Brexit and Fulfilling Work: Responding to Threats and ......Training and Employment Research Unit...

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Report by Alan McGregor for CUKT

Brexit and Fulfilling Work: Responding to Threats and Exploiting Opportunities

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ACKNOWLEDGEMENTSReport by Alan McGregor for CUKT

The text of this work is licensed under the Creative Commons Attribution- ShareAlike 3.0 Unported License. To view a copy of this license visit, http://creativecommons.org/licenses by-sa/3.0/ or send a letter to Creative Commons, 444 Castro Street, Suite 900, Mountain View, California, 94041, USA.

Contents

Acknowledgements

Foreward

1. Summary

2. Fulfillingworkandwhyitmatters

3. FulfillingworkintheUK

4. ImpactofBrexitonfulfillingwork

5. Mitigatingthreatsandexploitingopportunities

6. Annex:Approachtostudy

BREXIT AND FULFILLING WORK: RESPONDING TO THREATS AND EXPLOITING OPPORTUNITIES4

Acknowledgements

TheauthorisgratefultoTheocharisKromydasfromtheAdamSmithBusinessSchoolattheUniversityofGlasgowforresearchsupportincompilingthetablesandchartsinthereport.Manyindividualsalsogavegenerouslyoftheirtimeforinterviewsandemailexchanges.Finally,staffatCarnegieUKTrustprovidedveryhelpfuldetailedandconstructivecommentsonpreviousdrafts.

5BREXIT AND FULFILLING WORK: RESPONDING TO THREATS AND EXPLOITING OPPORTUNITIES

MartynEvansCEO,CarnegieUKTrust

Foreword

TheconsequencesoftheUKleavingtheEUishighlyunpredictableacrossawidearrayofpublicpolicyissues.AgreatdealwilldependonthedetailedarrangementsthatareestablishedtodeterminetheUK’sfuturerelationshipwiththeEU.ItfollowsthattheimpactofBrexitonthewellbeingofUKcitizensisuncertain.WehavethereforecommissionedaseriesofexpertstoconsidertheimpactofBrexitontheTrust’sthreekeythemes:digitalfutures,fulfillingworkandflourishingtowns.

Inthispaper,AlanMcGregor,ResearchProfessorofEconomicDevelopmentattheUniversityofGlasgow’sTrainingandEmploymentResearchUnit(TERU),providesanindependent,expertperspectiveonthepotentialthreatstofulfillingworkarisingfromBrexit,andassessestheimplicationsandopportunitiesofeachoftheseissuesforfulfillingwork.

Thepurposeofthepaperisnottoprovideadefinitivepositionontheseissuesbutrathertoserveasastartingpoint–orguide–toawiderangeofpublicpolicyissuesthatcaninformtheTrustandothersonpossiblenextstepsandprioritiesforfulfillingworkintheUK,irrespectiveoftheformthatBrexittakes.

1. Summary

Fulfilling Work and Why it MattersTheCarnegieUKTrustdefinesfulfillingworkintermsofavailabilityofwork,qualityofworkandwellbeingassociatedwithwork.Fulfillingworkexertsapowerfulinfluenceonindividualwellbeingbyofferingasenseofpurpose,socialconnectionsandpersonalagency,aswellasgeneratingwidereconomicandsocietalbenefits.

Fulfilling Work in the UKMajorforcesimpactingnegativelyonfulfillingworkintheUKoverthelongtermhaveincludedtechnologicalchange,increasedcompetitionfromoverseaslabourduetoglobalisation,andtheriseofneo-liberalpoliciesintheUKreducingthepoweroftradeunionsandencouraginglabourmarketflexibility.Majorrecessions,suchasinthe1980sandsince2008,shiftthebalanceofpowertowardsemployersandexacerbatethelong-termtrends.

Sincetheonsetoftherecessionin2008,employmentgrowthhasbeenparticularlystronginpart-timeemploymentandself-employment.Temporaryemploymentwasindeclinepriorto2008butsubsequentlysurged.Withinthetemporarycategory,jobswithzerohourscontactshaverisenquitedramaticallyinpercentagetermsbutmakeuponlyalittleover3%ofalljobs.Intermsofaccesstojobs,inlinewithpreviousrecessions,employmentratesformoredisadvantagedgroupsdeclinedbuthavesubsequentlyrecoveredformostgroupswiththemajorexceptionofpeoplewithnoorlowqualifications.

OninternationalcomparisonswithotherOECDeconomies,theUKisinthelowerhalfoftheleaguetableinrelationtojobinsecurity,butclosetomid-tableforearningsquality.TheUKperformswellonhardoutcomesassociatedwithhealthandsafetyintheworkplace,butcomparesverypoorlyonmeasuresofworkplaceparticipationandemployeeengagement.

Impact of Brexit on Fulfilling WorkItishardtoassessthepotentialimpactsofBrexitonfulfillingworkfortwomainreasons–thepreciseformthatBrexitwilltakeremainsuncertain,andtheeventitselfisclosetounprecedented,meaningthelessonsofhistorycannotbedrawnupon.Theapproachadoptedinthisreportinvolvedanextensivereviewoftheliterature,togetherwithinterviewswitharangeofindependentexperts.MostoftheresearchliteratureworksontheassumptionthattheUKleavestheSingleMarket,takescontrolofmigrationfromtheEUandsetsitsownregulationsinrelationtoworkplacematters.

FourissuesofimportancetofulfillingworkintheUKwereexamined.Thesearediscussedbelow.

Issue 1: Size and Structure of UK EconomyThereisanearconsensusamongindependentexpertsthatBrexitwillleadtoslowergrowthinthesizeoftheUKeconomyandinemploymentlevels.ThiswillbedrivenbyreducedratesofgrowthinUKexportsandlowerforeigndirectinvestmentintotheUKasaresultofleavingtheSingleMarket.Ifoverallglobalgrowthtrendsremainstrong,thiscouldmeansimplythattherateofgrowthofUKemploymentwoulddecline.Nevertheless,theprognosisisaweakeningoflabourdemand–andthistendstobeassociatedwiththepersistenceoftemporaryworkandothermanifestationsoflowerjobquality.

Issue 2: Levels of In-migration and Return MigrationOneofthemosthighprofileissuesintheBrexitreferendum,andalikelyoutcomeoftheprocess,isareductioninmigrationfromtheEUtofilllowerskilledjobopportunities.However,therearegrowingconcernsintheemployercommunitythatthiswillbeaccompaniedbyhigherratesofreturnmigration.Theconcernisthatthe2.4millionEUmigrantscurrentlyemployedintheUKtendtobeconcentratedinspecificoccupations,sectorsandregions.Becauseofthis,specificbusinessesmayfacerecruitmentchallengescausingthemtorelocate,downsizeorclose.AlthoughthemostrecentstatisticsshowfewerEUmigrantscomingintotheUKandmoreleaving,thein-migrantsexceededthereturnmigrantsby100,000overthelastfullyear.Additionally,ifBrexitdoesimpactadverselyonemploymentlevelsasdiscussedabove,thenlaboursurplusandnotshortagewillbecometheproblemintheUK.

Onthepositiveside,thepotentialreductioninlaboursupplyforlowerskilledjobsdoesoffergreaterscopetoincreaseemploymentratesforthosewhohaveoftenexperiencedthemostdifficultyinaccessingthelabourmarket.Additionally,anumberofindependentanalystsaresuggestingthatemployersfocusedmoreonlowerskillsmaybeforcedtoincreaseearningsandimproveconditionstoretainandattractworkers.

Issue 3: Employment Protection Laws and RegulationsThedominantviewofindependentcommentatorsisthatmembershipoftheEUhassignificantlyenhancedworkers’employmentrightsandprotections.TheimportanceofthiscontributionisreinforcedbyinternationalcomparisonsthatshowthattheUKisweakinrelationtothelabourmarketinstitutionsthathelpinmitigatingtheforcesthatdrivethepolarisationofthelabourmarketandreductionsinjobquality.Thereisnocompellingevidencetosupportthecontentionthatreducedemploymentprotectionregulationwouldhelpstimulatetheeconomy,andindeedthismaymakeithardertosecurenewtradedealsinthefuture,withnegativeconsequencesforexportingandemployment.

Issue 4: European Structural FundsEuropeanStructuralFundshaveprovidedsubstantialfundingfortheUK’slaggingregions,andforunemployedpeoplewithmorechallengingissuestryingtosecureandsustainemployment.ThirdsectororganisationsworkingwithmoredisadvantagedgroupsofthepopulationaredeeplyconcernedthatwithoutEuropeanSocialFundmonies,manyoftheircriticalservicescannotbesustained.

However,atleasthalfofthefundingcomesdirectlyfromUKpublicsectorbodiesasmatchfunding.Additionally,thebureaucracyassociatedwithEUfundinghasbeenseverelycriticisedinmanyreports,andtherearealsodoubtsabouttheimpactsofESFandStructuralFundsmoney.ThereisscopetodobetterifexistingUKfundingcanberolledforwardandpossiblyenhanced.

Mitigating Threats and Exploiting OpportunitiesThereportsuggestsanumberofgeneralandspecificactionstodealwiththethreatstofulfillingworkposedbyBrexit,andproposalsonhowtomakethemostofsomeoftheopportunities.Thesearesetoutconciselybelow.

General Actions Required Irrespective of Brexit Outcome1. BuildontheTaylorReviewtoimplementaraftofmeasureswithinastrategicframeworkfortackling

employmentpracticeswhichimpactnegativelyonjobqualityandfulfillingwork.

2.Governmentandthepublicsectormoregenerallyshouldusetheirprocurementleveragetofavourbusinessesoffering‘goodwork’totheiremployees,reducingthedemandforgoodsandserviceswherethebusinessmodelisbuiltaroundlowpay,insecureemploymentandpoorconditions.

3.AspartofastepchangeintheUK’ssupply-sideinfrastructure,reducesignificantlytheUK’shighvolumeofworkingagepeoplewithnoorlowqualifications–nearly8millionin2016.Thisisthelabourforcethathelpssustainbusinessesorganisedaroundoffering‘poorwork’.

Brexit Issue: Rising Unemployment if Economy Shrinks4.Theevidenceisclear-buoyantlabourmarketshelppromotefulfillingwork.Ifleadingindicators

suggestthatthepost-BrexitUKeconomyisheadedforlowornogrowth,orevendecline,themacro-managementoftheUKeconomywillneedtomovequicklyanddecisivelyawayfromtheausterityapproachadoptedin2010.

Brexit Issue: Declining EU Migration 5.Specificoccupationalareas,sectorsandregionsaremoredependentthanothersonworkersfrom

theEU.Targettheseareaswithemployabilityandskillsinterventionstodevelopareplacementlaboursupply,drawinginparticularonthemoredisadvantagedsectionsoftheworkforcewhohavedifficultyaccessingemployment.

6.SupportemployerscurrentlywithahighdependencyonEUworkerstoimprovethequalityoftheirjoboffer,andsoenhancetheircapacitytorecruitandretainworkers.Thiswouldinvolvesomeformofbusinessdevelopmentsupport,andtherearemanymodelstodrawon.

7.Combinetheabovetwomeasuresinasmallnumberofpilotsfocusedonspecificsectorsand/orgeographies.Theplanningforthesecouldbeginnow.

Brexit Issue: Threats to Employment Protection8.Usingfulfillingworkastheorganisingconcept,developanevidence-basedmanifestoonwhyit

isessentialtokeepandbuildupontheemploymentprotectionsgainedduringtheUK’speriodofmembershipoftheEU.Thiscouldbeusedacrossarangeofcampaigns.

9.CreateaFulfillingWorkImpactAssessmenttobeusedwheneveranyemploymentprotectionlaworregulationisbeingreviewed.Thiscouldbuildoutfromtheevidence-basedmanifestodiscussedabove.

