Select Committee on European Union Fifteenth Report



128. The globalisation of markets, industrial change and the unprecedented rate of technological innovation are producing rapid changes in the types of skills that are considered valuable and relevant in the labour markets. The Commission's position is that, as a consequence, an increasing number of people may have to adapt to a change of job or career, involving different skills, during their working life. The Task Force claim that, over the past decade, "the single job for life has become the exception rather than the norm" (op. cit., p 7).

129. However, the evidence from Professor Doogan, of the University of Bristol, suggests that, at the same time, increasing numbers are staying in the same job for longer periods—to a large extent because of increasingly job-specific skills. Professor Doogan pointed out that, contrary to "widespread public perceptions of the 'end of jobs for life'", there has been an increase in what he terms "long-term employment" in the EU, i.e., people have been staying in jobs for longer periods of time, rather than shorter periods.[15] Long-term employment has increased amongst part-timers as well as full-timers, women as well as men. US figures seem to suggest they have substantially shorter average employment durations. (pp 78-79) Indeed, the Task Force reports that "Europeans generally tend not to change jobs frequently: on average in 2000 only 16.4% had been with their employers less than one year (comparable figures suggest around 30% in the USA)" (op. cit., pp 7-8). Professor Doogan's conclusion is there is "little evidence to suggest an increase in [occupational] mobility of labour in the EU in the near future" (p 79).

130. Nonetheless, the CBI stresses the point (made in our introduction, paragraphs 26-34 above) that geographical mobility "is one dimension of labour market flexibility, but it is not sufficient to ensure economic growth and high levels of employment". It goes on to explain that "like a [geographically] mobile workforce, a workforce that has high levels of skill [i.e., occupational] mobility can adapt to labour market shocks more easily, and respond to increasing unemployment in one sector by moving to another" (pp 13-14). Conversely, a low level of occupational mobility constrains the ability to fill job vacancies. Moreover the CBI ranks skills and functional flexibilities (which tend to be inter-related) as amongst "the most important areas" for creating open, flexible labour markets (Q 104).[16]

131. If Professor Doogan's evidence and the observations of the Task Force are correct, and the Commission's belief that an increasing number of people may have to adapt to different skills is prescient, the European Union will require major, innovative policies to increase the level of occupational mobility. To achieve this, the Task Force proposes action in various areas and these are tackled below.

Basic skills

132. The attainment of a knowledge-based society is a key strategic goal of the European Union. Following on from the European Councils in Lisbon and Stockholm, there is a focus in the Commission on improving people's competence in basic skills. These are traditionally conceived of as the 'foundation skills' of reading, writing and mathematics, which are conventionally seen as the basic prerequisites to employability. Such a push is essential to help more people access employment. As the Government explained, "if people cannot read or write adequately, they are not going to be able to compete in the labour market at all, let alone move about" (Q39). The CBI confirmed that, "from a company point of view, if [candidates] do not meet certain minimum levels, they will not get a look in". Yet, disappointingly, they assert that the "UK performance on basic skills is abysmal" (Q 113).

133. The Government counter that, because of the UK's "acknowledged weaknesses", they have put in "a huge amount of work into developing ways of tackling basic skills" (Q40). Whilst recognising that the Government have done much to deal with this issue at primary and secondary school level, the CBI maintains that the Government has done little to address the needs of the older workforce: "Certainly we are starting to address the problems of the education system so that we do not have a problem in the future. But we still have a catch-up exercise to do." They warn that the size of this problem should not be underestimated: in the UK "we have 20 per cent of the workforce who are functionally innumerate or illiterate. That is by far the highest in Europe" (Q 113).[17] The CBI warned that "we cannot just address the skills problems that we have got in the UK overnight; they are very difficult issues that are going to require a lot of time and probably a lot of money" (Q 104). It is clear to the Committee that what the Government termed the "up-skilling of the workforce" (Q39) should now be a priority for the UK.

