And new figures from Christian charity the Trussell Trust which runs the Birmingham Central Foodbank have revealed a huge rise in the numbers seeking help.
In the 12 months from April 2009 to March 2010 just 4,064 people were given three days emergency food in the West Midlands. In the eight months from April to December last year, the number was 66,066.
THE MAIL SAYS
How scandalous that in, our relatively prosperous city, so many children are enduring grinding poverty.
The recent years of economic struggle, of course, are a major cause of the hardship faced by so many families.
But though things are looking brighter for many, those at the bottom of the pile are still battling to make ends meet.
The public sector faces a vast bill to pick up the pieces.
But the cost to the individuals themselves is beyond calculation.
Those born into poverty are likely to struggle to break the vicious circle that ensnares them.
Politicians, civil servants and business must find a way to help lift this burden.
Read the article here: http://www.birminghammail.co.uk/news/child-poverty-costs-birmingham-1-6794221
‘The Future of Work and The Earn While You Learn Revolution’ my speech to the Work Foundation – 3 March 2014
The Future of Work and The Earn While You Learn Revolution
Speech to Work Foundation
Rt Hon Liam Byrne MP
Monday 3rd March 2014
It’s a huge pleasure to kick off National Apprenticeship Week with a keynote speech to welcome your report on the future of work.
For us in the Labour party, this is an important week in an important year.
We’re hugely proud of our record rescuing the apprenticeship system from the state in which we found it.
We’re very proud of the work of the National Apprenticeship Service, which we created.
And we’re proud of National Apprenticeship Week, which we began.
This week is a chance for all of us to celebrate the extraordinary job of our apprentices – and former apprentices – like Sarish Jabeen in my Hodge Hill team serving my constituents with such skill and commitment week in, week out.
This week is a chance for us all to say that we’re determined to do more to support apprentices, like Sarish, in the years to come.
And that’s what I’ve come here to say this morning.
Our starting point
Now, I am very glad that you’ve called your conference the future of work.
I’m glad because this year we celebrate a very important anniversary in the history of our party.
It’s the 70th anniversary of the famous white paper on full employment.
It was seventy years ago this year that Ernie Bevin stood up in the Commons to present that famous paper, replete with its famous first paragraph that henceforth:
“The government accept as one of their primary aims and responsibilities the maintenance of a high and stable level of employment after the war”.
The Labour party has is and always will be the party of work. We believe work is fundamental to your flourishing as an individual; we believe in the transformative power of the pride and dignity of a job.
And that is why we are determined to put jobs at the heart of our manifesto for 2015.
The government would like you to believe that everything in the labour market is rosy.
There’s a lot more jobs to go round they say.
Well, look: as someone who started work behind a fry station in McDonalds, I believe that any job is better than no job.
But I know too that a good job is better than a bad one, and right now, there aren’t enough good jobs to go round.
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 by working hard.
- Nearly 80pc of the jobs created since the election are in low skilled sectors.
- Average earnings are now £1,600 lower per year than they were at the last election.
- The average family has to work two hours extra each week, just to make what they did four years ago.
- The great wage crash is now almost proving as damaging to workers’ livelihoods as the global financial crisis caused by the banks.
I think it should be pretty clear that this is not the kind of country we want to live in.
A low pay, low skilled, low value added economy, out-paced and out-boxed by new powers, rising around the world and old nations who, unlike us, have got their act together.
We can’t go on like this. We have to change course. And this morning I want to sketch out how.
The Future of Work
Let me start with where you start; the future of work.
It’s no secret that there are some big forces at play.
Technology has now automated huge numbers of what were once, reasonably skilled, reasonably paid jobs. And sometimes it feels like what technology hasn’t killed, trade has moved to those parts of the world where workers are cheaper.
In America, economists Autor & Dorn are amongst many who’ve reported:
there’s been massive substitution of those ‘low skill workers performing routine tasks – such as book-keeping, clerical work and repetitive production and monitoring activities – which are readily computerized because they follow precise, well-defined procedures’.
It’s created what some call the hour-glass; high skill jobs, and low skill jobs and very little in between.
This is exactly what is happening here in the UK.