Brexit Issue: Loss of European Structural Funds10.Campaignto,attheveryleast,retaintheUKpublicsector’smatchfundingcomponentofthe

StructuralFundsbeyond2020,andinvestthisinanewBrexitEconomyandLabourMarketAdjustmentFund.Thiswouldbefocusedonregionsandsub-regionsmostadverselyimpactedbyBrexit.Thiswouldsupportfulfillingworkbyseekingtomaintainahealthydemandforlabourintheseareas.

2. Fulfilling Work and why it

What is Fulfilling Work?TheCarnegieUKTrusthasidentified‘FulfillingWork’asoneofitsthematicprioritieswithinits2016-2020StrategicPlan.In2016,theTrustpublishednewresearchexaminingthedifferentaspectsofwhatmightbedefinedasfulfillingwork,includingjobavailability,jobqualityandworkandwellbeing.1

Thesethreeaspectsaredefinedasfollows:

• AvailabilityofWork-‘Howeasilyandfairlycanpeoplefindthetypeandlevelofworktheywouldlike?’• QualityofWork-‘Doterms,conditionsandopportunitiesatworkmeetpeople’sexpectations?’• WorkandWellbeing-‘Dowiderfactorsaroundengagement,connectionandagencyatworksupport

personaldevelopmentandfulfilment?’

Althoughsetoutasindividualelements,itisnotdifficulttoseetheconnectivitybetweenthedifferentelements.Forexample,itislikelythatsometypesoflowqualityworkaremorereadilyavailabletojobseekers,butinalabourmarketwhichishighlysegmented,withgroupssuchasdisabledpeoplesufferingsignificantbarrierstoemployment,therewillstillbesignificantcompetitionforlowqualityjobs.Itisalsolikelythatinsomeinstanceslowqualityworkwillbecorrelatedwithlowlevelsofwellbeingintheworkforce.Forexample,theinsecurityassociatedwithzerohourscontractsmaybeexpectedtohaveadetrimentaleffectonwellbeingforsomeoftheemployeesonthesecontracts.

Moredetailedfeaturesofeachoftheaspectsoffulfillingworkaredescribedbelow.Thistabledemonstratesclearlytheconsiderablecomplexitylyingbeneaththeconcept,butalsothespecificareaswhereactionisrequiredtomakefulfillingworkthenorm.

1 Ormston,R.,andHope,S.(2016).WorkandWellbeing.ExploringDataonInequalities.CarnegieUKTrust.

matters

Availability of work

Work + Wellbeing

Quality of Work

QualityofWork WorkandWellbeing AvailabilityofWork

Income and pay Personalagencyandemployeeengagement

Job-seekingbehaviour

Termsandconditions Work-lifebalance Benefitssanctions

Jobsecurity Management support Discrimination

Opportunitiesforprogressionandtraining/skillsdevelopment

Socialconnectionsthroughwork Overorunderemployment

Workwith‘meaning’

Jobsatisfaction

Source: Ormston and Hope (2016)

Why Fulfilling Work MattersThetableaboveindicatesmanyofthereasonswhyfulfillingworkexertsapowerfulinfluenceonindividualwellbeing.However,fulfillingworkalsogenerateswidereconomicandsocietalbenefit.

TheLinktoInequalityInequalityisincreasinglyconsideredtoexertnotonlysignificanthumanandsocialcosts,butalsoadampeningeffectonproductivity,economicgrowthandtheprosperityofsocietyasawhole.2 In terms ofthelabourmarket,inequalityinrelationtothedistributionoftheburdenofunemploymentisalongstandingconcern,andearningsinequalityisonespecificcomponentoffulfillingworkandjobqualitymoregenerally.However,asthecollectioneditedbyFelstead,GallieandGreendemonstratesconvincingly,inequalityinjobquality morebroadlydefinedisacentralfeatureoftheUKlabourmarket.3

ManyregionsoftheUKarenowcharacterisedbyalowskillsequilibriumwherethedemandforandsupplyofskillssettlesatarelativelylowlevel,andthisfeedsthroughintotheUK’slaggingproductivityperformance.Ashiftinstructureisrequiredtowardshighskilledorhighproductivityjobs.AdefiningcharacteristicoftheUK(whichitshareswiththeUS)isgreatinequalityinlabourmarketopportunitiesandoutcomes.Additionally,inequalityinlabourmarketoutcomesacrossregionsandsub-regionsoftheUKhaspersistedovermanydecades.4

Thelinksbetweentheeconomy,thelabourmarketandinequalityareincreasinglybeingframedwithinthenotionof‘InclusiveGrowth’.5Essentially,thisinvolvestryingtospreadthebenefitsofeconomicgrowththrougharangeofmeasurestoallpartsofthepopulation.

2 Stiglitz,J.(2012).ThePriceofInequality:HowToday’sDividedSocietyEndangersOurFuture.London:AllenLane.;Ostry,J.,Berg,A.andTsangarides,C.(2014).Redistribution,InequalityandGrowth.IMFStaffDiscussionNote.

3 Felstead,A.,Gallie,D.andGreen,F.(eds).(2015).UnequalBritainatWork.Oxford:OxfordUniversityPress

4 Amior,M.andManning,A.(2015).ThePersistenceofLocalJoblessness.CentreforEconomicPerformanceDiscussionPaper1357,LSE.

5 RSA(2017).InclusiveGrowthCommission:MakingOurEconomyWorkforEveryone

TheLinktoProductivityThereisgrowingevidence,summarisedbyRogersandRichmond,thatfulfillingworkcangeneratebottomlinebenefitsforbusinessesthroughincreasedemployeeperformanceleadingtohigherproductivityandprofitability,butalsosimpleroutcomessuchaslowerlabourturnoverandlowerabsencerates.6Thiscaninturngenerateproductivitygainsacrosstheeconomy.TheUK’slowproductivity,particularlypronouncedsincetheonsetoftherecession,isasignificantdragoninternationalcompetitivenessandearningsgrowthwithinthelabourmarket.

ThePublicCostofPoorWork Therearemanystudiestoshowthatpoorandstressfulworkingconditionscanimpactnegativelyonbothphysicalandmentalhealth(forexample,NolanandWhelan).7OECDsummarisesarangeofevidencethatdemonstratesconvincinglythewiderangeofadverseoutcomesformentalandphysicalhealththatcanresultfromjobstrain.8ChandolaandZhangsuggestthatmovingfromunemploymentintopoorqualityworkisassociatedwithhigherlevelsofchronicstress–relatedbiomarkersrelativetothoseremainingunemployed.9

Thereisawiderdebatearoundtheinteractionbetweenlowwagesandpoorjobqualityontheonehand,andthetaxandwelfaresystemsontheother.Thisincludesthepotentialroleofworkingtaxcreditsinsubsidisingthelaboursupplytoemployersofferingpredominantlylowwageopportunities.10Additionally,attentionisnowalsobeingdirectedtotheroleoftheUKtaxsysteminincentivisingemployerstooffercertaintypesoflowqualityjob,forexampletreatingworkersasself-employedwhoareforallintentsemployeestoavoidpayingnationalinsurancecontributions,butalsoholidayandsickpay.Thisissometimestermed‘bogusself-employment’.Thispracticeis,however,notrestrictedtoemploymentinthelowerregionsofthelabourmarket.11

Thestronggrowthofself-employmentalsoposesproblemsfortaxrevenues.Onaverage,theself-employedearnlessthantheemployedandaretreatedmorefavourablyintermsofwhatcanbeoffsetagainsttax,bothofwhichreducethetaxbase.12Additionally,theaveragerealearningsoftheself-employedhavefallenbymorethanaquartersincetheonsetoftherecession,morethantwicethedeclineinemployeerealearnings.13

TheseissueswereaddressedbytheTaylorReview,14whichwascommissionedtoinvestigatehowemploymentpractices,someofwhichimpactadverselyonthequalityofwork,needtochangeinordertokeeppacewithmodernbusinessmodels.Amongmanyrecommendations,theTaylorReviewcalledforgreaterequalitybetweentheemployedandself-employedintermsoftaxation,aswellasaccesstostate-basedentitlements.TheReviewalsorecommendedaclarificationofthelegaldefinitionsof‘employee’,‘worker’and‘self-employed’.

6 Rogers,G.,andRichmond,K.(2016).‘Fairworkandproductivity’.FraserofAllanderInstituteEconomicCommentary,December.

7 Nolan,B.,andWhelan,C.(2014).‘TheSocialImpactofIncomeInequality:Poverty,DependencyandSocialCohesion’.InSalverda,W.etal.(Eds).ChangingInequalitiesinRichCountries.Oxford.OxfordUniversityPress.

8 OECD(2014).OECDEmploymentOutlook2014.

9 Chandola,T.andZhang,N.(2017).‘Re-employment,JobQuality,HealthandAllostaticLoadBiomarkers:ProspectiveEvidencefromtheUKHouseholdLongitu-dinalStudy.’InternationalJournalofEpidemiology.

10 Schmitt,J.(2012).LowWageLessons.CentreforEconomicandPolicyResearch

11 Boheim,R.andMuehlberger,U.(2006).DependentFormsofSelf-EmploymentintheUK:IdentifyingWorkersontheBorderbetweenEmploymentandSelf-employment.IZADiscussionPaper,No1963.

12 TUC(2017a).TheImpactofSelf-EmploymentonInsecureWorkandthePublicFinances.

13 DepartmentforBusiness,InnovationandSkills(2016).TheIncomeoftheSelf-Employed.

14 TaylorReview(2017).GoodWork.TheTaylorReviewofModernWorkingPractices.

3. Fulfilling Work in the UK

Thepurposeofthissectionisto:• ExploresomeofthechangesovertimeinrelationtofulfillingworkintheUK.Thiswillestablishthe

directionoftravelagainstwhichtheimpactsofBrexitmaybeassessed.• Considersomeofthekeyexplanationsforthesechanges.

Explanations of Long Run Change Leadingexperts15haveanalysedthechangingpositiononjobqualityintheUKover25years,focusingonfour key aspects:• Wagesandmonetaryrewards.• Jobprospects,includingmovementsupanddownthejobshierarchy,andtheuncertaintyof

employment. • ‘Intrinsicjobquality’,includingskilllevelsandtheintensityofwork.• Qualityofworkingtime,inrelationtotheneedsoftheemployeeandworklifebalance.

Someofthekeydriversofchangeidentifiedinthestudyarediscussedbelow.

Technologicalchangehasbeenacceleratinginrecentdecades.Thenatureofthechangehasledtoanincreaseddemandforhigherskilledworkers,butareductioninthedemandforthosewithmediumskills.Thisisviewedasamajordriverofthepolarisationofjobs,sometimescharacterisedasthe‘shrinkingmiddle’,‘hollowedout’or‘hourglass’labourmarket.Oneseriousimplicationforthoseinthelowerreachesofthelabourmarketisthattheopportunitiesforprogressionaremuchmorelimitedthanbefore.

Ahighlevelofearningsinequality characterisestheoutcomesoftheUKlabourmarket.Thisisdrivenpartlybythetechnologicalchangesnotedabove,butitalsoreflectsthefactthatthesupplyofskillshasnotbeenkeepingupwiththerisingdemandforskills.

TheriseofglobalisationhasbroughtincreasedcompetitionfromoverseaslabourtotheUKandotheradvancedeconomies,largelythroughtradeandfiercepricecompetitionfordomesticallyproducedgoodsandservices,butalsothroughmigration.Thecompetitionthroughtradehasimpactedsignificantlyonthemanufacturingjobsbase,takingoutmanyjobsinthelowertosemi-skilledrange,andreinforcinglabourdemandchangesresultingfromtechnologicaldevelopments.

Theglobalrecession whichbeganin2008hasshiftedthebalance of power furtherfromemployeestowardsemployers.Initially,asunemploymentqueueslengthenandrecruitmentlevelsfall,employersareconfrontedwithmuchgreaterchoiceintermsofwhotheyrecruit,andonwhattermsandconditions.Whengrowthreturnedtotheeconomy,employmentlevelsbegantorise.However,thiswascharacterisedbyastrongexpansioninpart-timeandtemporaryjobs,andinself-employment,reflectingacontinuingunderlyingweaknessinthelabourmarket.