134. The Committee strongly urges the UK Government to encourage those people without the 'foundation skills' to acquire them through participation in compensatory learning. To achieve this we think that they should follow the Commission's proposal[18] and extend the right to free compulsory education (granted in the Charter of Fundamental Rights) so that it includes free access to 'foundation skills' for all citizens, regardless of age.

135. For those people without basic skills who are out of work, government-funded training in basic skills will give them a better chance of finding employment. This is important for the individuals and will help the productivity of the economy.

136. For those individuals without basic skills who are already in work, the CBI considers the provision of training in basic skills still to be the Government's responsibility: "it is not for employers to teach their workforces to be numerate and literate." The question is when such training should take place. As the CBI points out, employers "are going to want to encourage employees to go and attend numeracy and literacy courses" since training in these 'foundation skills' will enable workers "to make a better contribution in the work place" (Q 113). The CBI proposes that the Government could also introduce tax credits, both to help small and medium enterprises to carry out more training and also to ensure that workers have a right to funding to take up numeracy and literacy qualifications up to Level 2 (that is, the equivalent of five GCSEs at A-C). (Q 113). Because having workers who are competent in basic skills will help employers as well as individuals, the Committee does not feel that such training should always have to be in the employees' own free time, as the CBI seems to propose. The Committee encourages employers to co-operate with the Government to develop innovative schemes and financial incentives that would enable workers to undertake such learning in part during work hours.

137. The 'foundation skills' provide people with what the Task Force calls, "a bedrock of knowledge on which to build succeeding strata of skills throughout their working life and participate actively in society" (op. cit., p 8). Yet these subsequent skills are coming to be seen as more and more fundamental. In particular, changes in technology are increasing the number of 'basic skills' considered to be prerequisite to employment. The Government view ICT skills as essential and say that basic ICT ability is something which "almost everybody now needs to get, even for a fairly simple job in the labour market". (They point out that this is separate from the "higher level ICT skills that would be needed to work specifically in the ICT sector".) The Government also explain that "basic social skills, being able to interact with people, problem solving and so on, are increasingly regarded as essential basic skills if people are going to make it in the work place" (Q 39). This is a result of the Lisbon European Council in spring 2000 that set out a vision of "the new basic skills", which include foreign languages, entrepreneurship and social skills, along with ICT (source).

138. The Committee is glad to hear that the Government "are working together with a number of other Member States on looking at new and innovative ways of tackling basic skills" (Q 40) and trusts that they will continue to focus on this area.

139. The Committee agrees that competencies in information and communication technologies are an integral part of basic skills and welcome the fact that the UK is one of only 8 Member States for whom ICT courses are included in the primary education curriculum. The Committee recognises that there is an issue of subsidiarity here. Yet, although education is a national area of responsibility, the Commission should encourage Member States to promote the teaching and learning of all the basic skills in order to ensure that everyone has equal access to employment opportunities.

Lifelong learning

140. The Task Force views this new set of basic skills as "indispensable" as they provide "a platform for enabling individuals to adapt to changing circumstances during their careers and throughout their lives" (op. cit., p 8). The Task Force criticises the fact that "systems for initial education are still often based on the premise that what is learned in initial education will be sufficient to last a lifetime", they say that this is "a notion which no longer corresponds to reality" (op. cit., p 8). They suggest that the aim should no longer just be to enable individuals to enter the labour markets, but to improve the long-term employability of people by equipping them with the skills necessary to adapt to changing circumstances. Teaching transferable skills and the ability to learn will allow people to take advantage of further opportunities in the labour market. In short, from the Task Force's point of view, the aim should be to enhance people's occupational mobility.

