The devolution agenda is important because in many communities (often, but not always) outside London and the southeast – good, skilled, unionised jobs that pay enough to raise a family have gone. This is why we badly need to rebalance the economy; your life chances should not depend on where you are born.
We are using the opportunity provided by devolution to encourage more balanced, regional economies across the country. For example, the TUC has a co-opted observer seat on the West Midlands Combined Authority (WMCA) Board and reserved places on all its Commissions. This unique set-up came about as a result of Local Enterprise Partnerships (LEPs) and politicians of all stripes recognising that unions have a key role to play in raising productivity in the region.
The West Midlands hasn’t lost all its good quality industrial jobs. But since the labour market recovery began in 2011, 28 per cent of the jobs created in the West Midlands have been insecure; whether due to low-paid self-employment, zero hours contracts, casualisation, or working through an agency. Workers in the region earned almost £900 less per year in 2016 than in 2008.
The West Midlands Combined Authority (WMCA)’s Productivity and Skills Commission is looking into what is holding the region’s economy back, and what might be done about it. I’ve summarised our recommendations to the Commission below (NB: transport, public services, and infrastructure were beyond the scope of the Commission’s call for evidence, so those issues aren’t included here):
How can local or national government possibly deliver ‘inclusive growth’ if it isn’t properly measuring social trends in poorer areas? If they only make investment decisions on the basis of (e.g.) Gross Value Added (a local measure of GDP) and other high-level statistics then they risk ‘picking winners’. This might mean that the mayor’s investment budget is concentrated in already successful areas at the expense of generating new growth in poorer parts of the region. The result would be widening inequality and unnecessarily limiting productivity.
The RSA argued that we need to get much better at measuring growth, by taking into account things like:
Measuring these sorts of issues would be a much richer source of evidence to support investment decisions. But we’d also add that a new “Quality GVA” metric should also measure worker voice (e.g. collective bargaining coverage, worker representation on boards).
Comparing spending across the OECD, government investment in the UK ranks 20 out of the 27 countries for which data are available. Lack of government investment is driving reduced demand, and this is the main drag on UK productivity.
People prefer working for an organisation that treats them with respect and values their views and input. It’s rewarding to feel like your skills and knowledge are making a valued contribution, whether you work in a high paid, high productivity sector or in low paying industries. This sort of commitment translates into lower staff turnover rates and lower levels of sickness and absence, which drives up productivity.
This is a massive task to undertake, but the Midlands can learn from the Welsh Government’s ‘Fair Work Nation’ programme, and kick things off by establishing a ‘Commission on great jobs’.
The TUC is keen to work with the WMCA and partners in the region to explore how to create the best possible investment environment for high productivity sectors, like automotive. This is a key priority given the prospect of a ‘hard Brexit’, which could have severe impacts on the automotive supply chain and FDI.
The West Midlands devolution agreement gives the mayor powers over adult skills. However, this is in the context of substantial cuts to Further Education since 2010, which the WMCA should call on the government to reverse. The WMCA should also:
What should the mayor do with the existing (limited) funds available? We welcome the mayor’s commitment to focus on digital upskilling, but we mustn’t forget that the West Midlands ranks worst in the country for basic numeracy and literacy – so educational support is essential. The WMCA can also use its devolved budget to:
Finally, the government-sponsored Union Learning Fund could support skills and learning relating to major infrastructure projects in the region such as HS2. The WMCA should explore opportunities to support union ULF bids on projects like these in 2017-18 and beyond.
Devolution to the West Midlands provides a good opportunity to rebalance the region’s economy away from low skilled, insecure work, creating economic gains through increased productivity and better life chances for residents. Working with the mayor and the WMCA, unions will continue to do what they can to support an inclusive growth agenda, so no community is left behind.
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