15 Green,F.,Felstead,A.,andGallie,D.(2015).‘TheinequalityofJobQuality’,inFelstead,A.,Gallie,D.andGreen,F.(eds).UnequalBritainatWork.Oxford:OxfordUniversityPress.

Manyanalysesofthechangingnatureofthelabourmarketinrecentyearsreflectsimplyanupdatingofsimilarthinkingabouttheconsequencesofthemajorrecessionoftheearlytomid-1980s,whereoneofthekeyfeatureswasasignificantriseintemporaryemploymentandoutsourcingoflabour.16 An additionalprocessidentifiedbylaboureconomistsasfarbackasthe1960sistheimpactof‘bumpingdown’inrecessions,wherehigherandmediumskilledworkerscompeteforlowskilledjobs,placingintensepressureonlabourmarketopportunitiesandearningsforworkerswithlowskills.

Theriseofneo-liberalpoliciesintheUKinthe1980sand1990shelpedreducethepoweroftradeunions,andpromotedthede-regulationofthelabourmarket,withconsequentreductionsinemploymentprotection.AlthoughthesepolicieswererolledbacktosomeextentbytheLabouradministrationfrom1997,withtheaddedsupportofEUdirectives,tradeuniondensitiesdidnotrecoverandtradeunionpowerhasremaineddiminished.Thesechangesarecriticallyimportantasinternationalanalysisplacesastrongweightontheroleoflabourmarketinstitutionsinmitigatingthepotentiallynegativeimpactsofsomeofthekeydriversdiscussedabove.17

Thekeyelementsinrelationtothepositiveeffectsoflabourmarketinstitutionsarecollectivebargainingcoverage,minimumwagelegislation,employmentprotectionlawsandregulations,therobustenforcementofminimumwagesandemploymentprotectionregulations,andmoregenerousoutofworkbenefitswhichplacepressureonemployerstoraisewages.

Meager(2015)summarisesthekeyfindingsoftheGreen,FelsteadandGalliebookinrelationtochangingjobqualityovertime.• Incontrasttocommonperceptions,averagejobtenurehaschangedlittleovertime.• Thequalityofworkingtimehasimproved,intermsofhoursofworkandthecoverageofpaidholidays.• Findingsaremoremixedinrelationtoautonomyintheworkplace.• Therehasbeenariseinworkintensity.• Akeyfeatureistheveryunevendistributionofjobqualitybetweensocialclassesandotherkeylabour

marketgroupings.Additionally,theseinequalitiesmarkouttheUKinrelationtomostinternationalcomparators.18

Interestingly,thereislimiteddiscussionintheacademicliteratureofsupply-sidechangeswhichmighthaveinfluencedtheabilityofUKemployerstosustainrecruitmentandretentionforlowqualityandrelativelyunattractivejobs.Thereareanumberofpossibleinfluencesonthesupplyside.• ThereareargumentsthatWorkingTaxCreditshaveactedasasubsidytooftenmajoremployers

payinglowweeklyearnings.19 • Migrationlevelshaverisensignificantlyoverthelast10-15years.AlthoughmanyEUmigrantsarewell

qualifiedandskilled,mostappeartogointorelativelylowskilledandlowqualityjobs.20Asisarguedlater,theacademicliteratureisalmostexclusivelypositiveontheimpactsofmigrationontheUKeconomyandlabourmarket.However,thereappearstobelimiteddiscussionaroundthecontributionofmigrationtohelpingsustainabusinessmodelinsomesectorsbasedonlowpaidandpoorqualityjobs.

16 Atkinson,J.(1985).Flexibility,UncertaintyandManpowerManagement.TheInstituteforEmploymentStudiesreport89.TheInstituteforEmploymentStudies;McGregor,A.andSproull,A.(1992).‘EmployersandtheFlexibleWorkforce’.EmploymentGazette,100.

17 Fernandez-Macias,E.andHurley,J.(2014).DriversofRecentJobPolarisationandUpgradinginEurope-EuropeanJobsMonitor2014.Eurofound;Schmitt,J.(2012).LowWageLessons.CentreforEconomicandPolicyResearch.

18 Meager,N.(2015).‘IsWorkGettingWorse,andWorsefortheWorkers?’IESViewpoint,Issue22.

19 CitizensUK(2015).PublicSubsidiestoLowWageEmployers:MethodsBriefing;Neumark,D.(2015).‘ReducingPovertyviaMinimumWages,Alternatives’.Fed-eral ReserveBankofSanFranciscoEconomicLetter,December;Schmitt,J.(2012).LowWageLessons.CentreforEconomicandPolicyResearch.

20 Portes,J.andForte,G.(2017).TheeconomicimpactofBrexit-inducedreductionsinmigration.OxfordReviewofEconomicPolicy.33(S1).

• ‘Workfirst’employmentpolicieshavebeenincreasinglyfavouredbytheUKgovernmentfromtheearly2000s,andtheseplacepressureonunemployedpeopletoacceptpotentiallyunattractivejobsunderthreatofbenefitssanctions.Relativetosimplyfindingajob,qualityofworkhasbeenapoorrelationinemploymentpolicyterms.21

• Smallerinscale,thesubstantialincreaseinhighereducationparticipationunderafinancialregimewherestudentfeeshavereplacedgrantaid,haspossiblyledtoincreaseddemandforpart-timeworking.AddedtothisistheevidenceofsignificantskillunderutilisationaffectinggraduatesintheUK.22

Thecumulativeeffectofthesetrendsdatingback15to20yearscouldbequitesignificantintermsofthebalanceofdemandandsupplyatthelowerendofthelabourmarket.

Changes Since 2000: Some Statistical Evidence Thissectioncapturessomeofthechangesinmorereadilymeasurableindicatorsrelevanttofulfillingwork.Thefocusisontheperiodsince2000,withasplitat2008whichwastheyeartheglobalrecessionfirstimpactedontheUKlabourmarket.

EmploymentAnalysisofstatisticaldataheldbytheOfficeforNationalStatistics(ONS)showsthattotalemployment(includingself-employment)hasgrownsignificantlyovertheperiod2000to2016,up7%since2008,buttherehavebeensignificantvariationsacrossthedifferenttypesofemployment.• Full-timeemploymentgrewstronglyuptotherecession.Therehasalsobeenarecoverypost-recession

andamodestgrowthof3%since2008.• Part-timeemploymentgrewatthesamerateasfull-timeupto2008,butatnearlythreetimestherate

offull-timeemploymentsincetherecession.• Self-employment hasbeenoneofthestrongestgrowthcomponents,withtheincreasesparticularly

marked(24%)sincetheonsetoftherecession.However,thiswasanaccelerationofanexistingtrendwitha19%increasebetween2000and2008.Clearlytherearesignificantpolicyandlegalissuesaroundthedefinitionofself-employment,discussedintheTaylorReview.23Additionally,likeemployment,self-employmentappearstobehighlypolarisedintermsofearningslevels,withahighproportiononlowaverageearnings,exposedtogreatervolatilityinearningsovertimeandlackingmostoftheemploymentprotectionavailableforemployees.24Earlier,itwasnotedthatsincethestartoftherecession,realaverageearningsfortheself-employedhaddeclinedatmorethantwicetherateofemployeeearnings.

• Temporary employment isinterestingasthiswasindecline(downby18%)from2000uptotherecession.ThisreflectswhathappenedwhentheUKlabourmarketemergedfromtherecessionofthe1980s,withemployersforcedtooffermorepermanentemploymenttosecuregoodqualityrecruitswhenthelabourmarkettightened.However,after2008temporaryemploymentsurged,growingby20%.

• Zerohourscontractsareasub-setoftemporaryemployment.Thesehavegainedaveryhighprofilebutaccountforonlyaround3%ofallemployment.Zerohourcontractsfellsubstantially(by43%)inthetighteninglabourmarketleadinguptotherecession,buthaverisendramaticallysince.Thesix-fold

21 Etherington,D.andDaguere,A.(2015).WelfareReform,WorkFirstPoliciesandBenefitConditionality:ReinforcingPovertyandSocialExclusion?CentreforEnterpriseandEconomicDevelopmentResearch,MiddlesexUniversity.

22 Green,F.,andHenseke,G.,(2016).‘ShouldGovernmentsofOECDCountriesWorryAboutGraduateUnderemployment?’OxfordReviewofEconomicPolicy.32(4).

23 TaylorReview(2017).GoodWork.TheTaylorReviewofModernWorkingPractices

24 Hatfield,I.(2015).Self-employmentinEurope.InstituteforPublicPolicyResearch.

increasesince2008maybeexaggerated,possiblyduetothelowbaseandtheheightenedawarenessofthesecontractsinthemedialeadingtohigherlevelsofreporting.Forexample,thenumbersincreasedrelativelymodestlybetween2008and2010,butdoubledinoneyearfrom2012

Figure1capturesthesechangesdiscussedabove,butzerohourscontractshavebeenexcludedduetotheverywidefluctuationsovertime.

Access to EmploymentFigure1:ChangingNatureofUKEmployment(indexedto2000=100)

Source: ONS

Thebestoverarchingmeasureofaccesstoemploymentistheemploymentrate,whichisthepercentageoftheworkingagepopulationinemployment.AnanalysisofdatadrawnfromONSgeneratesthefollowingconclusions:• Theemploymentratehasrisenovertheperiodsince2000,despitetherecession.Thisisa

straightforwardreflectionoftherisinglevelsofemployment,althoughittakesnoaccountofthechangingqualityandstructureoftheemployment.

• In terms of gender,theemploymentrateforwomenhasgrownatahigherratethanformen.• Theagefiguresclearlyshowalongtermtrendonasignificantscale,with50-64sincreasingly

engagedinthelabourmarket.Thisisareversalofatrendestablishedinthe1980srecession,withearlyretirementtosomeextentencouragedtoreducethepublishedunemploymentstatistics,butitalsoclearlyreflectsproblemsinrelationtopensionsunderliningtheneedformanypeopletokeeponworking.

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

self-employed (Q2) full time employees (Q2)

part time employees (Q2) temporary employees.(Q2)

Thegroupswithlowemploymentrates(seeFigure2)arethosetypicallydescribedasdisadvantagedinlabourmarketterms,duetodiscriminationandotherfactors.IncreasingtheemploymentratesforthesegroupscanplayanimportantroleinrespondingtoanyissuesaroundincreasedrecruitmentproblemsandlabourshortagesshouldmigrationlevelsfallsignificantlypostBrexit.• Lessthan50%ofdisabledpeople areemployed–butthefiguresshowaninterestingperspective

whichagainrepeatsanalysisofthe1980sand1990s.25Asthelabourmarkettightens,someemployersareforcedtochangetheirrecruitmentsourcesandpatterns.Thesignificantgrowthinemploymentratesfordisabledpeoplebetween2000and2008reflectsthisbehaviour.Withtheonsetoftherecession,theemploymentratefordisabledpeopledippedbuthassubsequentlybeguntorecover,althoughchangingdefinitionsofdisabilityinthesurveytoolscomplicatetheanalysis.

• Asimilarpatterncanbeobservedforemployeesfromminorityethnicgroups,butherethedipintheearlyyearsoftherecessionwaslessevident.Theemploymentrateforminorityethnicgroupshasrisenfromaround56%in2000to64%in2016.

• Thosewithnoorlowqualificationsseemtohavefaredworstthroughtherecession,withtheiremploymentratefallingfrom64.4%in2008to62.5%in2016.

Narrowingthegapinemploymentratesformoredisadvantagedgroupsinthelabourforcerelativetotheaverageemploymentratehassignificantwin-winpotential.• Byraisingtheeffectivenessofthelaboursupply,thecompetitivenessoftheeconomyisenhanced,

helpingtopromoteproductivityandgrowth.• Byraisingtheemploymentratesofthemoredisadvantagedgroups,theprospectsofmoreinclusive

growth areimproved.

