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Government must act now to avoid exclusions from future world of work, MPs say

29 June 2021

  • DWP lacks long-term plan to support people to adapt to changes in labour market
  • New workplace technologies risk exacerbating existing inequalities
  • Employment Bill needed to boost job protection in gig economy

Technological changes in the workplace risk having an uneven impact on different groups of workers and the Government must be more proactive in planning ahead to avoid people being excluded from jobs and worker protections, MPs say today.

In its report published today, the Work and Pensions Committee calls on the Government to develop a comprehensive long-term strategy on how it will prepare for changes in the world of work brought about by the Fourth Industrial Revolution.

While the Committee concludes that it is not likely that new technology will lead to mass unemployment, it warns that the creation of new jobs and loss of others will be uneven across sectors and across different groups of workers.

The Government must ensure that any changes do not exacerbate existing inequalities, with younger people, disabled people, women, and people from some ethnic minorities particularly at risk of missing out on jobs.

Greater focus should be placed on retraining and reskilling and the Government’s two major employment support schemes, Kickstart and Restart – introduced to get people back to work after the pandemic – must do more to meet the needs of disabled people.

The report also again calls for the Government to bring forward its Employment Bill to protect the rising number of people in precarious forms of work, such as people on zero-hours contracts or working in the gig economy.

The Committee also heard how the coronavirus pandemic has likely accelerated the take up of new technology in the workplace, changed working practices and had an uneven impact on job losses in different sectors of the economy.

Chair's comment

Rt Hon Stephen Timms MP, Chair of the Work and Pensions Committee, said:

“Deep-seated trends were already driving labour market inequalities. The pandemic has hit fast forward on them. As we emerge, automation and new technologies will continue to transform both how people work and the skills they need to succeed. The Government needs to plan now, to avoid large groups – younger workers, women, disabled people and those from some ethnic backgrounds – being left behind.

Digital dexterity is going to be vital to every worker navigating the rapidly changing world of work, but a digital skills shortage is looming unless the DWP adopts a laser-like focus on helping people get the right training they need for every stage of their career. Those who have lost their jobs during the pandemic need particular support to get back on their feet, so the Government must make sure that its new employment schemes are reaching the right people, with specific help for disabled people.

With the gig economy booming and more and more people employed in precarious jobs, better worker protections are now well overdue. The time for the Government’s long-promised Employment Bill is now, so all workers have the legal status they deserve and access to skills training provided by employers.

The economic shock of the pandemic should act as a warning sign as to how quickly the world of work can change. Time is not on the Government’s side. The DWP needs to act now to make sure every worker has the skills and job protections they need to thrive.”

Main findings and recommendations

A long term plan

  • DWP has not been proactive enough in planning for long-term changes in the world of work.
  • Working with other departments, the DWP should develop a strategy on how to respond to the impact of new technology on the number of jobs, the skills needed and the differential impact the changes could have on sectors, regions and demographic groups.

Employment Bill and worker protections

  • New technology has the potential to enhance employees’ experience of work; for example, by allowing for greater use of remote working and replacing more mundane tasks. However, there is also a risk that technology could have an adverse impact on workers’ rights and wellbeing.
  • Given the significant changes in the employment market over the last decade, the Committee believes it is imperative that the definition of employment is updated and clarified to ensure that workers enjoy the legal status that they are entitled to. This is not only key in protecting workers in times of change but also in ensuring access to skills training provided by or in conjunction with employers. 
  • The Committee reiterates its call from June last year for the Government to urgently bring forward an Employment Bill to enhance the rights of workers in the low-paid and gig economy.

Uneven impact on different groups

  • Automation has the potential to exacerbate existing inequalities in the labour market.
  • The already unacceptably high employment gap between White and BAME workers could widen, with some research suggesting that people from some ethnic minority backgrounds are more likely to work in sectors with jobs at higher risk of automation than other groups.
  • Automation may also have a differential impact on men and women. Women are still underrepresented in STEM fields, which are likely to see rising demand for workers. Women are also more likely to work part-time, with part-time work more common in low paid jobs, which are more likely to be lost to automation.
  • The Government should establish a new publicly funded advisory body to advise on the potential impact of changes in the world of work on different groups in the labour market.
  • The Government should ensure both that assistive technology is available and digital skills training is accessible and inclusive to ensure disabled people are properly supported in the workplace.

Retraining and skills

  • The UK is facing a significant digital skills shortage, and demand for new skills will only rise as the labour market changes. DWP must continue to work closely with the Department for Education to ensure that its skills programmes reflect the changing needs of employers and demands of the labour market.
  • DWP should ensure its digital skills offer is aimed not just a people in the early stages of their career, but also at older workers who may want or need to retrain.
  • The Committee welcomes the announcement of the Government’s two new employment schemes, Restart and Kickstart, but DWP must ensure that both schemes meet the needs of groups who are particularly likely to have lost out during the pandemic – including young people, women, low-paid workers and those from BAME backgrounds. The report also notes that there is no specific provision for disabled people.

Universal Basic Income

  • The Committee concluded that while it was vital for people who find themselves out of work to have access to a robust safety net, a Universal Basic Income would be extremely expensive and not target support at people who need it the most.
  • The DWP should instead focus its efforts on ensuring that the value of benefit payments under the current system meets the basic needs of claimants.

Further information

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