Select Committee on Work and Pensions Minutes of Evidence

Examination of Witness (Questions 20-31)



  20. Okay. What appears to be the effect of demand and supply side measures that result in jobs growth in areas that currently have low employment rates in some of these states where, for example, there is a problem with low employment growth?
  (Ms Rosewell) The things that seem to work best are the small scale things which overcome some of these network problems that I have been talking about. You have to match the opportunity to the expectation in a way and even if that means that the opportunity looks less good than we might like in an ideal world, nonetheless if that matches more the expectations that people feel that they can meet, I think it is more likely to be successful than if you come along with something which is all singing and all dancing but people do not really believe in. Although it seems slightly weird maybe we have to not lower standards but it is matching expectations of success in order to make something work which you can build on then, I am not sure you can leapfrog the first stages, I think that is really what I am saying.

  21. It is a case of thinking globally and acting locally I suppose is your philosophy.
  (Ms Rosewell) Oh dear, I suppose it is.

  Chairman: I am interested in what you are saying about networks because it must be hard, must it not, for central Government to get a global policy which to a certain extent has to be one size fits all. It is dealing with very different profiles of employment and unemployment rates in different geographical locations. There is some evidence that the way that we capture these through travel to work statistics is not really accurate. How does central Government best promote this network of which you talk? I am absolutely sure you are right that the best way if we had fairy wands as politicians would be if we could create effective networks. A lot of these communities where the really entrenched problems of unemployment lie are deprived and disadvantaged in so many different ways that people defend their own space and do not venture past their own front doors these days unless they have cause to do so. If you were the Minister for Employment how would you try and promote exactly that framework of informal networking that is potentially so successful at getting people into employment opportunities working from an office in Whitehall?

Mrs Humble

  22. Can I just come in on that, Chair? Government has set up the local strategic partnerships, how can they get involved in that sort of networking that you are talking about because on the one hand there is a danger that it would be the same people who have spoken to each other in the past, representatives of the local authority and the great and the good in an area. How can they be better used to actually get down to the level you are talking about and help facilitate that networking?
  (Ms Rosewell) I think less is more. In other words, you cannot do all of it from outside. You have the usual suspects who come in and want to make it different but unless you can generate the bottom up side of it as well, you are ending up again delivering programmes to people rather than delivering programmes for people, perhaps that is the connection. I have no good way of doing this but I think it means you have to find a connection into the individuals who have enough impetus that they can begin to create the on-the-ground networks which are the only ways that this will happen. There are examples where this has worked, and I am thinking not so much in the employment context but in the crime context. In parts of Birmingham, for example, where individuals took the initiative to try and force kerb crawlers off the street and out of their area, it created a whole set of new networks which helped in very significant ways to regenerate that particular community. I do not think that would have happened if people had come in and said to them "You must do this" it happened in that particular instance because of one or two individuals. How you find and give support to those right individuals is a conundrum. I am not qualified to answer this but it seems to me it is the key.

Ms Buck

  23. Is not the other problem with this—and I think there is a lot of evidence to support it—that the people who get jobs in that way leave the communities which are put on the job list. What you have to do then in order to make it work—and I do not know if you have any evidence of where the problem has been cracked—but basically you have to find a way of incentivising people who have the wherewithal to work from within the deprived communities to stay.
  (Ms Rosewell) Exactly. The first thing that you want to do having made some success is to move out and, if you like, build on that success, particularly if you then want something for your children and so on. Again, I am afraid I have no answer to that question and I do not know of anywhere where that particular problem has been cracked, except in the context of essentially strong religious or ethnic groups, and I am not sure that is necessarily the route one would wish to follow.