Figure2:EmploymentRatesforSpecificGroups,2016

Source: ONS, Eurostat

25 Berthoud,R.(2007).Work-RichandWork-Poor:ThreeDecadesofChange.PolicyPress/JosephRowntreeFoundation.

62.5 63.969.6 70.7

Disabled No/LowQualifications

Ethnicminorities

Female 50-64 Total

EarningsLevelofpayisclearlyanimportantelementoffulfillingwork.• Overtheperiodfrom1986to2008averagerealearningsrosesteadily.However,subsequenttothe

onsetoftherecession,realearningsfellsharply.26 • ‘Earningsquality’ismeasuredbytheOECDbasedonrealaverageearningsandinequalityof

earnings.27AnalysisofOECDdatafor2005to2014showsthatfortheUK,earningsqualitypeakedaround2007butthendeclinedthroughtherecessionandtheperiodofrecovery.

• Thedeclineinearningsqualityisexplainedbythefallinrealaverageearningsratherthanchangestoearningsinequality.Theproportiononlowwages,usingtheOECDmeasureoftwothirdsofmedianearnings,hasremainedreasonablysteadyatalittleabove20%fortheprevious20years.28

Figure3:UKEarningsQuality(Indexedto2005=100)

Source: OECD Data

Labour Market InsecurityTheOECD29calculateslabourmarketinsecurityonthebasisoftheriskofbecomingunemployedandthecompensationforunemploymentshoulditoccur.AnalysisofOECDdatafortheUKcoveringtheperiod2007-2013indicatesthatlabourmarketinsecuritysurgedin2008butbegantodeclinefrom2011,inlinewithasustainedfallintheriskofunemploymentasindicatedinFigure4.Giventhecutoffpointforthedata,itisnotpossibletosaywhetherlabourmarketinsecurityintheUKhasnowdeclinedtopre-recessionlevelsbutasof2013,labourmarketinsecuritywasstillaround30%higherthanin2007.

26 Green,F.,Felstead,A.,andGallie,D.(2015).‘TheinequalityofJobQuality’,inFelstead,A.,Gallie,D.andGreen,F.(eds).UnequalBritainatWork.Oxford:OxfordUniversityPress.

27 OECD(2014).OECDEmploymentOutlook2014

28 Clarke,S.andD’Arcy,C.(2016).LowPayinBritain2016.ResolutionFoundation.

29 OECD(2014).OECDEmploymentOutlook2014.

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Earnings quality (in constant prices, at constant PPPs) Average earnings (hourly earnings in constant prices, at constant PPPs) Earnings inequality

Source: OECD Data

QualityofWorkingEnvironmentTheOECDmeasurementofthequalityoftheworkingenvironment(OECD,2015)iscomplex,basedonthetwinconceptsofjobdemandsandjobresources(whichincludeautonomyandsocialsupportintheworkplace).Eachoftheseconceptsisinturnmeasuredbyanumberofindividualindicators,whichmakesitchallengingtopresenttheresultsusinggraphs.AnalysisofOECDdatafortheUKfor2005,2010and2015suggeststhefollowing:• Thebigchangeswerebetween2005and2010.Inparticular,jobdemandsandphysicalhealthrisk

factorsincreasedandsocialsupportatworkdeclinedverysignificantly.Ontheotherhand,timepressuresdeclinedandworkautonomyandlearningopportunitiesincreased.

• By2015,thelevelofjobdemandsandphysicalhealthriskfactorsdeclinedandanincreaseinsocialsupportatworkwasexperienced–buttheoverallpositionwasstillmuchpoorerthanbeforetherecession.

Thispatternisconsistentwiththekindsofimpactsthatwouldbeexpectedinaperiodofsevererecession,butthefailuretorecoverpre-recessionoutcomesby2015isconcerning.

How Does the UK Compare With Other OECD Countries?Thissectionlooksattheevidencefromacademicstudies,butalsoOECDstatisticsonvariousaspectsofjobquality.TheoverarchingviewfromthecomprehensiveanalysesinthebookeditedbyGreen,Felstead,andGallieisthattheUKhas greaterinequalityinjobqualitycomparedtomostothercomparatoreconomies.Someofthedifferentelementsofjobqualityarediscussedbelow.30

LabourMarketInsecurityInternationalcomparisonsusingOECDdataonlabourmarketinsecuritygeneratethefollowingfindings.• TheUK,perhapssurprisingly,isinthelowerhalfoftheleaguetable–andthesamecouldbesaidfor

theUnitedStates–asbotheconomieshaverelativelylowunemploymentrates.However,thenatureoftheemploymentopportunitiesavailableclearlycomesintoplayhere.

30 Felstead,A.,Gallie,D.andGreen,F.(eds).2015.UnequalBritainatWork.Oxford:OxfordUniversityPress.

100.00

110.00

120.00

130.00

140.00

150.00

160.00

170.00

2007 2008 2009 2010 2011 2012 2013

Labour market insecurity Unemployment risk Unemployment insurance

Figure4:UKLabourMarketInsecurity(Indexedto2007=100)

• ThereissignificantdispersionacrosstheEUeconomies,possiblyreflectingtheunderlyingeconomicfragilityofsomeoftheseeconomies.

WhateveroverallemploymentprotectionmeasuresareinplaceinrelationtoEUregulations,backedupbyinvestmentthroughtheEuropeanSocialFund,theimplementationappearstovaryacrossmemberstates.

EarningsQualityOntheOECDmeasureofearningquality,whichlooksatbothaverageearningsandtheincidenceoflowpay: • TheUKisclosetomidtablefortheOECDeconomies,butthisisduetoreasonablyhighaverage

earnings.• Intermsoftheproportionofemployeesinlowwagedwork(seeFigure5),theUKfigureof20%is

relativelyhighoninternationalcomparisons;howeverthefigureforGermanyis18%.ThereisagainaverysubstantialvariationacrossEUmemberstatesonthisspecificindicator,withGermanyandtheUKmuchclosertotheUSthantomanyoftheirEUcompatriots.

HighlevelsofGDPandGDPgrowthclearlydonotautomaticallyreducetheincidenceoflowpay.

Figure5:ShareofEmployeesinLow-wageWork,SelectedEconomies2014

Source: OECD

Note: Data for all countries are from 2014 except Canada, the UK and United States which is from 2015 and Spain which is from 2012.

0.0 5.0 10.0 15.0 20.0 25.0 30.0

Ireland

Canada

Portugal

Germany

Greece

Australia

Austria

New Zealand

Finland

Denmark

Belgium

WorkingConditionsandEnvironmentAsnotedearlier,thereareanumberofdifferentelementsusedbyOECDandothersinassessingworkplaceconditions.• TheUKscoresrelativelywellagainstoverallindicatorsofjobstrainandjobresources. • Intheimportantareaofhealthandsafety,theUKperformsextremelywellincomparisonsacrossthe

OECDonhardoutcomessuchasfatalities,non-fatalinjuriesandreportedhealthproblems.• On a range of measures of workplaceparticipationandemployeeengagement,involvingsuch

measuresastradeuniondensitiesandcollectivebargainingcoverage,theUKscoresverybadlyrelativetoEUcounterparts.Thisisanimportantareaofdeficit,asresearchdiscussedearlierinthisreportnotedthestronginternationalevidenceonthegreatvalueoflabourmarketinstitutionsinmitigatingtheworstimpactsofthemaineconomicdriversbehindthepolarisationofthelabourmarket.

OverviewTheanalysisofthestatisticalevidencebaseproducesamixedpictureofwhathashappenedtothequalityofworkmovingintoandthroughtherecession.Likewise,theUK’scomparativerecordonjobqualityacrosstheOECDismixed.Whatisclear,however,isthatthereismuchtobedonetoincreasetheincidenceoffulfillingworkacrosstheUK.

ThenextsectionturnstotheissueofthepotentialimpactofBrexitonfulfillingworkintheUK.

4. Impact of Brexit on Fulfilling Work

TheobjectiveistoconsiderarangeofpotentialimpactsarisingfromtheUK’sexitfromtheEU,whichmayhavepositiveandnegativeimplicationsforfulfillingwork.Byconsideringthepotentialchanges,abaseiscreatedforidentifyingpoliciesandinterventionstomitigateonthedownsideandmakethemostofopportunitieswheretheyarise.Thediscussionisorganisedinthefollowingway:• KeypotentialissuesarisingfromBrexitareidentified,followedbyanoverviewandanalysisofeach

issueandthepotentialimpactsofBrexit.• Theimplicationsofeachoftheconsequencesforfulfillingworkarethenexplored,differentiating,

wherepossible,betweenpotentialimpactsonjobquality,workandwellbeingandaccesstowork.

ContextAcriticalstartingpointforthisanalysisisthatitisextremelydifficulttoassesstheconsequencesofBrexitfortheUKeconomyandlabourmarket.Economistsinanumberofagenciesandorganisationshavebeenworkingonforecastssincewellbeforethereferendum.However,aspointedoutbytheeditorialinanissueoftheOxfordReviewofEconomicPolicyin2017dealingexclusivelywithBrexit,31forecastingmodelsdonotworkwellinasituationwhere:• Theevent–Brexitinthiscase–isunprecedented.Inotherwords,thereisnoorlittlehistorytobuildon.• Thereareawiderangeofimpactsthatneedtobeassessedduetochangesinmicroeconomicpolicy,

trade,migrationflows,sectoralfactors,etc.• TheimpactsofBrexitcouldbespreadoveraverylongperiodoftime.Forexample,negotiations

around trade could take many years to conclude. • Allofthisisinthecontextoftheongoingdevelopmentoftheglobaleconomy,aswellasglobalissues

aroundsecurityandtheenvironment.

However,itiscertainthatunlessthereisavery‘soft’Brexit,therewillbesignificantchanges,particularlyinrelationtotradeandmigration,andpotentiallyinvestmentasaconsequence.• Changestothetradearrangementswillgeneratepotentiallythemostsignificantimpactsonoverall

employmentlevelsandthesectoralcompositionofemploymentintheUK.• InvestmentlevelsarealsopotentiallythreatenedbythedirectandindirectconsequencesofBrexit.

LessForeignDirectInvestment(FDI)maycometotheUKifthereisnocontinuingaccesstotheSingleEuropeanMarket(SEM),andtheremayalsobeareductionindomesticinvestmentwithsomeofthispotentiallytransferringtocontinentalEurope.

• MigrationfromtheEUislikelytobecurtailedtosomedegreeundermostscenarios,inpartdrivenbythepoliticalimpetusgiventothisissuebytheEUreferendum.

OtherpotentialinfluencesonfulfillingworkflowingfromBrexitincludethefollowing:• Changesinareassuchasemploymentprotectionandworkingtime,whicharecurrentlyregulated

throughEUdirectives.• Lossofstructuralfunds,wheretheEuropeanSocialFund(ESF)supportsamajorinvestmentinskillsand

employabilityacrosstheUK.

31 OxfordReviewofEconomicPolicy,33(1).2017.

Issue 1: Impacts on Size and Structure of the UK Economy

OverviewandAnalysisTheconsensusamongeconomicanalystsandforecastersisthatinthemediumtolongterm,BrexitwillimpactadverselyonthesizeoftheUKeconomy.Theseimpactassessmentstypicallyfocusontwomeasures–GrossDomesticProduct(GDP)andGDPpercapita.

Emmersonetal.tabulatetheresultsfromarangeofBrexitimpactstudies.32VirtuallyallprojectareductioninGDPin2030,rangingfrom-1%to7.5%,takingthecentralvaluesoftheindividualforecasts.OnlyoneforecastprojectsapositiveGDPimpact.Theexpectationisthattheeconomywillshrink,andemploymentwillfallasthedemandforlabourdiminishes.Theremayalsobenegativeconsequencesforthegrowthofrealearnings,butthisishardtopredictaspricelevelswillbeimpactedbychangesinexchangerateswhichareverydifficulttomodeloverthemediumtolongterm.Clearlytherehasalreadybeenasignificantdeclineinthevalueofthepound–andrisinginflation–inthewakeofthereferendumresult.