Indeed, the Resolution Foundation tells us that jobs in sectors with a high concentration of routine tasks fell by 5% between 2007 and 2012.
But guess what: there may be an awful lot worse to come.
A book that a lot of people are reading right now is the Second Machine Age.
It’s a positive book and its argument is simple:
Our ability to combine technology – processing power, cheap sensors, robotics, networks, social media, big data, means we’re now at an inflection point in our ability to combine and recombine technologies to do new things, revolutionising technology from Google’s driverless cars to better diagnosis of diseases.
- There’s now enough technology in a Nissan LEAF to render the car a fly-by-wire robot, the kind of technology that could revolutionise the logistics industry.
- GE already makes robots that can climb and repair wind turbines.
- Future Advisor already uses Artificial Intelligence that’s strong enough to offer personalised financial advice.
- Algorithms are taking on tasks once performed by para-legals, contract and patent lawyers.
- Oncologists at Memorial Sloan-Kettering Cancer Care use IBM’s Watson computer to provide chronic care and cancer treatment diagnostics.
What’s does this mean for jobs?
Well, academics at the Oxford Martin School now estimate that as many of 47 per cent of the jobs in our economy today may be automated.
First it was the blue collar jobs. Now it’s the white collar jobs as well.
So what do we do?
Well, economists have worried about this kind of problem since JM Keynes flagged the issue of ‘technological unemployment’ back in 1930.
And as Keynes argued then, this can be a ‘temporary phase of maladjustment’ but only, I believe if we now get three things right.
First, we have to grow our knowledge-intensive industries; those firms in sectors like – computer programming and consultancy, pharmaceuticals and telecommunications – with a lot of intellectual property that they want to keep closely guarded.
Right now, those firms make up 1/3 of output, 1/3 of businesses but just one in five jobs.
Now if it was 1/3 of jobs, then we’d have 2.4 million more jobs in knowledge intensive industries.
Those jobs pay an awful lot more than average – £161 a week more – and that’s why other countries are working so hard to put science and innovation at the heart of their growth plans. We should do the same.
Second, we have to foster enterprise, new business and start-ups like never before.
It’s why we’re determined to be the party of small business and enterprise.
But, third, you have to build a great escalator to these new well-paid jobs for people, no matter where they started in life.
Right now, for many people, that escalator is broken.
Now, we do well at getting young people on an academic track into university.
The changes we made in office have created one of the strongest higher education systems in the world.
But, we our vocational system is not world class.
In fact, it’s a long way from world-class.
Here’s what the OECD said about our country last year:
‘England has too little vocational provision at post secondary level in comparison with many other countries, and relative to potential demand’. OECD P7
Just 10 per cent of the post secondary cohort is in vocational education and training – when many OECD countries have three times as many.
Neither our young people, or our employers think this is good.
McKinsey found that just 40% of UK young people believe that post-secondary education improves their employment prospects – that’s the lowest figure in the OECD.
Over two-thirds say that academic paths are more valued by society than vocational alternatives;
A third of employers now say that the lack of skills is the reason for entry-level vacancies and thanks to the destruction of our careers service, many young people are terribly informed about post-secondary choices.
So: what are the changes we need to make?
First, we have to create a gold standard technical qualification route for young people, with strong English and Maths, studies up to the age of 18
Today, Tristram Hunt is saying more about how we will create an aspirational new ‘National Baccalaureate’ for all school leavers which includes rigorous, stretching and labour-market responsive academic and vocational qualifications and skills;
How we will tackle the scandal of the more than 1 million young people not in education, employment or training by requiring schools to ensure their pupils progress post-16 – and use existing funding to support a radically transformed careers guidance system;
And how we will confront England’s international standing in maths and English by ensuring all young people continue to study assessed maths and English to 18.
Second, we have to at least double the number of apprenticeships on offer.
When it is harder to get an apprenticeship with Jaguar Land Rover than it is to get into an Oxford college, then I think it’s pretty obvious we need more.
In fact, there’s a strong case for saying we need to double the numbers of high quality apprenticeships.
Right now, we have 140,000 young people who are not in education or training.
Surely most of these young people should be on an apprenticeship.