141. The CBI agreed that we "need flexibility in skills, so that we both have a trained workforce but also a workforce that is used to the idea of moving around and having different careers but also using their skills in all sorts of ways" (Q 104). The skill needs of the labour markets are constantly changing. For instance, the Commission predicts that the number of ICT jobs in the EU will grow from the current figure of 10 million to about 13 million in 2003."[19] The Task Force reports that "the estimated number of unfilled vacancies is expected to rise from 2.23 million in 2001 to 3.67 million in 2003. Moreover, the Task Force report states that "80% of today's skills will become obsolete in 10 years, while over that time 80% of the labour force will possess outdated skills without lifelong learning." (op.cit. p 7). There is therefore a need to promote a skilled and adaptable workforce.[20]

142. The Task Force reports that, since mid-1999, "business surveys have increasingly reported production constraints due to shortages of labour". They affirm that it is therefore crucial "to tackle the skill shortages and mismatches which are holding back economic development and therefore job growth" (op. cit., p 10).

143. The witnesses were clear that, in order to increase occupational mobility and fill these skill gaps, the teaching of basic skills has to be coupled with the provision of life-long learning. It is therefore welcome that the Government announced that they are keen to "use, in terms of the labour market, all the resources which are available, whatever the age of people" (Q 51). It is important that people in employment have an opportunity to develop their skills. The Committee urges the Commission to ensure that Member States implement specific proposals and initiatives to address this issue.

144. Member States need to ensure that all people, and not just those leaving formal education, are skilled. The CBI wants to see "career development and progression [open] to all of those employees who have the potential to grow in the group and for the betterment of the group". Developing the skills of those already in the labour market is of fundamental importance. They consider that those who do not recognise this and thereby fail to take account of the potential of the full spectrum of their workforce will be "seriously missing a trick" (Q 61).

145. One of the simple reasons for this is demographics: Europe has an ageing population (Q 165). In response, the European Parliament asserts that "mobility must embrace all age groups" (op. cit., p.7). It will become increasingly important to retain older workers in the work force, or even bring them back from early retirement. As a result, the Government say that it is essential "to encourage active ageing policies which will allow people to stay much longer in the labour market and indeed to remove some of the disincentives to remaining in the labour market" (Q 51). Retaining workers will be particularly important in the future as the European labour force is set to contract (CBI, p 18). Indeed, Professor Schmidt considers that Member States should "think afresh about the issue of the mandatory retirement age and about the typical age to exit the labour market" (Q 170). Lifelong learning will play a crucial role in retaining older workers. The Commission says that "continuing to update skills during working life to respond to the changing needs of the labour market is critical if older workers are to be kept in work longer. […] Change in financial incentives leading to later retirement may be counterproductive if older people do not upgrade to the skills needed".[21] Despite this, the Committee is disappointed to note that the Commission report that "little progress has been made across the European Union in turning lifelong learning into a daily reality for most adults."[22]

146. Another reason to ensure that all people are equipped with basic skills that are recognised and transferable is that as the Task Force explains "the share of women and older workers in the labour force will need to increase very significantly to achieve the full employment targets of the Lisbon strategy" (op. cit., p 6).

147. The Task Force also notes that migrant workers would benefit from specific support "given the significantly higher share of third-country nationals [that is, nationals of countries outside the EU] who belong to the group of unskilled manual workers (35% as compared to 17% for EU citizens) and their concentration in sectors where low-skilled workers are still needed (manufacturing, constructions, hotels and restaurants)" (op. cit., p 11).

148. Therefore the Committee considers it important to retain older workers in the work force and supports the targeting of lifelong learning and training initiatives at older workers, as well as third-country nationals and women.

149. In order to increase occupational mobility the European Union will have to address the fact that occupational mobility is low amongst the low-skilled or unskilled workers in Europe. It is important to enable all people, especially those at the lower end of the labour market, to gain recognition for what they have learnt.

150. Lifelong learning should therefore include the whole spectrum of formal, non-formal and informal learning.[23]

Recognition of informal and non-formal learning

151. When talking about mutual recognition, witnesses were keen that the Commission take into account "not only degrees and diplomas" (Q 133). The Commission acknowledges that the recognition of informal training "is extremely important in career development" and was keen for "the validation of qualifications" that arise from such work (Q 213). Skills and knowledge gained at work or in other non-formal environments outside formal education and training need to be demonstrable in order to encourage the least mobile to become more so. This would enable people, and it largely affects women but also the self-employed, to turn into a credential work done, for example, in the voluntary sector, or in the community, perhaps even in the home.