Akeypointtonoteisthattheimpactswillalmostcertainlyvarysignificantlyacrossregionsandlocaleconomies,andthereisacomprehensiveassessmentofthesepotentialimpactsinAthey33 and Centre for Cities.34OneanalysispredictsthatareasintheSouthofEnglandwillbethehardesthit.35

Whatsitsbehindtheseassessments?Productivity,employmentandGDPcanbeimpactedinanumberofwaysthrough:• Shrinkingtradevolumes,• FallingFDI,andpotentiallyalsodecliningdomesticinvestment,and• Reductionsinthemigrantcontributiontotheworkforceandeconomy.

Wediscussthefirsttwoofthesebrieflyinturn.Migrationisexaminedinmoredetailinthenextsectionofthepaper.

Impacts on TradeItisdifficulttoseeanyscenariowhereUKexportswillriseintheperiodaroundtheimplementationofBrexit,unlesstheUKandtheEUcancometoanagreementwheretheUKmaintainsaccesstotheSEM.IftherewereanyadvantagestotheUKfromthedevelopmentofnewtradingrelationshipsthesewouldtakeanumberofyearstobearfruit.Intheshorterrun,thedepreciationofsterlingpost-referendumhasledtonosustainedincreaseinexportsorreductioninimportstodate.36

Thereare,however,clearrisksonthedownsideifexistingtradingarrangementswiththeEUaresignificantlyalteredandleadtoincreasedfrictionstotrade.Thelikelyconsequencesherewouldbeafallinexportsduetonewtariffandnon-tarifftradebarrierswiththeEU.Non-tarifftradebarriersarelikelytogeneratethemoresignificantnegativeimpactsonUKtradeandtheeconomy,asthedevelopmentof

32 Emmerson,C.,Johnson,P.,Mitchell,I.,andPhillips,D.(2016).BrexitandtheUK’sPublicFinances.IFSReport116.InstituteforFiscalStudies.

33 Athey,G.(2017).Brexit:PotentialImpactsforLocalEconomies.MyLocalEconomy.

34 CentreforCities(2017).CitiesOutlook2017.

35 Dhingra,S.,Machin,S.andOverman,H.(2017).TheLocalEconomicEffectsofBrexit.CEPBrexitAnalysisNo.10.LSE.

36 Dhingra,S.andSamson,T.(2017).BrexitandtheUKEconomy.CEPElectionAnalysisEA040,LSE.

theSEMhasbeenassociatedwithsubstantialreductionsinfrictionstointernalEUtradebysimplifyingcustomsprocedures,aswellasharmonisingregulationsandproductstandards.37

Mostanalysesofdifferentpost-Brexittradescenariosaregenerallyextremelypessimistic.Forexample,Dhingraetal.suggestthat:• IftheUKremainsintheEuropeanEconomicArea(EEA)therewillbea1.3%fallinGDPpercapita,

mostlyduetothereturnofthefrictionstotrade(suchasmoreonerouscustomsprocedures)discussedabove.

• IftheUKleavestheEEAandrevertstoWorldTradeOrganisation(WTO)rules,thefallinGDPispredictedat2.6%-butwithsubstantialnegativeimpactsonFDIwhichmaythenimpactmoreseverelyonGDPthanthereductionintrade.38

ImpactsonInvestmentSeveraldifferenttypesofinvestmentmaywellsufferasaconsequenceofBrexit.

ForeignDirectInvestmentFDIhasbeenimportantfortheUKeconomyinmanykeysectors.Forexample,carmanufacturing,whichisahighproductivityandhighearningssector,islargelydependentonforeigninvestmentandownership.TherearesignificantthreatstoFDIshouldtheUKleavetheSEM.• TheUKbenefitsfromthelargestFDIinvestmentofallmemberstates,inpartduetotheeaseofaccess

gainedtotheSEM.Dhingraetal.estimatethattheSEMhasraisedFDItotheUKbyaround28%.39 • TheEUconstitutesthesinglelargestsourceofFDIfortheUK,anditisdifficulttoseetherationalefor

thiscontinuedhighlevelofinvestmentinacountrywithnoaccesstotheSEM.• Dhingraetal.estimatethatleavingtheSEMwillreducetheUK’sFDIby22%overa10-yearperiod,

withmajorimpactsonrealincomesofapproximately£2,200perhousehold.40

DomesticInvestmentDomesticinvestmentmayalsodeclineforreasonssimilartothosediscussedaboveforFDI.Additionally:• LargeUKbusinessesmayinvestincontinentalEuropespecificallytoretainaccesstotheSEM.• Additionally,UKbusinessesmayrelocatesomeorallfacilitiestocontinentalEuropeforsupplychain

and labour supply reasons. ChangesinthelevelofFDIanddomesticinvestmentarealmostcertaintohavesignificantimplicationsforthesectoralbalanceoftheUKeconomy,andcarmanufacturinglooksveryvulnerable,aswellasfinancialserviceswhereFDIisstrong.

Implications for Fulfilling Work

AllofthesechangescombinedcouldimpactnegativelyandsignificantlyontheagendaforfulfillingworkintheUK,unlessdevelopmentsinthewiderglobaleconomyhelpsustaingrowthinaggregatedemandforlabourandsupportrealearningsgrowth.

• Withregardstotheavailabilityofwork,asdiscussedintheprevioussection,asthelabourmarketslackens,theopportunitiesformoredisadvantagedgroupstoaccessworkdecline.

37 Dhingra,S.,Ottaviano,G.,Sampson,T.,VanReenan,J.(2016a).TheConsequencesofBrexitforUKTradeandLivingStandards.CEPBrexitAnalysisNo.2.LSE

38 Ibid

39 Dhingra,S.,Ottaviano,G.,Sampson,T.,VanReenan,J.(2016b).TheImpactofBrexitonForeignInvestmentintheUK.CEPBrexitAnalysisNo.3.LSE.

40 Dhingra,S.,Ottaviano,G.,Sampson,T.,VanReenan,J.(2016a).TheConsequencesofBrexitforUKTradeandLivingStandards.CEPBrexitAnalysisNo.2.LSE.

• Periodsofsignificanteconomicrecession,suchastheearlytomid-1980sandtheperiodsince2008,havebeenassociatedwithrisesinlessdesirableformsofemployment,suchastemporarycontractsandthesubstitutionofconventionalemploymentcontractswithself-employedsub-contracting.Effectively,asdiscussedearlier,rapidandsubstantialreductionsinemploymentsignificantlydisturbthebalanceoflabourdemandandsupply,givingmorepowertoemployerstoofferlessfavourableworkingconditions.

• Thisplacesgreatimportanceontheconstrainingeffectsofemploymentprotectionandotherformsoflabourmarketregulation,whichisdiscussedlater.

• TherearepotentiallydamagingchangestothestructureofemploymentifUKmanufacturingbecomessubjecttosignificanttariffbarriers.Incarmanufactureanditssupplychaintherearemanyskilledmanualworkingjobswhicharefulltimeandhaverelativelyhighaverageearnings.

• Ontradespecifically,Baldwin,CollierandVenablesarguepersuasivelythatanewbroaderbasedtradepolicyneedstobedeveloped,withagreaterintegrationoftradepolicieswithdomesticeconomicandsocialpolicies.Theyrecommendthat:

‘The British government should recognise that globalisation is acting in new ways and that this requiresnewdomesticpolicyresponses.Specificallysinceitismuchhardertoidentifywhowill win and who lose, and since it is basically impossible to determine precise causes (globalisation, demographics, immigration, robots, technology, climate change, etc.), a new social compact needs to accompany Britain’s new trade policy. Education, infrastructure, regional, technological and industrial policies all need to be more nuanced, nimbler and more tightly focussed on helping losers adjust. The key is to focus on helping workers adapt; to protect workers and communities, not particular jobs and sectors’. 41

• Thedeclineinthequalityofjobsislikelytofeedthroughintoreductionsinwellbeingintheworkplace.Agreatersenseofinsecurityislikelytoprevailwithreductionsinlabourdemand.

Ontheflipsidetothesechallenges,itisdifficulttoseeanyopportunitiesflowingfromareductioninemploymentlevelsinrelationtothefulfillingworkagenda.Therecouldbeanopportunityintermsoftheneedtoviewtradepolicy,industrialstrategyandotherhigherleveleconomicperspectivesthroughthelensofimprovinginclusivityinthelabourmarketandeconomy.TheUKgovernmentmaywellwishtoavoidBrexitgivingrisetoanewsetofnegativeemploymentexperiencesincommunitiesalreadyexperiencinghighlevelsofsocialandeconomicinequality.

Issue 2: Changes to Levels of In-migration and Return Migration

Overview and AnalysisMigrationandtheEconomyThereisextensiveevidencetosuggestthatmigrationimpactspositivelyonanumberofkeycharacteristicsof a successful economy. • Itchangesthedemographicbalancetowardsahigherpercentageofworkingagetototalpopulation.• Ithelpsincreaseproductivitythroughintroducingkeyskillsaswellasattractinghighlymotivated

potentialemployees.• Morespecifically,itcanaddresspersistentskillshortages(forexample,IT)orareaswhererecruitment

difficultiesareendemic(forexample,thecaresector).• Itcanleadtoapositivefiscalcontributionwheretaxreceiptsexceeddemandsonpubliclyfunded

servicesandfacilities.

41 Baldwin,R.,Collier,P.andVenables,A.(2017).‘Post-BrexitTradeandDevelopmentPolicy’.PolicyInsightNo.88,CentreforEconomicPolicyResearch.

TheempiricalevidenceonthisisalmostexclusivelypositiveinrelationtotheUKeconomy.• PortesandFortearguestronglythatmigrationhassignificantpositivebenefitsforbothGDPandGDP

percapita.42 • Otheranalysts-forexample,Meager43andMigrationObservatory44-agreeaboutthesignificant

positiveimpactonGDP,butinterprettheevidenceassuggestingsmallergainsorneutralimpactsonGDPpercapita.

• Finally,DustmanandFrattiniestimatethatthereisapositivefiscalcontributionfromEUmigrationofaround£2billionperannum.45

OneverylikelyconsequenceofBrexitisreducedlevelsofmigrationfromEUcountries.Additionally,theremaybeahigherrateofreturnmigrationbasedonchoicesmadebyEUcitizenscurrentlyworkingintheUK.TheanalysisfortheyearendingJune2017showsariseof33,000inthenumberofEUmigrantsleavingtheUKcomparedtotheprevious12months.However,itwasstillthecasethatthenumberofEUmigrantscomingtotheUKgreatlyexceededthenumbersleaving–248,000versus122,000.46

EUMigrantsandtheUKLabourMarketBasedondataforApriltoJune2017therewerenearly2.4millionEUmigrantsworkingintheUK,around7%oftheworkforce.47Thenumbershavegrownsignificantlyfrom590,000in2005,doublingto1.1millionin2008anddoublingagainbetween2008and2016.

Thedifferentmeasurementmethodsforcalculatingmigrationfiguresmakeitacomplexprocesstodeterminemigrationinflowsandoutflowsinagivenquarteroryearwithcertainty.48Forexample,ONSestimatedusingsurveymethodsthat,fortheyeartoendSeptember2016,180,000EUcitizensmigratedtotheUKforwork,butintheyeartoendDecember2016theDepartmentforWorkandPensionsissued626,000NationalInsurancenumberstonon-UKEUcitizens.49Thesesubstantialvarianceshavepersistedfor a number of years.

ItisclearthatEUmigrantsmakeasizeablecontributiontotheUK’slaboursupply,andsopotentiallytherearesignificantimpactsontheabilityofemployerstorecruitshouldimmigrationvolumesdecline.