Rob Marris

  24. Forgive me if I missed this, I do not think I did but you started out spending obviously understandably quite a lot of time on the retail: ten per cent of the economy, 2.6 million employers. I did not hear you mention anything about call centres or the Internet which seems to me potentially to have quite an effect on retail. Now you may think that is because it will not have an effect on that. I would be interested if that is your view?
  (Ms Rosewell) I did mention call centres, though not the Internet, in the context of part of what I would call support services, which are partly call centres, partly technical e-mail and so on. Does this have an impact on retail as such, I am not clear that it does, at least in the sorts of timescales about which we might reasonably think at the margin. In other words, for most purposes most people will still want to see the things that they get. Indeed there is evidence, certainly say from books and CDs that the existence of services on the Net have, if anything, encouraged people to go and do the physical side of it as much if not more than they did before. Certainly there are aspects which are not quite retail like in retail banking for example where there may be some substitution of virtual services for physical services and to some extent we have been seeing that for the last 10 or 20 years in any case with the rise of the telephone services, 15 years at any rate, rationalisation of bank branches and so on. I would distinguish between those services which do not require a physical deliverable and those services which do. I still go to a bookshop, if I am not absolutely sure I want to buy this book, I want to go and have a look at it rather than just buy it from Amazon, for example. I think also there are still huge issues of trust in virtual services so that the people doing well with Internet services in general retail, Tesco for example, are generally those who have considerable bricks and mortar investments as well. These things, therefore, then are not substitutes for one another, you cannot do well with the virtual service unless people have also got the alternative. The real worry for retailers is actually the cost base in all of this in that it is not obvious that there is much rationalisation of the cost structures for a retailer in essentially having to add on almost as a hygiene factor for your services, having a telephone service or an Internet service or a mail order service as well as all the other things that you have to do as well. Obviously it is even more of a concern if you get to the retail banking side of things but equally it is a concern on the physical side of distribution too. The scope for rationalisation may not be that great so all you are doing is putting further pressure on margins for retailers.

  25. Employment might increase then?
  (Ms Rosewell) Yes.

James Purnell

  26. Can I ask a question about older workers. A lot of us are concerned, there is a famous B&Q store which employs only people over 50, is it going to solve the problem of older workers? I think the perceived opinion is that retailers are more inclined to go for younger workers, is that true in practice and is there anything the Government can do or the retail industry can do as an industry, to encourage the recruitment of older workers into retail jobs?
  (Ms Rosewell) I would not say from the evidence that we have seen that retailers have a particularly strong preference directly either way in general. Clearly there are aspects of retail—high fashion for example—where you are trying to match your staff to your customers so if your customers are all 18 to 24 girls then, generally speaking, you want 18 to 24 year old girls to be serving them because they are going to be sharing the same interest and they will able to say if you look fat in that or not. That is why the DIY area is the area which has been most obviously suited to older workers because in general their clientele is in the same age bracket also. I think it depends entirely who is going shopping and there is not a general answer to that question of preferences. What can one do to encourage the employment of older workers? I am not sure that you need to do anything in fact, for several reasons. Firstly, in general the age distribution of the population is moving in that direction and so, if my hypothesis is correct that you want people like the people who are your customers to serve you, if your customers are getting older then so too would workers without needing to do anything as such. Secondly, as a supply/demand balance the issue is the same. So long as older workers have the requisite skills, willingness and everything else, and are willing to come forward then again they will tend to be considered. You are not going to employ a 50 year old man in the shops which are selling the high fashion to kids because that will not happen and, indeed, probably they would not want to do it anyway. Again it comes back to those kinds of issues. I do not think retailers will wish to do anything other than employ people who they think will be able to sell the stuff.


  27. Finally, this might be an impossible question to answer as well, do you believe there are one or two key things that the Government could do at this stage in the economic cycle to try and protect levels of employment in the future in anticipation of an economic decline? If I am your fairy godmother, and let us leave aside National Insurance contributions because that is too easy for you, that is an obvious one, if we take that one away from you, what would be the one or two things that you would really want to concentrate on now to try and protect levels of employment in the economy over the middle term?
  (Ms Rosewell) I would say two different things. On the one hand, I would say, again wearing my retail hat, as it were, that enabling easier investment in retail outlets is one way of helping job creation because this is one of the labour intensive industries, which comes down to things like planning legislation rather than anything to do with employment, so that is one issue. So the ability to start business generally and retail in particular.

  28. Sure.
  (Ms Rosewell) Secondly, really this is too easy as well but I think it is important that the implications of things like Working Time Directives and those sorts of restrictions deter particularly small employers who create many of the jobs that we have seen created over the last four or five years, particularly those sorts of businesses.

  29. You would do that before you would promote more New Deals and all of these things?
  (Ms Rosewell) Yes.

  30. If it was a straight choice between the kind of heavy commitment energy level that central Government has been putting in with some of these supply side employment schemes, you would opt from your perspective for generating small businesses and reducing red tape?
  (Ms Rosewell) Yes.

  31. That has been very, very valuable. Thank you very much for your evidence and your appearance this morning.
  (Ms Rosewell) Thank you.

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