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UK – Miliband tilts at insecure labour market

23 September 2013

In his annual party conference speech, opposition leader Ed Miliband outlined his plans for the Labour Party’s bid to win the 2015 general election and took the opportunity to address the UK’s ‘insecure’ labour market and falling living standards.

Labour proposed an immigration bill that would require large firms to take on apprentices every time they want to recruit an employee from outside of the European Union. Described as the ‘one in and one trained up’ policy, officials claim that the policy will create 125,000 new ‘gold standard’ apprentices over the course of the next parliament.

Speaking at the conference, Mr Miliband said: “In our first year in office we will legislate for an immigration bill which has secure control of our borders, crack down on exploitation of workers coming here undercutting workers already here, and says to big companies that bring in people from outside the EU that they can do that, with a cap, but they’ve got to train the next generation.”

The proposal in part stems from a review published today from Labour’s vocational skills taskforce, undertaken by Chris Husbands, director of the Institute for Education. The review found that 57% of the increase in apprenticeships since 2010 has been in low-quality courses that would not be recognised as apprenticeships in other countries.

One in five apprenticeships last for less than six months, and 20% of apprentices report receiving no training at all. A total of 70% of apprentices are not new job entrants but existing employees. This represents an increase from 48% in 2007. Almost all (94%) of the ‘new’ apprentices are over the age of 25.     

The Guardian newspaper pointed out a flaw in Labour’s plans, namely that the EU would prevent the apprenticeships from being specifically targeted at British youth. The scheme would have to be open to all EU nations.

The Guardian has also been quick to point out inherent flaws in Mr Miliband’s minimum wage proposal. Ed Miliband said that he will strengthen the enforcement of the minimum wage by increasing the fines to employers failing to pay the correct wage from £5,000 to £50,000 and consider he introduction of minimum wage bands by sector.

It is estimated that 287,000 workers are paid below the minimum wage and that very few firms are prosecuted for paying less than the statutory minimum wage. Councils are to be given greater enforcement roles by the government, enabling them to tackle employers that fail to pay the statutory minimum. The Guardian, however, is critical of the policy claiming that Councils will need new resources to police the minimum wage. Other critics have argued that varying it by employment sector is impractical.

John Cridland, Director-General of the confederation of British Industry, stated: “A sectoral approach to setting the minimum wage would be unworkable and hit smallest companies the hardest. It’s based on a completely false premise that all companies working in the same sector operate on the same margins. The staff of a small IT start-up might chose to forego higher wages to help get the business off the ground, surviving on wafer-thin margins. Sectoral minimum wages would favour incumbents over challengers.”

“As a stepping stone into work, a minimum wage job is a good starting point, but it’s through on-the-job training and experience that people will progress to higher-paid roles. It is absolutely right that any company that knowingly fails to pay the minimum wage should feel the full force of the law,” he continued. 


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