ThegeneralviewamonganalystsisthatEUmigrationhasbeenlargelypositivefortheUKlabourmarket.Petrongolodrawsanumberofpositiveconclusionsfromtheavailableevidenceandpreviousresearch.50 • Atatimeofdemographicchallenge,EUmigrantshavecontributedtogrowingtheworkingage

population,withtheirshareincreasingfrom1.8%to6.3%overthepast20years.Withinthis,EUmigrantshavehigheremploymentratesthanUKborncitizens.

42 Portes,J.andForte,G.(2017).TheeconomicimpactofBrexit-inducedreductionsinmigration.OxfordReviewofEconomicPolicy.33(S1).

43 Meager,N.(2012).‘Lies,DamnedLiesandMigrationStatistics’.IESViewpoint,Issue15.

44 TheMigrationObservatory(2016).‘ProjectUnclear:Uncertainty,BrexitandMigration’.UniversityofOxford.

45 Dustmann,C.,andFrattini,T.(2014).‘TheFiscalEffectsofImmigrationtotheUK’.EconomicJournal,Vol.124,Issue580.

46 OfficeforNationalStatistics(2017a).SourcesofMigrantStatistics.ONSWebsite.

47 OfficeforNationalStatistics(2017d).EmploymentbyCountryofBirthandNationality.August.Availableonlineat:https://www.ons.gov.uk/employmentandla-bourmarket/peopleinwork/employmentandemployeetypes/datasets/employmentbycountryofbirthandnationalityemp06

48 OfficeforNationalStatistics(2017a).SourcesofMigrantStatistics.ONSWebsite.

49 OfficeforNationalStatistics(2017b).MigrationStatisticsQuarterlyReport,February.Availableonlineat:https://www.ons.gov.uk/peoplepopulationandcommu-nity/populationandmigration/internationalmigration/bulletins/migrationstatisticsquarterlyreport/feb2017

50 Petrongolo,B.(2016a).‘BrexitandtheUKLabourMarket’inBaldwin,R.(ed).BrexitBeckons:ThinkingAheadbyLeadingEconomists.CentreforEconomicPolicyResearch.

• MoststudiesconcludethatmigrantshavenotexertedadownwardpressureontheaverageearningsofUKbornemployees.WorkbyNickellandSaleheendidfindasmallbutstatisticallysignificantnegativeimpactontheearningsofunskilledandsemi-skilledservicesectorworkers.A10%riseintheproportionofmigrantsintheseoccupationswasassociatedwithareductioninearningsofcloseto1.9%.51

• ThereislimitedconvincingevidenceofacausalrelationshipbetweenEUmigrationandthelabourmarketprospectsofUKbornmembersofthelabourforce.Wadsworthetal.findthatthisconclusionholdsattheUKlevelandacrosslocalauthorityareas.52

SectoralVariationsTheemploymentofEUmigrantshasincreasedmarkedlyinspecificsectorsandoccupationsintheUKoverthelastdecade.TheMigrationObservatoryreportedthatbetween2006and2014,theEUmigrantproportionoftheworkforcerosefrom3%to9%inmanufacturing,from7%to12%inaccommodationandfood,andfrom3%to7%inconstruction.Intermsofoccupations,therewasanincreasefrom4%to11%inprocess,plant/machineoperatives,andfrom6%to11%in‘elementary’occupations.53

Meanwhile,RuhsandVargas-Silvanotethatanincreaseintheflowofmigrantstowardslowskilledjobsmayhelpexpandbusinessesandsectorswhichuselowskilledlabourintensively.54Someofthestatisticsontheconcentrationofmigrantsinspecificoccupationsandsectorsin2016areillustratedbelow.Theseappeartobeoccupationsandsectorswithhighdemandsforunskilledandsemi-skilledlabour,andthisaccordswithmostanalysisonthetypesofjobssecuredbyEUmigrantstotheUKlabourmarket.

Table1:OccupationsandSectorswithHighEUMigrant%inWorkforce,2016

Occupation Sector

ElementaryProcessPlantOccs 32 ManufactureofFoodProducts 31

ProcessOps 30 UndifferentiatedGoods 28

Elementary Storage Occs 23 DomesticPersonnel 24

Cleaning+HousekeepingManagers 22 Accommodation 19

ElementaryCleaningOccs 17 Warehousing+SupportforTransport 17

AssemblersandRoutineOps 16 ManufactureofWood+WoodProducts 14

MobileMachineDrivers+Ops 16 ManufactureofLeather+RelatedProds 13

Metalforming,welding+related 15 MiningofMetallicMinerals(Ores) 13

Plant+MachineOperatives 14 ServicestoBuildings+Landscape 13

ElementaryagriculturalOccs 14 WasteCollection,Treatment,Disposal 13

Source: Computed from Labour Force Survey 2016 dataset.

ThistypeofanalysisprovidessomedetailbothintermsofsectoralandoccupationareasatriskifthesupplyofEUmigrantsreduces,andhelpspinpointwherepotentialinterventionsmightberequired,suchassectorand/oroccupationallyspecificskillsinvestmentprogrammes.

51 Nickell,S.,andSaleheen,J.(2015).‘TheImpactofImmigrationonOccupationalWages:EvidenceforBritain’.BankofEnglandStaffWorkingPaper,No.574.

52 Wadsworth,J.,Dhingra,S.,Ottaviano,G.,andVanReenen,J.(2016).‘BrexitandtheImpactofImmigrationontheUK’.CEPBrexitAnalysisNo.5.

53 TheMigrationObservatory(2016).‘ProjectUnclear:Uncertainty,BrexitandMigration’.UniversityofOxford.

54 Ruhs,M.,andVargas-Silva,C.(2016).TheLabourMarketEffectsofImmigration.TheMigrationObservatory,UniversityofOxford

ARecruitmentChallenge?DependingonthespecificchangestoUKmigrationpolicypost-Brexit,therecruitmentchallengeforemployerscouldbemanageable,atleastintheshortterm.• AnnualinflowsofEUmigrantsseekingworkintheUKmaybeaslowasaround200,000iftheONS

estimatesareaccurate.• Theremaybeariskofhigherlevelsofreturnmigration.Recentstatisticssuggestthisisthedirectionof

travel,butthereisstillanexcessofEUimmigrantsrelativetoreturnmigration.• Itisdifficult,whateverthenatureoftheUK’sfuturerelationshipwiththeEU,toseetheUKgovernment

significantlycurtailingtheinflowofskilledEUmigrants,althoughtherearefearsthattherewillbeareductioninthenumbersofskilledEUmigrantswishingtocometo,orremainin,theUK.

• EveniftheUKgovernmentwere,forthesakeofargument,tohalveEUmigrantflowstocutbackonthenumbersgoingintolowskilledjobs,thereductionof,say,100,000peryearshouldnotconstituteaseriousshockintheshorttermtoaUKlabourmarketmadeupofaround30millionjobs.However,specificlocalities,sectorsandemployerscouldbehardhit.

Clearlyoverthemediumtolongerterm,iftherearesustainedreductionsininflowsfromtheEU,andhigherratesofreturnmigration,thelossestotheUKlaboursupplywillbecomemuchmoresignificant–butthereshouldbetimetoadjusttotheseinthewaysdescribedbelow.

SectorsandemployerswithaparticularlyhighlevelofdependenceonEUmigrantswillhaveanumberofoptionsintermsofhowtheyadaptifthereisincreasedreturnmigrationalongsideareducedinflowofnewEUmigrants.55 • Theymaytrytosubstitutetechnologyforlabour.• TheycanupskillandrecruitexistingUKworkerstofillvacanciesthatwouldotherwisehavebeenfilled

byEUmigrants.• Theycanincreasewagesandimproveconditions–withinlimitsinprice-competitiveproductmarkets–

toattractmoreUK-bornrecruits.• Theycanrelocatetoothereconomies–althoughthisisconstrainedforbusinessesengagedinmany

servicesectors.Inthesamevein,theycouldoutsourceprocesseswhichtheynowfinddifficulttodeliverdirectly.Publicsectoremployersdonothavetherelocationoption,andwouldfindthemselvesconstrainedintermsofoutsourcing.

Ofcourse,otheroutcomesformoreseverelyimpactedbusinessesaredownsizingorworse.Clarkenotesthat‘Firms in migrant-reliant sectors…..will need to fundamentally re-think their business models or risk closure.’ 56

Daviessuggeststhatsomeemployersfacingshortagesoflabourinlowskilledsectorsarenowacceptingthattheyhadbecome‘too blinkered in their recruitment strategies in the last decade’. 57Someoftheseemployersarenowexploringtherecruitmentpotentialfromgroupscurrentlylesswellrepresentedinthelabourmarket,suchasex-offenders.Theyarealsopreparingtoraisepaylevelsandskillsinvestmenttohelprecruitnewworkers,butmoreimportantlyprogressandretainexistingmembersoftheirworkforces.

55 Meager,N.(2016).‘UKEmploymentandBrexit:TheIssues’.IESViewpoint,Issue24.

56 Clarke,S.(2016).‘ABraveNewWorld:HowReducedMigrationCouldAffectEarnings,EmploymentandtheLabourMarket’.ResolutionFoundationBriefing.

57 Davies,G.(2017).‘Theunder-representedbenefitofBrexit?’CIPDVoice,Issue8.

Implications for Fulfilling Work AvailabilityofWorkTherearesubstantialnumbersofpeopleintheUKwhopotentiallystandtobenefitfromanincreaseinhardtofillvacanciesresultingfromareducednumberofEUmigrantsintheworkforce.Forexample:• FortheperiodJunetoAugust2017,therewereover1.4millionunemployedpeople,usingtheLabour

ForceSurveydefinitionofactivelyseekingandavailabletotakeupwork.58Manyofthesewillsecureanunfilledvacancyrelativelyquickly,butthebalancewillgoontobecomelong-termunemployed.Inatighterlabourmarket,theproportiongoingontolong-termunemploymentwilltendtofall.

• Althoughthereissomeoverlapwiththeunemployedcount,inFebruary2017over3.8millionworkingagepeoplewereinreceiptofDWPoutofworkbenefitssuchasEmploymentandSupportAllowance(ESA).59Manyofthesearepeoplewithhealthanddisabilityissues,someofwhomwiththerightsupportpackagescouldfindandsustainwork.

• Whileagainnotingissueswithoverlappingcategoriesofworklesspeople,fortheperiodApriltoJune2017therewerenearly800,00018to24yearoldsnotineducation,employmentortraining(NEET),around1in10ofallintheagegroup.60

• Finally,asnotedearlier,therearegroupsofthepopulationwithemploymentratessignificantlybelowtheaverage.Theseincludedisabledpeopleandthosewithlowornoeducationalqualifications,whocouldbesupportedwithwell-resourcedandintelligentlydesignedemployabilityprogrammestosecureunfilledvacanciesinthelabourmarket.

GreggandGardinerarguethataround2millionpeoplefromgroupswithbelowaverageemploymentratescouldbeaddedtotheactiveUKworkforcewithreformstothecurrentapproachestoemploymentservicedesignanddelivery,tobringaboutgenuinefullemploymentby2020/21.61Thiswouldamounttoanannualadditionofaround400,000totheactiveworkforceovertheperiodto2021.ThiscouldcomfortablyexceedanyreductionsinEUmigrantsenteringtheUKlabourforce.

However,itisclearthatBrexitalsobringsthreatswithregardstotheavailabilityofemploymentintheUK.AlthoughtheacademicconsensusisthatEUmigrantshavenotimpactedontheearningsandemploymentprospectsofUKbornworkers,theseworkerswillbeemployedsidebysideinthekindsofsectorsandoccupationsshowninTable1.IfemployersstruggletoretainandrecruitsufficientworkersduetochangesinEUmigrationrules,someofthesejobsmaydisappear–throughtheoff-shoringofjobs,increaseduseoftechnology,orsimplyreductioninactivityoroutrightclosureforsomeemployers-withknock-onnegativeconsequencesforUKbornlabour.Thesejobsappeartobedisproportionatelyinlowskilledoccupationsandsectorsandsoareductioninthevolumeofthesejobs,ifitoccurs,willimpactmostonthosealreadydisadvantagedinrelationtoaccesstoemployment.

