When Miatta Fahnbulleh became chief executive of the green and left-leaning New Economics Foundation (NEF), she was one of the first black women to head a UK think tank. “I was like: ‘Oh gosh. OK – well, there you go, there’s an accolade!’” she says. The economist had come to the UK from Liberia with her family as a child, then progressed through Oxford University and into the civil service, before becoming an adviser to the Labour opposition and moving from there to the Institute of Public Policy Research and then on to the NEF. “I’ve been in the policy world for a long time – which is still middle class, white and male-dominated,” she says. While the situation is improving on gender, Fahnbulleh notes that “even today, you still have to fight to get an equal hearing”.
“The economy doesn’t work for people and planet and you fundamentally need to think about how you transform it in order to do that,” Fahnbulleh says, articulating the view the NEF has been pushing since its creation in 1986 during an era of Thatcherite economic policy under Nigel Lawson. Through the New Labour years, coalition government, and into the populist present, the think tank has often ploughed a lonely field of green progressivism, but with the climate crisis, unprecedented government intervention to tackle the Covid-19 pandemic, and the breakdown of the global neoliberal order, the “outlier” ideas associated with the NEF have propagated and become a staple part of the debate. Fahnbulleh points to both Theresa May’s emphasis on an economy that “works for everyone” and Labour’s 2017 manifesto For the Many, Not the Few as examples of how the politics has shifted on the economy. “I think all parts of the [political] spectrum are having to do different things to respond to the moment that we’re in,” she says.
“If I think about the next year, it will be punctuated by a cost-of-living crisis,” Fahnbulleh explains. A decade of squeezed wages and rising prices for core goods are driving the crisis in the short term, but, she points out, these have their roots in longer-term structural issues, one of which is how the labour market is working in the UK – pre-pandemic it was defined by job creation, but few jobs paid a decent wage allowing people to live a good quality of life, she says.
“The system has not been very good at identifying people that could be skilled up – skilling them up and then matching them with jobs that have been created,” Fahnbulleh adds. Part of the reason for this is the UK’s underinvestment in skills, both in the public sector and the private sector, compared with other OECD and European countries, she explains. On top of this, Fahnbulleh says the market for providing skills and training is fragmented and decision-making is too concentrated in the hands of Westminster. Instead, she would like to see a skills system that is “agile” and able to respond to the “needs of the here and now”.
This is an important plank for Fahnbulleh and the NEF’s plans to create a greener economy. Some parts of the economy will contract, and others disappear, as the UK moves towards net-zero emissions, and the workers and communities connected to those parts will need a plan to transition to new jobs and sectors. “Social change and disruption, if it’s not done well, is bad for people, it’s bad for communities, it’s bad for society,” says Fahnbulleh. She points to the devastating impact of the move away from coal mining in northern England in the 1980s – something that is still vexing policymakers as they seek to “level up” these same communities 40 years on. The move to net zero needs to ensure these patterns are not repeated and regional and social inequality is actively addressed so that the new jobs in the green economy are decent, secure and well-paid. “If we want the job markets and a low-carbon economy to look better, and to pay people better, I don’t think it happens ad hoc or by accident. I think it has to be deliberate,” she says.
The NEF’s solution to this problem of how to train and retrain workers as the economy rapidly changes and transitions to net zero is a part work/ part train scheme. It takes its inspiration from countries such as Germany, which have managed their economic transformations with relatively less pain and retained an industrial base in their economies. Workers in sectors in decline or transition continue to work part-time while retraining part-time, both staying in the labour market and learning the skills for the new jobs being created in the economy. This would be backed by government support, guaranteeing pay up to 80 per cent (as with the furlough scheme) for time in training, while employers keep people on for at least 40 per cent of their usual hours and continue to meet National Insurance and pension payments.
Pre-pandemic, just 6 per cent of workers were upskilling towards a new job, and this figure was even lower in sectors such as retail and hospitality, which have been most affected by the pandemic. The NEF’s Upskilling Britain for a High-Wage Future report called the furlough period a “huge, missed opportunity to reinvigorate the UK’s skills base”, noting that while some workers did engage in training and upskilling during this time, this was mostly as a result of them using their initiative.
Fahnbulleh argues that the UK could implement such a work-training scheme now to deal with the impact of the pandemic on parts of the economy. “As we transition out of this phase of the pandemic, we know there are still going to be sectors of the economy that are going to be really hammered,” she says. “What do you do with those workers? Do you just leave them and hope they can find their way in the jobs market? History tells us that’s not right.”
Government, Fahnbulleh insists, has to play a “deliberate” role in the skills market and in transitioning the economy, but from her years in the civil service she is under no illusions about the difficulties of being in government. “There are two challenges every government faces,” she says: the first is the strength of the Treasury and its resistance to investment; the second is the fragmented and siloed nature of government in the UK.
Skills policy interacts at a minimum with the Treasury, the Department for Business, Energy and Industrial Strategy, and the Department for Education, and on top of that it will impact on the Department for Work and Pensions, she says. These are departments that still work in silos and are not necessarily thinking about these types of skills outcomes and how to work across boundaries. Meanwhile, outside of the challenges of coordinating central government departments and getting them to agree is another whole set of challenges in implementing skills policy. Here is where the schools, further and higher education systems and an array of local governments all come into play. “So your ability to say this is an objective and drive it through that system is a massive challenge,” Fahnbulleh says. The situation with this “weak”, “reactive” and “chaotic” government is particularly acute, she adds.
When asked what she would do differently if she found herself in No 11 for a week, Fahnbulleh reels off a mini manifesto comprising “a green new deal”, investment in “quick wins” such as technology and upgrading the UK’s ageing housing stock, the funnelling of more money to local government through combined authorities, and a part-work/ part-training scheme to transition workers into a climate-proof economy.
“We need to act today, in order to have any chance that, in ten years, we’ve started to shift the dial on [climate change],” Fahnbulleh warns, acknowledging that pushing the politics in this area is “a really hard thing”. She points to “collective cognitive dissonance” around the Cop26 negotiations, and the lack of urgency and priority given to climate change and the transition to a green economy. You’re either going to put it as a thing we tackle deliberately, she says, or you’re going to have “a version of the pandemic times ten, when we are just throwing billions at our problem in order to dig ourselves out of the hole.”