So we’ve said that we will set up a something-for-something deal with employers – giving industry much more control over skills spending and standards, and in return asking that they increase the number of high quality apprenticeships in their sectors and supply chains.
We’re also studying hard the reforms pioneered in Manchester, which has been testing a UCAS style system for apprentices – long before Nick Clegg announced it.
And we like the look of the extraordinary pioneered in Leeds, where the City’s new Apprenticeship Hub, has doubled the number of apprentices in the city especially amongst SMEs, which as we know are creating jobs much faster than big business.
Third, we need to show young people and their parents that apprenticeships are a route the top.
For many aspirational families, they worry that apprenticeship are a cul-de-sac and not a fast-track to greater things.
The evidence shows they’re right.
I say: there should be no limits on how far an apprentice can go.
But that means revolutionising the number of apprentices who study university level qualifications.
Overwhelmingly, degree level education is the dominant course of post-secondary education.
There are 10 times as many people studying bachelor’s degrees as foundation degrees.
But the OECD found (in 2009) that the progression rate for apprentices at level 3 into higher education is just 6pc in the UK, slightly better than one in twenty.
‘The weak articulation between level 4 and 6 programmes and university bachelor programmes is a serious problem’
That is simply not sustainable in the world that is coming.
If we’re to solve this, I think we are going to need a far imaginative reform for higher education than simply abolishing student number controls for universities.
We’re going to need real action to create student choice.
Over the next few weeks, I’m afraid you’re going to see the Conservative party go into election mode.
The story they’ll tell is simple.
The problems we face today can only be solved if we set out a bold plan for less government.
In the words of the authors of Britannia Unchained, they’ll say “the siren call of the statists’ must be resisted and the “deadwood from the public sector” cut back.
Well, I’ll share a secret.
It wasn’t too much government that caused the financial crash. And it wasn’t too much government that caused the wage crash either.
What we need today is some-one to fix the market, with a different kind of government. A smarter government, determined to act to help our country grow and create a society where no matter who you are or where you’re from, if you work hard, you’ll succeed.
That’s the country I want for my children and my constituents.
I’m some-one who has been very fortunate in life.
I went from behind a fry station in McDonalds in Harlow, to the Harvard Business School to start a business, to represent Hodge Hill with a seat in the Cabinet.
Today, my young constituents are denied those kinds of chances. More than one in five is unemployed and two thirds don’t get to go university.
I am in politics to change that.
I am in politics to restore the kind of social mobility that once upon a time we had in this country.
And I believe we can do it, but only if we change course.
I know the size of the task.
But with your help, I believe it can be done.
Thank you very much.
 Autor and Dorn, Services and Polarisation, American Economic Review, 2013.
 McKinsey, p.18.
 In Scotland the ratio isn’t 10 to 1, it’s 2 to 1.
 OECD, p45
 OECD, 46
Last week I led a delegation from the Commonwealth Parliamentary Association (CPA) to India. Whilst on the trip I wrote an article on UK / India collaboration on Higher Education and particularly International Students for the Times Higher Educational Supplement. You can read the text of my article below:
We must rev up our relationship with India
27 FEBRUARY 2014
The UK has to strengthen ties with Asia if it is to reverse the decline in international students, says Liam Byrne
The fall in international student numbers has caused widespread concern across UK universities – and rightly so. Amid a booming global market for higher education, a drop in numbers reveals one blunt truth: Britain is losing market share.
I’ve just returned from India, where I was getting to the bottom of what we need to do to stop the decline and restart the growth. Three facts are striking.
First, we are not even at the “end of the beginning” of our education relationship. Education leaders in India are very clear about the value of international links. “We want our students to be able to compete as global citizens,” one college principal said to me. It’s as simple as that.
The British Council has breathtaking forecasts about the size of the Indian student market. It is not simply that there are more than 600 million people under the age of 25, it is also that Indian students have the biggest appetite to learn abroad. In a country that is clear about the economic virtues of learning English, just 10 per cent of the 1.2 billion population speak English and only 5 per cent speak it well. There is a huge market for us to aim at.
Second, the British education brand still holds extraordinary lustre – but our competition is increasing dramatically.