Itisimportanttonotethatthereisasignificantpolicyissuehere.TheUKhastoomanypoorqualityandlowpayingjobs,asmanifestedinthepolarisationoftheUKlabourmarketoverthelast25yearsorso.Sumptionposessomeinterestingpolicychoices.62

58 OfficeforNationalStatistics(2017e).TheUKLabourMarket:October2017.Availableonlineat:https://www.ons.gov.uk/employmentandlabourmarket/peoplein-work/employmentandemployeetypes/bulletins/uklabourmarket/october2017

59 DWP(2017).QuarterlyBenefitsSummary,August.

60 OfficeforNationalStatistics(2017f).YoungPeopleNotinEducation,EmploymentorTraining:August2017.Availableonlineat:https://www.ons.gov.uk/employ-mentandlabourmarket/peoplenotinwork/unemployment/bulletins/youngpeoplenotineducationemploymentortrainingneet/august2017

61 Gregg,P.,andGardiner,L.(2016).TheRoadtoFullEmployment.ResolutionFoundation.

62 Sumption,M.(2017).LabourImmigrationafterBrexit:Trade-offsandQuestionsaboutPolicyDesign.TheMigrationObservatory:UniversityofOxford.

ShouldtheUKgovernment:• Putabigeffortintosustainingcurrentlevelsoflowpayingemploymentin,say,areasofagriculture

andhorticultureheavilydependentonEUlabour,orsimplyseeshrinkagesinthesesectorswithimportsmakinggoodtheshortfall?

• Raisemorefundingforadultcareservicestoprovideabetterqualityservicedeliveredbybetterpaidworkers,asopposedtotheexistingservicelargelydependentonlowwagedlabourincreasinglydrawnfromabroad?

LevelsofPayMuchoftheevidencebasesuggeststhatEUmigrationhashadlimitedimpactsinthelabourmarketinrelationtotheexperiencesofUKbornmembersofthelabourforce.Theimplicationofanumberofthestudies–althoughoftennotclearlystated–isthatUKbornworkersoperatingatlowerskilllevelsareonaveragesimplynotascompetitiveasEUmigrantsintermsofproductivityandwagedemands.ThismeansthatEUmigrantsareoftennotsubstitutingdirectlyforUKbornworkers.

Nevertheless,inprinciple,thereducedflowofmigrantstolowskilledjobscouldleadtoimprovedwages63 andotherconditionsasemployerstrytocopewithrecruitmentproblems,particularlyinsectorsandlocalitieswithahighdependenceonEUmigrantlabourandoperatingintighterlabourmarketareas.However,asMeagerhasargued,employersmayhaveto:• Offerlongerhours,bettercontractsandbetterpay.• Investmoreinskills.64

Thereis,however,noconsensusviewonthisandotheranalystsarescepticalaboutthepotentialbeneficialeffectsonjobqualitythroughhigherearningsatthelowerendofthelabourmarket,basedonthehistoricalassessmentoftheimpactofimmigration.65

SkillDevelopmentTheexpectationisthattherewillbepushbackbytheUKgovernmentintheformofmeasurestoreduceEUmigrationgoingforward,anditislikelythatgreaterweightwillbegiventoreducingmigrationintolowskilledjobswhichwillbefilledmoreeasilybyUKbornworkers.Thefocusthenneedstobeforwardlooking,withanemphasisonraisingtheemployabilityandskillsofUKbornworkerssothattheywouldbeattractivetoemployersandprovetobeeffectiveemployeesinjobsinbusinessesandsectorswhichwillbeexposedastheEUmigrantlaboursupplyshrinks.

TheCharteredInstituteofPersonnelandDevelopment(CIPD)highlightdeclininginvestmentinvocationaltrainingbyUKemployerssince2005,comparedtoincreasedskillsinvestmentbykeyEuropeancompetitorssuchasFranceandGermany.FrenchemployersnowinvestinskillsnearlyfourtimesasmuchastheirUKequivalents,andGermanemployersmorethantwiceasmuch.WenotedearlierreportsthatsomeCIPDmembersacceptedthattheyhadbeentoocomplacentintheirrecruitmentstrategiesoverthelastdecadeduetoplentifulsuppliesofmigrantlabourandwerenowurgentlyre-thinkingtheirposition,

63 Bell,T.andClarke,S.(2017).‘EndofanEra.’InClarke,S.(ed).WorkinBrexitBritain:reshapingthenation’slabourmarket.ResolutionFoundation;Bell,B.,andMachin,S.(2016).‘BrexitandWageInequality’.InBaldwin,R.(ed).BrexitBeckons:ThinkingAheadbyLeadingEconomists.CentreforEconomicPolicyResearch;Petrongolo,B.(2016b).‘BrexitandtheUKLabourmarket.’CentrePiece,Autumn;Portes,J.(2016)‘Immigration–theWayForward’inBaldwin,R.(ed).BrexitBeckons:ThinkingAheadbyLeadingEconomists.CentreforEconomicPolicyResearch.

65 Clarke,S.(2016).‘ABraveNewWorld:HowReducedMigrationCouldAffectEarnings,EmploymentandtheLabourMarket’.ResolutionFoundationBriefing;Petrongolo,B.(2016a).‘BrexitandtheUKLabourMarket’inBaldwin,R.(ed).BrexitBeckons:ThinkingAheadbyLeadingEconomists.Centrefor EconomicPolicyResearch.

particularlyinrelationtolowerskilledvacancies.Increasinginvestmentinskillsandinpaylevelswerenowbeingactivelyconsidered.

Ofcourse,employerswillalsobelikelytoconsidertheoptiontointroducemoreautomatedprocessestoreducetheneedforlowerskilledlabour.Thisraisesinterestingissuesaboutthereturnstoemployersoninvestingincapital,relativetothepotentialneedforrelativelymodestinvestmentinupskillingforjobsthatrequirequitelimitedskilllevels.Meagerisconcernedthatinvestmentinlowleveltechnologiestoreplaceunskilledlabourwillsimplycontributetothelowskills/lowproductivityequilibriumalreadyentrenchedinsomeUKregionsandsub-regions.66

JobQualityItwasarguedearlierthatwhenlabourmarketstightendueto,say,robusteconomicgrowth,jobqualitytendstoimprove–andviceversainarecession.Ifsomeofthecommentaryaboveiswellfounded,reducedlaboursupplymighthavesimilareffects.

Forexample,ifthelowerendofthelabourmarkettightens,employersmayneedtobemoremindfulofemployeemoraleandwellbeingiftheyaretoattractandretainthem.Thismayencouragethemtoconsultmorewiththeiremployeesandtotrytounderstandfactorswithintheircontrolasemployersthatareimpactingonthejobsatisfactionoftheiremployees.

Issue 3: Changes in Employment Protection Laws and Regulations

OverviewandAnalysisTherearearangeofEUregulationswhichimpactonaspectsoffulfillingworkintheUK.Theseincluderegulationsaroundemploymentprotection,healthatwork,workinghours,anddiscriminationintheworkplace.

Pre-EUentry,theUKhaditsownlegislativeframeworkwhichimpactedonfulfillingworkinanumberofways–forexample,thelongtraditionofhealthandsafetyregulation,drivenbycampaigningbythetradeunionmovement.ItwasnotedearlierthattheUKhasgoodoutcomesinrelationtoworkplacehealthandsafetybyOECDstandards.Klossnotesthatemployerlegalobligationsinrelationtothehealth,safetyandwelfareofemployeeswereembeddedbeforeUK’sentrytotheEU,andthattheUK’sHealth&SafetyatWorkAct1974hasbeencopiedinanumberofcountries.67

However,KlossalsoarguesthattheEUaddedsignificantlytothebatteryofprotectionsforhealthandsafetyintheworkplace,particularlyinrelationtoriskassessment,controlofhazards,themonitoringofcontrols,andinformationandtraining.Intermsofthebroadspectrumofemploymentprotectionmeasures,mostanalystsandcommentators68arguethatemploymentrightsforUKworkershaveimprovedsignificantlyoverthelongtermduetoawiderangeofEUtreatyprovisionsanddirectives.Theimprovementsrelateparticularlyto‘atypical’workers(whoseemploymentrelationshipslieoutsidethe‘norm’offull-time,regularand‘permanent’employmentwithasingleemployer),rightsandprotectionsforwomenandotherdiscriminatedagainstgroupsandtherighttopaidholidays.Asaresultofthe

67 Kloss,D.(2016).‘Brexit–WhatNextforOHLaw?’OccupationalHealthatWork.13(2).

68 Kloss,D.(2016).‘Brexit–WhatNextforOHLaw?’OccupationalHealthatWork.13(2);ScottishUniversitiesLegalNetworkinEurope(2016).EmploymentLaw;Suff,R.(2016).‘WhatWillBrexitMeanforUKEmploymentLaw?’CIPDPublicPolicyblog.

WorkingTimeDirective,forexample,importantgainshavebeenmadeforquitesubstantialnumbersofUKemployeeswhodidnotformerlyenjoypaidholidays.Thisisclearlyanimportantbenefitintermsofenhancedjobquality.

Apointtoconsideristhattheseprotectionsareessentiallymitigatinganumberoftheundesirableconsequencesof‘atypical’employment,asopposedtocontrollingtheirgrowth.Asnotedearlierinthisreport,theUKhasseenasubstantialgrowthinzerohourscontracts,andtheseaveragedaround900,000in2016.Thereisalsoaperceptionofgrowthinsomeformsofso-called‘bogusself-employment’,butthereisnoreliablestatisticalevidenceontheextentofthisphenomenon.Additionally,asnotedearlier,thisformofself-employmentisnotrestrictedtothelowerregionsofthelabourmarket.

Itisalsoimportanttonotethatinternationalanalysisplacesastrongweightontheroleoflabourmarketinstitutionsinmitigatingtheforcesdrivingpolarisationoflabourmarketsandreductionsinjobquality.Thisisparticularlyimportantforworkersinthelowerpayendofthelabourmarket.TheUKiscurrentlycharacterisedbyrelativelyweaklabourmarketinstitutionsbyinternationalstandards,whichisexploredinmoredetailinSection4.

Inaddition,someoftheearlypost-referendumrhetoricfromtheUKgovernmentaboutmakingtheUKmorecompetitiveintermsofcorporatetaxationhasraisedfearsthatthismightextendtoreducingawiderangeofotherconstraintsoncorporatebehaviour–suchasemploymentprotectionlegislation.

LikelihoodofChangeThecurrentpositionoftheUKGovernmentistoconsolidateexistingEUregulationsinUKlawbymeansofTheEuropeanUnion(Withdrawal)Bill.EUdirectivesarealreadybuiltintoUKlawthroughprimarylegislation,andconsequentlychangescanonlybemadeafterfullparliamentaryscrutiny.

Foravarietyofreasons,thethreatofanimmediateweakeningofUKemploymentprotectionsfollowingtheUK’sexitfromtheEUmaybelimitedduetothefollowing:• TherecanbenochangesuntiltheUKformallyleavestheEU.• Asnotedabove,muchoftheemploymentprotectionlawwhichhascomedownfromtheEUisalready

embodiedinUKprimarylegislation,andaroundthissitsasubstantialbodyofcaselawhandeddownbytheUKcourts,interpretingEUdirectivesandEuropeanCourtofJusticerulings.69BothParliamentandtheUKcourtswillbecentrallyinvolvedinanyattemptstoweakenthelegalbasisfortheseprotections.

