Money Mili-bank: who will pay for a skills revolution?

26 Jan 2015 Ryan Miller    Last updated: 28 Jan 2015

Labour leader Ed Miliband speaking at the Heenan-Anderson Commission
Labour leader Ed Miliband speaking at the Heenan-Anderson Commission

If Ed Miliband becomes PM he wants to overhaul our skills base to drive future prosperity - but training budgets are being slashed, so how will this be possible? Scope examines the issue.

Ed Miliband was in Belfast last week talking up his hopes for a prosperous future – based on high-wage private sector jobs filled by a well-trained local population.

That doesn’t sound a lot like Northern Ireland.

Clearly Miliband wants to be seen as a reformer – and has made efforts to distance himself both from the coalition and the last Labour government, of which he was a part – but how clear are his plans for Northern Ireland?

A lack of local candidates presents the Labour leader with both a challenge and a get-out-of-jail-free card. It is difficult for him to speak directly on devolved matters, but this also provides a shield from blame for many of our issues.

In truth, much of Stormont policy necessarily takes its cue from Westminster – if provision in NI is wildly out of kilter with the rest of the UK someone, somewhere will make a fuss – and, as things stand, Miliband is a coin toss away from being our next Prime Minister.

Despite the hazy connection between any Labour government and the day-to-day running of NI, what Miliband says should of course be required listening for anyone interested in local public affairs and policy.

But was it, really? Speaking at the Heenan-Anderson Commission into economic marginalisation and deprivation last week, he offered a few broad ideas about how a Labour government would address these problems; broad ideas breed more questions.

The Leader of the Opposition wants to sound hopeful while talking about difficulties in the future, and give notice that a Labour government would remain parsimonious, but still taking the coalition government to task over the extent of their spending cuts.

Central to Miliband’s apparent plans for an upturn in living standards for the masses is more and better skills training – he cited a “high skills, high wages” economy and plans for a “race to the top”.

Stormont plans to adjust corporation tax rates are a bid to attract foreign direct investment and just these sorts of jobs – but critics have said our low skills base is a crucial reason why this move will not work.

But, if he acknowledges we live in straitened times – amid rising demand in the public spending behemoth of health and social care – then how does he propose to push forward a skills revolution?

Miliband himself spoke last week about further reductions in spending, albeit more moderate than put forward by David Cameron.

The Department for Employment and Learning’s budget makes grim reading, with the very existence of two local training colleges called into question in the past week. So how are we going to increase provision?

Inequality

Opening his address at Heenan-Anderson, Miliband said: “For me there’s no greater challenge than inequality. It’s at the core of my politics and the core of why I am in politics.

“When the gap between the richest and everyone else seems to get bigger and bigger I know something has to be done. It’s not going to be tackled in the five years of a Labour government. It’s a challenge all round the world. President Obama in his State of the Union spoke about this, the global elite are speaking about this in Davos.

“In Northern Ireland you are often at the sharp end of this challenge. Northern Ireland has the highest proportion of people earning below the living wage, higher than any other part of the UK. The Institute for Fiscal Studies says child poverty in Northern Ireland is set to rise.

“The reality is that a Labour government won’t have lots of money to spend. We live in difficult times. We have got to tackle this in new ways, not just with tax and spend. We need to create good jobs in the private sector, with good wages – a race to the top, not a low wage, low skill economy.”

He tried to set himself apart from the Conservatives’ spending plans, repeating his election-campaign accusation that they represent a return to 1930s public spending that would “not only harm the fabric of our society, but also harm productivity due to skills issues,” and said a Labour government would reduce the deficit in three ways:

  1. “Run a successful economy of high wages and higher skills”
  2. “Make fair tax decisions”
  3. “Common-sense reductions in spending”

“Fair” and “common sense” have high political cache because they are slippery terms designed to appeal to everyone. The theory assumes that the vast majority of people consider their own feelings to be fair and their own ideas to be common sense.

Common sense then leads to the fair question: if a statement means something different to everyone, does that statement mean anything at all?

Details, details

As already noted, Northern Ireland politics is largely devolved and Labour don’t stand any candidates here. This makes it difficult for Miliband to go further than ethos and into the mechanics of policy, even if he wants to.

Nevertheless, his appearance was still largely filled with abstractions, punctuated by a couple of more specific ideas – although it is worth reiterating that he is in an impossible position when his party has no local mandate and such matters are devolved.

“A Labour government would raise the minimum wage and deal with the scandal of zero-hour contracts. If you don’t know what you are going to be earning there’s no way you can plan for your family.”

Later he added: “On zero-hours contracts, we say that if you do regular hours you should get a regular contract. There are firms where the majority of people employed are on zero-hours contracts.”

His Q&A with the packed audience at Ulster University largely fell flat because more time was given over to questions being asked than for the Labour leader’s responses.

Another policy crumb that featured was the idea that firms bidding for major government contracts should have to commit to providing apprenticeships – one possible route to transfer the costs of training outside of the stretched public purse.

The UK’s record on vocational education and technical degrees was questioned by Miliband, both in terms of their quality and also their renown, while he said Labour “wants” to raise the statutory minimum wage to over £8-an-hour.

“Young people need to know what qualifications they are aiming for early on. GCSEs and A Levels people know, but it’s much harder to know if you go down a vocational route, and if you don’t know the route you are not going to have a proper career.”

Rather than providing any firm answer to where funding will come to overhaul the local skills base, this simply leads to more questions:

Will businesses want to provide apprenticeships to order? Will they feel in a position to not strongly oppose an increase in minimum wage? Does anyone believe that this could substantially reduce the need for the overhaul of skills and training that Ed Miliband says should be the backbone of our future peace and prosperity?

Amongst general dis-satisfaction with current opportunities in training and jobs, some members of the audience questioned remuneration within existing apprenticeship schemes, insinuating that the poverty wages amounted to an exploitation that provides employers with cut-price labour and leaves apprentices in an unsustainable position. Such situations are probably not what the man who wants to be PM has in mind when talking about expanding training programmes.

And then we are back to the start. The Department of Employment and Learning’s funding was hammered in the recent draft budget, with education providers expressing real fears over future provision.

No-one in the political sphere disagrees about our need to invest in skills – throughout the UK, but especially in Northern Ireland – and so whoever is in power needs to find a way to fund it, and that is likely to mean tough choices and, if a serious effort at change is to be pursued, a combination of substantial reductions elsewhere and some serious ingenuity. Common sense won’t cut it.

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