In a Q&A with 100 students at the elite Sri Venkateswara College at the University of Delhi, I heard from India’s future research scientists, biotech entrepreneurs, teachers, journalists and politicians. What is fascinating is how many of these young people consider international experience and connections to be critical to their future success. But plenty are worried about the chances of landing a graduate level job in the UK even if they manage to undertake their undergraduate studies here.
Timothy Garton Ash, professor of European studies at the University of Oxford, recently argued in a national newspaper that a thesaurus does not contain enough words to describe the folly of the government’s approach; last week, his comments featured in the op-ed pages of The Hindu andHindustan Times.
I know better than most the challenges of getting the immigration balance right. When I was immigration minister, I created the UK Border Agency and introduced the points system. I took immense care to create a system that I thought would work well for UK universities, not least because every British ambassador I met told me that increasing foreign student numbers was the key to expanding our long-term influence in countries where we are not quite the centre of diplomatic attention.
No doubt I did not get everything right. But the signals sent by the reforms of the past three years are heard loud and clear by potential students in India, creating a great wall of noise that makes it harder, not easier, to get the message through about our brilliant UK universities.
That is why it is simply ridiculous that students are in the “net migration target”, and that is why David Hanson, the shadow immigration minister, and I will be soon hosting round-table talks with university and further education leaders to discuss how to claw back lost ground. After all, universities in India have plenty of choice in terms of selecting international partners. One leading principal told me that she was partnering with institutions in Germany and Italy because they teach English well – and more cheaply than we do.
Third, we have to think more radically about building a deeper and wider UK-India education relationship.
Indian vice-chancellors are hungry not just for UK students, but for joint research, faculty and postdocs, beyond the 600 or so education partnerships created through the UK-India Education Research Initiative.
India’s business leaders, like their counterparts in the UK, want a better supply of more “employable” students, and the Indian government has set a target of upskilling an incredible 500 million people within a decade. Like us, Indian policymakers worry about closing the gap between secondary school and university, and that means vast opportunities for our great further education colleges.
So we should be immensely ambitious. If the global race is anything, it is an innovation race. Indian leaders know that they have to double the less than 1 per cent of gross domestic product they currently spend on R&D if they are to put “affordable innovation” within reach of the Indian mass market. Frankly, we face the same challenge. The fastest way out of today’s living standards crisis is to increase the number of people working in knowledge-intensive sectors, where wages are 40 per cent higher than the national average.
You need only look at the extraordinary success of Jaguar Land Rover, a subsidiary of the Indian carmaker Tata Motors, just north of my Birmingham, Hodge Hill constituency, to see what is possible. The fundamentals of our innovation relationship are strong and getting stronger. Developments such as the new Emerging Powers Research Fund, for international scientific collaboration, and Newton International Fellowship scholarships are exactly the kinds of initiatives I called for in my book Turning to Face the East: How Britain Can Prosper in the Asian Century (2013).
The surest way to put this relationship in the slow lane is to make it ever harder for students, teachers and researchers to get across the border.
For political junkies, it is a good time to be in India, the world’s largest democracy. The country is about to go to the polls and, for the first time in years, a change is on the cards.
During my visit, the finance minister presented his budget, a last chance to put a few poll-winning goodies before the voters. And what was there among the headlines? Big new subsidies for student loans. Indian politicians know the allure of a better education for the world’s biggest middle class. We should be doing more to put those dreams within reach.
Last week I led a delegation from the Commonwealth Parliamentary Association (CPA) to India. Whilst on the trip I wrote an article on UK / India collaboration on Science and Innovation. You can read the text of my article below:
The UK and India can both prosper through forging an innovation partnership, writes Liam Byrne in Bangalore
If Britain is to escape the cost of living crisis, it must grow the size and strength of its knowledge-intensive companies, which offer a pay-packet 40 per cent bigger than the national average and generate a third of the national output but currently employ just one in five of the nation’s workers. To do so, Britain needs to become the best place in the world for collaborative science and innovation—and I am convinced that will require deep roots in India. So I have been in Bangalore this week to study the future of what is set to become one of the UK’s most important relationships.
