Mary Senior summaries the recommendations of the influential new report on economic justice
Established in the wake of the EU referendum, the Institute for Public Policy Research (IPPR) Commission on Economic Justice is a landmark initiative to rethink economic policy for post-Brexit Britain. Commission members came from all walks of life, different political view points, and brought perspectives from across Britain. Its plan for the new economy was published in September 2018.
The conclusion that the economy in Britain is not working is hardly a surprise to unions. Representing workers at the sharp end – facing casual contracts, declining pay, bogus self-employment, and a growing gap between rich and poor – we see the casualties of our economy on a daily basis. The Commission demonstrated the state of economic injustice in Britain, with average earnings stagnating for more than a decade, even while economic growth has occurred. Nearly a million people in Britain are on zero hours contracts, young people are set to be poorer than their parents, and the nations and regions of Britain are diverging further.
The Commission is clear that we need a new deal, a fundamental reform of the economy, a change as significant as the Attlee government’s Keynesian reforms of the 1940s and the Thatcher government’s neo-liberal free market reforms. But this time we need change that builds fairness and equity into the economy. We’ve described it as ‘hard-wiring’ economic justice into the way the economy works to create a more equal economy that generates stronger growth, lower social costs and greater wellbeing.
There is no silver bullet to tackle the injustices and inequality in our economy for we need to address this in the structures of our economic system. This includes in the labour market and wage bargaining; in the ownership of capital and wealth; and in the governance of firms – giving workers a voice on boards, and restricting voting rights of temporary shareholders, so those wielding power are committed for the long term.
Building on Scotland’s Fair Work agenda, the Commission sets out a plan for good pay, good lives and a ‘good jobs standard’, where good work enables individuals and their families to contribute to society. We need a pay rise, and the National Living Wage should be raised to the level of the voluntary Living Wage, which meets the cost of a decent standard of living. To help increase wages more widely, the Commission proposes a doubling of collective bargaining coverage to 50% of workers by 2030, with a focus on the lowest paid sectors. Unions are key to making a difference, and we know that organised work places are healthier and safer, and have higher pay rates. The Commission proposes introducing union auto-enrolment in the gig economy, to help provide isolated workers the opportunity to organise together.
Everyone in work should be entitled to rights and protections, and the Commission calls for stronger employment rights for people in insecure work, and the extension of work-related benefits to the self-employed. The law on employment status and rights must be clarified and backed up by properly funded, proactive enforcement to crack down on employers who are flouting their legal responsibilities.
To shine a light on inequality in the workplace, the Commission calls for greater transparency on pay, and all firms with more than 250 employees should be required to publish their pay scales. We’ve seen how gender pay gap reporting has drawn attention to women’s pay, but this should now go further to people of different ethnicities.
To rethink how we balance work and family and other aspects of our lives, the Commission calls for jobs to be advertised as flexible by default, for ‘use-it-or-lose-it’ parental leave to enable and encourage men to take part in raising children, and for more bank holidays so that economic growth is not just shared financially, but in the form of time for life outside work.
The Commission’s recommendations include a ‘managed automation’ strategy to support the adoption of new technologies, but also importantly to ensure that workers don’t lose out, share in the productivity gains, and are helped to retrain. There’s also a call to rethink the immigration system to promote human dignity, prosperity and justice, and to give Scotland and the other devolved nations more control over our immigration rules. This will allow us to tailor immigration rules to suit Scotland’s economic needs, where we benefit from overseas labour in industry and our public services – including the NHS and universities.
We can’t just muddle on hoping for the best. The Commission is very clear that as we confront the challenges of globalisation, technological, democratic and environmental change, on top of Brexit uncertainty, doing nothing will not keep things the same – it will only make it worse. Fundamental reform can be achieved, and the Commission’s proposals would place more power with workers, provide Scotland and all regions of Britain with more economic levers for change, widen opportunity and ensure we all benefit more fairly from economic growth and prosperity.
Mary Senior is Scotland Official of the University and College Union (UCU) and a member of the IPPR Commission on Economic Justice (see www.ippr.org/cej).