152. The mutual recognition of such qualifications is important, as it would allow people to enter additional training at an appropriate level in a Member State other than that in which they acquired their basic training. This would permit people to enhance their skills wherever they are, wherever they come from, whatever stage they are at.

153. One important current difficulty is that the different forms of learning are not linked, so currently there is only a weak link between formal education and what is learnt in economic and professional life (non-formal learning). Eurocadres believe that "in the future this link should be made more important". They say that "there is a need for this link" (Q 144).

154. Eurocadres called for an open "reference system" based on "accredited criteria" that could be gained from activities across the spectrum of learning. Key for those groups who are currently least mobile (especially older workers, women, and low-skilled workers) will be the "recognition of professional experience". Eurocadres also support establishing a system that attempts to recognise "non­formal qualifications". The credits will not (necessarily) be for the purpose of continuing studies, but will enable people to have the experience they have gained (academic, professional or otherwise) recognised in professional life. Systems recognising professional experience do exist across Europe, but they are not well known and are not very often used (QQ 133, 139, 144, 146).

155. Indeed, the Commission's Communication "Making a European Area of Lifelong Learning a Reality" (COM (2001) 678 final) makes clear that massive progress remains to be made in developing an EU-wide system of lifelong learning. The Communication states that it is important to value all forms of learning; the Commission hopes that learning of all types can be identified, assessed and recognised. However, the Task Force concedes that there are "few tried and tested means of assessing and validating such skills; this constitutes an important barrier to occupational mobility" (op. cit., p 11). The Committee welcomes the additional staff working paper on working practices and indicators (SEC (2001) 1939) as a tool for the dissemination of good practice and calls on Member States to follow the example of the models provided therein.

156. The Committee is also in favour of the Commission developing an over­arching transparent framework for the assessment and recognition of non-formal and informal learning. Since this affects a wide range of interests, it will be important to involve both the traditional social partners of employers and trade unions and the various non-governmental organisations and pressure groups with interests in this area.

15   Other research also suggests that the job for life only ever applied to a very small percentage of the labour force (cf. Meadows, The Flexible labour market: Implications for pension provision (NAPF: 1999). Back

16   For a detailed explanation of this position, see the CBI's report Creating a Europe that works: A study of labour market flexibility (CBI: 1999). Back

17   In 1999, the working group chaired by Sir Claus Moser found that in the UK "roughly 20 % of adults-that is perhaps as many as 7 million people-have more or less severe problems with basic skills, in particular with what is generally called 'functional literacy' and 'functional numeracy': 'the ability to read, write and speak in English, and to use mathematics at a level necessary to function at work and in society in general'" (Improving Literacy and Numeracy: A fresh start, p 3). Back

18   COM (2001) 678 final, p 23. Back

19   COM (2001) 116 final, p 7. Back

20   The Commission Communication on lifelong learning defines "adaptability" in this context as the capacity to adapt to new technologies, new market conditions and new work patterns (COM(2001)678 final, p. 31). Back

21   COM (2002) 9 final, pp.11-12. Back

22   COM (2002) 14 final, p.10. Back

23   The Commission defines 'Formal learning' as "learning typically provided by an education or training institution, structured (in terms of learning objectives, learning time or learning support) and leading to certification". It defines 'non-formal' learning as that which is "not provided by an education or training institution and typically does not lead to certification. It is, however, structured". It defines 'informal learning' as resulting from "daily life activities related to work, family or leisure, it is not structured and typically does not lead to certification". The Commission further note that whilst "formal and non-formal learning are intentional from the learner's perspective, informal learning is, in most cases, non-intentional (or 'incidental'/random)" (COM(2001)678, pp. 32-33). Back

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