From its modest start as the humble home of small firms like Wipro, Infosys and Biocon, Bangalore has grown to hosts 40 per cent of India’s IT industry and most of its biotech. But it is the city’s ambitions for the future that have really caught my eye. The state government’s cabinet is clear about its plans to supplant San Francisco as the world’s leading IT hub within the next eight years. On Friday the Deccan Herald carried stories of a proposal for Bangalore to become India’s first “smart” city. The business community is organising behind ambitious plans for new infrastructure. This is an ambitious place. How can the UK and India harness these ambitions and ride into the future together?
There are three things to do. First, innovation should be put at the heart of the relationship between the UK and India. This is a delicate moment. The British government is scaling back its foreign aid to India and instead proposes to provide technical assistance and collaboration on great global causes.
With less money to spend in the future, Britain needs to spend strategically. Speaking to development experts, village and city leaders and economists, it is clear that there will be huge demand for help on building low-carbon cities, public health, water and sanitation, urban transit, education and, crucially, good governance. These are all areas where systematic, creative and applied policy innovation between the UK and India could not only boost inclusive growth, but also deliver ideas to offer to the rest of the world.
Second, the damage done to the image of British further and higher education must be repaired. The British government’s net migration target has projected the impression that Indian students are not welcome in the UK. Tim Garton Ash of the University of Oxford recently wrote: “Stupid. Incoherent. Short-sighted. Cack-handed. Intrusive. Counter-productive. One thesaurus is not enough to describe the folly of the British government’s policy towards foreign students.” His comments were widely featured in India this week on the op ed pages of the Hindu and Hindustan Times.
As I have said before, it is ridiculous that students are included in the net migration target, not just for the immediate damage but also because it stops people from thinking far more radically about how to build a deeper, wider education relationship which allows students to incorporate study in India into British degree or research programmes—and vice versa. The business community in Bangalore is seeking such programmes.
The British Council has breathtaking forecasts about the size of the Indian student market: it is not simply 600 million people under the age of 25, but their extraordinary international mobility. Education leaders in India are ambitious for international links and the British education brand still holds great lustre, but the competition is increasing.
Yet as Britain pivots east, India is pivoting west to America and east to Japan. The US-India civil nuclear deal struck in 2005, which enables India to buy nuclear fuel and technology from the US, has yet to yield, but strategically the US-India relationship is strong. It is striking how many of the entrepreneurs I met in Bangalore were educated in America—and how many young people in India look to the US before Europe. Meanwhile collaborations between India and Japan are also strengthening.
The third thing to get right is how to move from shared research to shared innovation. Since 2008, UK-India research has grown to some £150 million, not least because of the excellent work of Research Councils UK and the British High Commission’s science and innovation team. But the challenge now is to build a much bigger innovation relationship.
So I should like to see a good chunk of the £90 million fund for research collaboration with emerging nations, announced by the chancellor George Osborne in his autumn statement, dedicated to UK-India innovation. I want more work to build stronger, bigger joint catapult centres in Bangalore, a popular idea with Bangalore IT entrepreneurs. Crucially I want to see a long-term plan for UK-India innovation that integrates the work of the research councils, the Technology Strategy Board and UK Trade and Investment, with perhaps a bigger shared venture fund. One model for this kind of coordination is the UK-Israel hi-tech hub in the British embassy in Tel Aviv.
The UK and India are capable of great things, as evidenced by the success of Jaguar Land Rover just north of my Hodge Hill constituency. The Royal Society’s bold plan for the first Commonwealth science conference to be held in Bangalore is a fantastic chance to light up in technicolor UK-India science collaboration. The vibrant UK-India Education and Research Initiative, the new emerging powers fund and the Newton scholarships run by the British Academy and the Royal Society are all very welcome initiatives and exactly the kind of proposal I called for in my book, Turning to Face the East, last year.
Britain should be immensely ambitious about the UK-India innovation partnership. History has made the two countries good friends. But the future makes us partners. Let’s make it a partnership with ambition.
Liam Byrne is the shadow minister for universities, skills and science. He led the Commonwealth Parliamentary Association delegation to India this week.