04 June 2013

S4M-06782 Underemployment

The Deputy Presiding Officer (John Scott): The next item of business is a debate on motion S4M-06782, in the name of Murdo Fraser, on behalf of the Economy, Energy and Tourism Committee, on underemployment in Scotland.

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Stewart Stevenson (Banffshire and Buchan Coast) (SNP):

I am not a member of the Economy, Energy and Tourism Committee, so it is my delight to say words that are so seldom heard in this Parliament: “Congratulations to Murdo Fraser.” I congratulate him and the other members of his committee on an interesting and engaging report. It raises more questions than it gives answers. At this stage of the consideration of the subject, that is not too surprising.

Today is my last day as the deputy convener of the Subordinate Legislation Committee—indeed, it is the last day of the Subordinate Legislation Committee, but we rise, phoenix-like tomorrow as the delegated powers and law reform committee, and I will be suitably translated into my new position as its deputy convener. Now John Mason knows at least what ex-ministers are equipped to do, since I make no claim to be underemployed or underskilled for the job that I have.

The Economy, Energy and Tourism Committee gave the game away with regard to the complexity of the subject that is before us when it found it necessary to spend an entire A4 page discussing what it means by underemployment. It took a good shot at the issue, but I think that the committee would agree that we probably have not nailed that down firmly, because we are not absolutely clear about what underemployment is.

We basically rely on statistics that are gathered by asking individuals for their view of their own situation, and different people will view their own situation differently. In the first job that I had when I left school in 1964, when I was employed as a nurse before I went to university, I worked 108-hour fortnights—12 days on, two days off. If I were to use that as a test, almost anything would look like underemployment. The statistics will, therefore, likely include imprecision.

Notwithstanding that point, it is relatively clear that there is significant underemployment. Kezia Dugdale gave the game away by suggesting that underemployment was significant in 2008, and it is true that, in the UK, probably 2 million people were underemployed at that point. Of course, she said that that had nothing to do with the fact that Labour had been in power for 11 years. She might be right in saying that, because, of course, the statistics do not go far enough back to justify a robust conclusion. However, the numbers are going up, so it is right that we consider the matter.

The committee has asked the Scottish Government to improve the quality of statistics and to consider how labour market statistics can be adapted to take account of developing trends and, in particular, underemployment. That request is equally applicable to the UK Government. The Office for National Statistics serves both Governments. Perhaps it should therefore be asked to do some work on how we can better understand the nature and the quantum of underemployment.

We know that employment is rising. For 16 to 64-year-olds—which excludes me and, indeed, Mr Brodie, who is chuckling in the margins—we are now up to 71.8 per cent employment. Nonetheless, whenever people want to work and cannot work, that is an issue that we properly engage with. Many have referred to the fact that women are disproportionately affected. That, too, is important for us to consider.

The trends are probably reasonably informative, but even they are not robust. Laurence Pomeroy, who was the chief engineer of Vauxhall Motors in the 1930s, said, “If you have to measure an improvement, you probably haven’t made one.” We should not get too fixated about our inability to measure underemployment, because it is probably sufficiently significant for us to be able to see it without needing to have the confidence to say that underemployment is this number rather than that number—it is a big enough issue, although I think that it was Deming who said, “If you can’t measure it, you can’t improve it.”

Certainly, as we respond to the challenge of underemployment, we have to have better numbers in front of us. Professor Fred P Brooks, who wrote a book called “The Mythical Man-Month”, posed the question, “How does a project get late?” and the answer is, “One day at a time.” Unemployment and underemployment are very similar. They happen in little slices and eventually we realise that the whole sausage has disappeared. Therefore, the difficulties involved in measuring it should not prevent us from considering underemployment to be a real problem.

Skills use is a real corker of a question because, of course, I do not necessarily want to use all of the manifest skills that I have built up over my long life—[Laughter]—and indeed that anyone of my age may have built up—I make no exclusive claims in that regard, although I acknowledge the plaudits from other members in the chamber. The bottom line is that we all gain huge amounts of experience as we go through life and we are very unlikely ever to have a job in which we can use every skill that we have. Equally, if there are skills that are of economic value that we ought to be able to deploy in the workplace and we are unable to find employment that helps us to do that, that is certainly an issue to which public policy should respond.

Ken Macintosh said a lot that I agreed with but, in relation to the balance between the benefits system and employment, I say to him in particular—and I suspect that he would agree with me on this—that rather than follow the UK Government’s current strategy, which is to try to make unemployment less attractive, we need to have a strategy that makes employment more rewarding. There will probably be a consensus on that—

Bob Doris: Will the member take an intervention on that point?

Stewart Stevenson: I will.

Bob Doris: Like Mr Stevenson, I do not sit on the committee that produced the report but, as a former deputy convener of the Subordinate Legislation Committee, I feel Mr Stevenson’s pain in relation to the meetings of that committee.

As regards incentivising people into employment, I have not yet heard anyone mention reforms to the tax credit system. A lot has been said about gender inequalities in relation to underemployment. Does Mr Stevenson think that reforms to the tax credit system in particular have disadvantaged a lot of women who work part-time but would like to do more hours, and that that is something that—while the power sits at Westminster and not with this Parliament—the UK Government should consider?

Stewart Stevenson: The member makes a very good point. One of the arguments for child benefits was always that they went straight to the mother and therefore gave at least a modest bit of security to the mother. There are some difficulties with the tax credit system.

I will close by talking a little about zero-hours contracts. One of the difficulties is that I am not sure that they are contracts. A contract has an offer, an acceptance and something of value delivered, and I am not sure that the latter qualification is met. I suspect that, at some point, the zero-hours contract will be legally challenged.

We must be careful about imagining that skills will always find a home. That will not always be the case, and we must not get locked into the idea that we need to preserve all the skills that we once had—we simply will not succeed in that.

On taxation, here is a suggestion for Westminster: directors of companies should receive no bonuses if they would be more than 5 per cent of the profits of the company that they work for. The trick is that, if there are no profits, there are no bonuses. Maybe that would mean that there are profits in the UK, and we will then be able to collect some of the tax from them. That is just a little incomplete thought, which I have not fully thought out.


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