My Lords, I too thank my noble friend Lord Leigh of Hurley for raising this important issue. It seems to be one of those issues which brings out both the best and some of the less attractive aspects of our British culture today: the best being a certain modesty and reserve in promoting what are good numbers; the less attractive being a reluctance to even report what is basically good news because it does not seem to sell newspapers, and a relentless pursuit of the tree in a wood on which you can notch a negative point. I am going to try and contradict myself on both counts, slightly overpromote the numbers and perhaps find one tree at the end I would like to put quite a large notch on.
In his opening speech, my noble friend Lord Leigh did not refer to what we inherited. In May 2010, when David Cameron stepped into No. 10, unemployment was, at 8%, just over 2.5 million. Things were so bad that John Philpott of the Chartered Institute of Personnel and Development, said:
“The big task for the government is trying to stimulate growth whilst also cutting the deficit. … There’s nothing to suggest that we’re going to get a return to anything approaching full employment anytime soon”.
How cruel hindsight can be, and how unwise forecasting like that can be. As my noble friend Lord Leigh has said, now we have unemployment at 3.8%, with 1.3 million unemployed. Both numbers are almost exactly half what we inherited in 2010. Unemployment for men is at its lowest since 1975, and for women, at 3.7%, is the lowest since records began in 1971.
The most remarkable statistic of all, which I do not think has been mentioned yet today, is that, since 2010, 3.6 million extra jobs in aggregate have been created over and above where we were in 2010, and so we are at 32.7 million people in work, as we speak. It is a remarkable number and testament to the effectiveness of government policy in a period of very difficult economic circumstance that started in 2010. They are truly extraordinary numbers. They evidence the Conservative belief in what Iain Duncan Smith called “the dignity of work”.
For the first time in my life, I almost feel sorry for the Labour Party. Labour is the party whose Government have never left office with unemployment lower than when they came into office. Perhaps we should both rebrand? Both parties seem in a bit of turmoil at the moment. Perhaps Labour can become “the Labourless Party”, and this side can become “the Working Class Party”.
Others will no doubt talk about the stubbornly recurring issues of poor productivity—the noble Lord, Lord Haskel, has already done so—and slow real wage growth. I will say only that, while wages are now rising at a faster rate than inflation, and in particular the minimum wage is rising considerably ahead of inflation, there is still a lot of work to do to improve the hardship of those who work hard but earn less than 60% of the adjusted median income per household.
But this is not just a numbers game. For the United Kingdom to flourish and prosper harmoniously, employers have to get a lot better at providing emotionally satisfying work. They have to offer variety, not permanent routine, as well as offering flexibility, training, mentoring and physical and mental health support at work. They need to give employees a route to progress as an individual and good reasons to have ambition to improve themselves and receive pay which creates some feeling of satisfaction rather than envy. Get those right and you create a vibrant 21st-century model for capitalism with true pride in, and dignity of, work. The Taylor review highlighted many of these features in its report in July 2017, and the Government were right to accept the vast majority of the recommendations.
Western capitalism faces a technology-led inflection point. We have to seek, and find, a way of narrowing the divide, which is at present increasing, between flat-lining, low-paid and often poorly skilled hard-working people and the premier league. Whether we like it or not, we need to achieve a better economic balance within what I describe as the working class—by which I mean everyone in gainful employment, from the FTSE 100 chief executive to poorly paid service workers. The huge upsurge of entrepreneurialism in the UK, which has been the main driver behind the success in creating jobs, has in my opinion been a triumph of economic policy since 2010. I love reading about hard-working risk-takers staking all and making fortunes through their own hard work and ambition, and their ownership of that most capricious class of risk capital—equity.
However, to echo comments made by my noble friend Lady Fall and the noble Lord, Lord Monks, senior business leaders must set the example for rebalancing the divide that I refer to—this is why I am putting a notch on the tree. They need to grasp the dangers of increasing social division through the relentless and excessive chasing-up of senior executive pay in major established companies. Leaders in these companies are, in most cases, highly competent and ethical stewards of capitalism, but they should not fool themselves that they thereby are the creative risk-takers who have a right to enormous rewards whether or not they succeed. The dining rooms of commerce are, believe me, full of concerned, even nervous, discussion on this point. We know that there is an international problem, but we cannot quite muster the courage to face up to it and, in any event, unenlightened self-interest gets in the way. Business must grapple with this as a matter of urgency, failing which it may find the issue being taken out of its hands.