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  1. Science & Tech
14 March 2017

Angela Eagle on Governing the Digital Economy

By Angela Eagle

The Labour Party has been at the heart of the struggle to bring social justice and fairness to our economy and society since its inception. For over a century we have addressed problems in our economy by bringing to bear the experience and insight from our roots in organised labour and the pragmatic democratic socialism that unites our broad church.

Our economy today is undergoing fundamental changes, as technology transforms the way we work in profound ways. Automation and changes in the nature of the workplace, such as the rise of atomised virtual workplaces and platforms for exchanging labour, bring about new challenges for social democracy on an organisational and political front. However, the changes we are seeing today are nothing new.  The emergence of the Labour Party itself was a response to a radical reshaping of technology, work and workplaces in the Industrial Revolution.

We have had to deal with change before and we will do so again. And there are historical precedents in the changes that are happening. Quite often I look at Uber and see similar activity, tools of production, distributions of labour and organisational challenges to a time before the invention of the spinning jenny, when cotton was spun in living rooms around the country by a similarly geographically-atomised workforce. The truth is it’s far easier for us now to manage the challenges of such working patterns given modern communications technology.

So to what extent is our economy changing? The truth is that the scale of the disruption, especially by automation, is hotly contested. In 2013 Frey and Osborne produced research arguing that 47% of jobs in the US will be threatened by automation over the next two decades. A more conservative estimate from the OECD puts the figure at around 9%. But whatever data we rely on, there is no doubt that the threat is real, and that the repercussions for our workplaces and communities will be considerable.

The jobs at most immediate risk from automation are routine ones in the service and manufacturing sector. It is these middle tier jobs which are already disappearing, while we witness a growth in well-paid professions at the top and poorly-paid, menial work at the bottom. This phenomenon of ‘hollowing out’, or the ‘hourglass economy’, has contributed to the unacceptable levels of inequality we see in Britain today, levels that will likely be exacerbated  if disruption continues and the Government accepts no role in mitigating the rise of inequality.

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It would be a mistake to view automation solely as a threat: historically technological change has boosted jobs and living standards, as new forms of employment have emerged to replace old ones. Indeed automation could do much to improve the UK’s woeful productivity levels. But politicians and governments cannot afford to sit back and leave this to chance, blindly hoping that the market’s invisible hand will deliver a fair society. 

A recent White Paper from the German Government contained a raft of innovative policy suggestions on how the state might support workers in the future. It included setting up ‘personal work accounts’ to provide young workers with initial capital for skills enhancement or starting their own business, an Act on ‘working time choice’ giving workers greater choice over working hours and ‘time sovereignty’, and measures to ensure that self-employed workers have the same access to statutory pension schemes as everyone else.

One reason the German White Paper feels so refreshing is its recognition of workers not simply as productive robots, but as citizens with a stake in society. It contains an implicit understanding that work must be invested with meaning and instill a sense of identity, something which this country’s machine-like narrative of ‘hard-working people’ neglects. Crucially there a recognition that the workplace thrives in tandem with the social security system, rather than in opposition to it as our own government often seems to believe.

In the UK there also needs to be a reconfiguration of the relationship between work and social security. The system designed by Beveridge was grounded in models of employment and family life that have transformed beyond recognition. Much as it is tempting to be nostalgic for the employment frameworks of the past, we need to recognize that the world has changed, and instead to think creatively in applying our values to a modern setting.

There is no sign that the Conservative Government has the will to do this. I have been surprised by the eagerness of many voices in the media to take Theresa May’s rhetoric of social reform and state intervention at face value. In reality there is no indication that this administration will be any more interventionist than the previous one, no sense that the state will be used as a lever to iron out growing inequalities. While the Government’s commitment to an ‘industrial strategy’ is welcome, there is little to suggest that it will contain the radical measures needed to address the challenges posed by automation and systemic insecurity in the workplace. 

The current direction of travel – with rising levels of inequality and an almost normalised state of insecurity at work – is simply incompatible with the aims and values of social democratic movements. The increasingly atomised nature of the workplace has destabilised the idea of work as a collaborative endeavour, something which has historically underpinned the labour and trade union movements, and the communities that were intertwined with them. The urge to reverse these trends transcends the confines of the workplace. It relates to what sort of society and country we want to be, how we build communities that citizens feel a gravitational pull towards. These are monumental challenges, and the success of social democratic parties in the twenty-first century will hinge on our ability to come up with solutions.

In January, Hewlett Packard Enterprise and the New Statesman convened a discussion on this topic with parliamentarians from each of the three main political parties and other experts.  This article is one of a series from three of the MPs who took part, with an introduction from introduction from James Johns of HPE.  Next week will be Conservative MP, Matt Warman’s take on how he responds to the challenges of governing the digital economy.