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Brexit looks like a lost opportunity for skills policy

by Michael Prest | 31.05.2017

When questioned on Monday evening’s TV non-debate about their stance on immigration, Jeremy Corbyn and Theresa May both said that improving the skills of UK workers was central to offset the likely economic damage of fewer immigrants coming to the UK to work.

It’s good that they – and especially May – acknowledged that restricting immigration from the EU will probably be harmful. It’s bad that neither seems to understand that we need greater numbers of workers as well as better trained ones – and also that a long-term skills strategy, built on a national consensus among workers, employers and government is long overdue.

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Demography is destiny. An ageing UK population means that over the coming decades the size of the working age population will shrink relative to the size of the retired population. That is not a recipe for economic success. It’s hard enough to raise the UK’s poor productivity without also having to make up for a shortage in numbers of workers. Significantly, the SNP says Scotland needs more immigrants not fewer.

So May’s policy of restricting immigration to the “tens of thousands” – regardless of her dismal record in achieving this target first announced in 2010 – is particularly dangerous for the UK economy.  But Corbyn’s “managed migration” is not necessarily much better.  Managed migration appears to mean letting in workers the country is judged to need. But that makes no sense if it’s not part of an overall skills strategy. And it begs a lot of questions.

What “skills” exactly? Who decides who acquires what skills? Why does the skills debate usually exclude management – possibly the UK’s greatest skills weakness? What conditions make it possible to raise the right skills of the right people at the right time? How is a skills strategy to be funded? How many workers does it target?

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Unfortunately, such questions have bedeviled UK policy from the nineteenth century on.  The historical failure of UK skills policy-making has been a lack of the basic conditions for skills development: continuity of policy over the long term, underpinned by adequate investment and a broad consensus between political, business and labour leaders. The policy contrast with many other European countries which enjoy higher productivity than the UK, notably Germany, is stark.

Since in the end this is public policy, government is the decisive actor.  Government can help to steer skills development in an entrepreneurial way, anticipating where future economic growth will come from – say green technology – and then brokering consensus around the skills needed, and how they can be developed or acquired. Hidden behind the rhetoric of party politics, this kind of thinking is gaining ground.

But the adversarial nature of UK politics, a reluctance by government and business to invest properly in skills development, and years of distrust between organized labour and business still militate against joined-up thinking making much progress.

Brexit is a compelling reason – and also an opportunity – to overcome this doleful legacy and put UK skills strategy on a sustainable footing. Regrettably the signs are that the bus will be missed yet again.

Edited by Geert Linnebank