• TheremainingbodyofEUemploymentprotectionregulationsandlawswillbetranslatedintoUKlawthroughTheEuropeanUnion(Withdrawal)Bill.AlthoughthereisgreatdisquietaboutthepotentiallylimitedroleofParliamentindebatingandscrutinisingchangestothisbodyoflegislation,thescaleandcomplexityofthetaskofreviewingandbringingforwardschangesdictatesaverylengthytimescalefortheprocess.70

InthemediumtolongertermanyUKgovernmentwishingtoreduceemploymentprotectionfacesamassiveandcomplextask,andmaybecomeembroiledinmanycourtcases.Italsohastobalancetheuncertaineconomicbenefitsofreducedemploymentprotectionagainsttheneedtostriketradedeals

69 Suff,R.(2016).‘WhatWillBrexitMeanforUKEmploymentLaw?’CIPDPublicPolicyblog

70 ibid

withothercountriesandgroupingofcountries–principallytheEU–wherethemaintenanceofhighlevelsofemploymentprotectionwill,formost,beanessentialrequirement.ThismayinpartexplainwhythePrimeMinisterhaspromisedthatexistingprotectionsforworkerswillbeguaranteedwhilesheremainsinpost.

WhatRightsCouldbeatRisk?Despitetheselimitingfactors,concernremainsthatmanyoftheexistingprinciplesgoingintoTheEuropeanUnion(Withdrawal)Billcouldinduecoursebeabandonedorweakened,essentiallyatthediscretionoftheExecutive.Underlyingthisconcernisarecognitionthatanyreductioninemploymentprotectionlawsandregulationswouldrepresentaweakeningofthesuiteofinstitutionalcontrolsofthelabourmarket,whichhavebeenshownininternationalstudiestobenefitthosetrappedinthelowerreachesofthelabourmarket.ConcernsalsoarisefromtheoppositionofpreviousUKgovernmentstopositivedevelopmentsaroundemploymentrights–suchastheWorkingTimeDirective.

TheTUCisdeeplyconcernedaboutthepotentialdamagetowhatarenowestablishedworkers’rights.Legalopiniontheysoughtidentifiedthefollowingkeyrightswherethereispotentialvulnerability:• Collectiveconsultation,includingtherightforworkers’representativestobeconsultedwheremajor

plannedchangescanimpactonpeople’sjobsorresultinredundancies.• Workingtimerules,includinglimitsonworkinghoursandminimumentitlementsontheamountofpaid

holidays.• EU-derivedhealthandsafetyregulations.• TransferofUndertakings(TUPE),whichoffersprotectionstothetermsandconditionsofworkerswhere

anorganisationorserviceistransferredoroutsourcedtoanewemployer.• Protectionsforagencyworkersandother‘atypical’workers,suchaspart-timeworkers.Suffalsoraises

concernsinrelationtothesegroupsofworkers,astheEUhastakenastrongleadinimprovingtheirprotection.71

• Compensationlevelsfordiscrimination,includingequalpayawardsandagediscrimination.72

Asnotedearlier,theevidenceisthattheEUhassignificantlyimprovedprotectionsaroundhealthandsafetyatwork,althoughtheUKhasastronghistoricaltrackrecordinlegislatingforthis.TherearecurrentthreatsintheUK,however,withthepublicsectorcontributiontothebudgetoftheHealthandSafetyExecutivefallingfrom£231millionin2009/10to£123millionin2019/20.73

Alsointermsofagencyworkerprotections,theEUintroducedimportantregulationsabouttheiraccesstokey‘collectivefacilities’suchastrainingandchildcare.ThesewereresistedbytheUKgovernmentandwereunpopularwithemployers,andcouldbevulnerablewhenthegovernmentcomestoreviewtheposition.74

Amorepositivenoteisstruckinsomeothercommentaries,particularlyfromindustrybodies:• Inasituationofgreatuncertainty,businessesandbusinessorganisationsarelookingforstabilityin

termsofemploymentprotectionlawsandregulations(forexampleCBI).75Thispositionwasre-statedin

71 Suff,R.(2016).‘WhatWillBrexitMeanforUKEmploymentLaw?’CIPDPublicPolicyblog.

72 Ford,M.(2016).Workers’rightsfromEurope:theimpactofBrexit.TradesUnionCongress

73 Warburton,C.(2016).‘HSEBusinessPlanRevealsFurtherBudgetCuts.Health+SafetyatWork,April.Availableonlineat:https://www.healthandsafetyatwork.com/hse/business-plan-reveals-further-budget-cuts

74 Ford,M.(2016).Workers’rightsfromEurope:theimpactofBrexit.TradesUnionCongress

75 CBI(2016).MakingaSuccessofBrexit.

consultationscarriedoutinthepreparationofthisreportwiththeCBI,FederationofSmallBusinessesandBritishChambersofCommerce.

• CIPDnotethatonly13%ofSMEssurveyedreportemploymentprotectionlegislationasabarriertotheircompetitiveness.76

FutureImprovementstoEmploymentProtectionAnadditionalconcernabouttheimpactofBrexitonemploymentlegislationisthatfutureimprovementsinemploymentprotectionemanatingfromtheEUmaynotbeappliedintheUKpost-Brexit.However,asignificantconstraintontheUKgovernment’sabilitytoreduce,orindeedfailtoimprove,employmentprotectionsistheneedtosignuptothecreationandmaintenanceof‘levelplayingfields’inthenegotiationofagreementsonthetradeingoodsandservices.Tradeagreementsincreasinglyhaveafocusonminimising‘socialdumping’inadditiontothetraditionaldumpingofproductsatartificiallylowprices.TheInternationalLabourOffice(ILO)notesthatsocialandlabourprovisionsfeatureinbilateraltradeagreements,particularlywhereCanada,theEUandtheUnitedStatesarepartiestotheagreements.77Morespecifically,theEU’schiefBrexitnegotiator,MichelBarnier,hassaidtheEUwillrefusetosignatradedealwiththeUKwhichinvolves‘unfaircompetition’duetoreductionsinenvironmentalandsocialprotections,includingworkers’rights.78

AvailabilityofWorkDuringtheEUReferendumcampaign,theUKGovernmentEmploymentMinisterarguedthatscrappingEUemploymentregulationswouldboosttheeconomyandcreate60,000newjobs.

Itishardtofindtheevidentialunderpinningthatwouldpredictsuchasignificantincreaseinemploymentthroughaprocessofderegulation.Inanyevent,itappearsthatinrelationtoemploymentprotectionlegislation,andalsoproductmarketregulation,thattheUKalreadyhasthemost‘competitionfriendly’regulatoryregimeacrosstheOECD.79CraftsalsoarguesthatthepotentialareasforderegulationwouldnotimpactsignificantlyontheproductivityperformanceoftheUKandsubsequentlyonGDPpercapita.80

Separately,EUregulationshavebeenparticularlyimportantinextendingsignificantlythepotentialfortacklingdiscriminationintheworkplaceregardingfundamentalissuessuchasequalpayforequalvalueofwork.TheseregulationshaveasignificantimpactonlargenumbersofworkersintheUKandareparticularlyimportantforthosegroupsofworkersatriskofthegreatestdiscriminationinaccessingemployment.

ProcurementandFulfillingWorkFromanopportunitiesperspective,theremaybesomescopeforleverageinrelationtolegalframeworksoutsideofemploymentprotection,wheretheUK’sexitfromtheEUmaysupportpositiveprogressonfulfillingwork.Procurementisagoodexamplehere.

76 CIPD(2015).EmploymentRegulationandtheLabourMarket.

77 ILO(2017).‘FreeTradeAgreementsandLabourRights’.Availablefrom:http://www.ilo.org/global/standards/information-resources-and-publications/free-trade-agreements-and-labour-rights/lang--en/index.htm

78 TheIndependent(2017).‘Brexit:EUwon’tsigntradedealifUKstartsderegulationracetothebottom,Brusselswarns’.TheIndependent,20thJuly.Availableonlineat:http://www.independent.co.uk/news/uk/politics/brexit-eu-trade-deal-workers-rights-tax-haven-michel-barnier-environmental-legislation-a7851761.html

79 Barnes,S.,Bouis,R.,Briard,P.,Dougherty,S.andEris,M.(2013).‘TheGDPImpactofReform:ASimpleSimulationFramework’.OECDEconomicsDepartmentWorkingPaper,No.834.

80 Crafts,N.(2016).‘Brexit:LessonsfromHistory’.InBaldwin,R.(ed).BrexitBeckons:ThinkingAheadbyLeadingEconomists.CentreforEconomicPolicyResearch.

• EUprocurementdirectivesandregulationsareheavilybasedonensuringanopenmarketacrosstheEU,reducingthescopeformemberstategovernmentsandotherauthoritiestofavourdomesticcontractors.

• Thereisastrongtradition,mostpronouncedinScotland,intryingtodevelopthecontributionofprocurementtotacklingsignificantpolicyobjectivesinareassuchasemployabilityandinequality.BigstepshavebeenmadeinScotlandinrelationtodevelopingtheconceptofandlegislatingforCommunityBenefitinProcurement,andtherehavealreadybeenevaluationsoftheeffectivenessofimplementation.81However,thislegislationhadtobeextremelycarefullydraftedsoasnottofallfoulofEUprocurementstrictures.

• Conceivably,procurementcouldbeusedmoreproactivelyacrosstheUK,postBrexit,tofavourcontractorswhoprovidefulfillingworkopportunities,sohelpingdriveimprovementsinfulfillingworkfromthedemandside.However,akeyconstraintwouldbethe‘levelplayingfield’restrictionswhichwillneedtobeacceptedtosealforeigntradeagreements.

Issue 4: Impacts on European Structural Funds

OverviewandAnalysisTheEUStructuralandInvestmentFundsaremainlycomprisedoftheEuropeanRegionalDevelopmentFund(ERDF)andtheEuropeanSocialFund(ESF),accountingfor,intheUK,around78%ofthetotalfundsreceived.Thenextlargestcomponentataround20%istheEuropeanAgriculturalFundforRuralDevelopment(EAFRD).ThevalueofthestructuralfundscomingtotheUKhasfallenquitesubstantially,particularlywiththeaccessionofanumberofEasternEuropeanmemberstates.Forthe2014-2020programmingperiod,thetotalvalueofthefundsprovidedbytheEUis£13.9billion,withUKmatchfundingof£9.2billion.

ERDFisfocussedprimarilyoninnovationandresearchandsupportforSMEs,butwithprioritiesalsoaroundthedigitalagendaandlowcarboneconomy.Clearly,supportforSMEscouldbeextremelyimportantintermsofrespondingtosignificantchangeswithinkeysectorsinthefaceofuncertaintyandchangesaroundtradingarrangements.

TheESFisfocussedmoreonemploymentandlabourmarketissues.Formanyyearsithasunderpinnedthedeliveryofemploymentservices,particularlythosetargetingpeoplefurtherfromthelabourmarket,andthoseinthemoreeconomicallydepressedregionsoftheUK.Muchoftheservicedeliverycomesthroughthirdsectororganisationswhichtendtobemoreexpertinenhancingaccesstoworkformoredisadvantagedgroupsinthepopulation.TheESFallocationfortheUKforthe2014-2020programmingperiodis£8.7billion,but£4.0billionofthisisco-fundedbyUKgovernments,agenciesandotherrelevantauthorities.82

TheUKgovernmenthasundertakentocompensateforanyshortfallinEUfundingbetweenthepointofleavingtheEUand2020.83Thisgivestimeforadjustmentstobemadeandfornewapproachestobedrawnup.However,organisationsinthevoluntarysectorhavevoicedtheirconcernsaboutthepotential

81 Sutherland,V.,Glass,A.,McTier,A.andMcGregor,A.(2015).Analysisoftheimpactandvalueofcommunitybenefitclausesinprocurement.ScottishGovern-ment.

82 EuropeanCommission(2017).ESFBudgetbyCountry:2014-2020.Availablefrom:http://ec.europa.eu/esf/main.jsp?catId=443&langId=en

83 Gov.UK(2017).‘ChancellorPhilipHammondGuaranteesEUFundingBeyondDateUKLeavesEU’.Availablefrom:https://www.gov.uk/government/news/chan-cellor-philip-hammond-guarantees-eu-funding-beyond-date-uk-leaves-the-eu

lossfrom2020ofthemonieswhichhaveflowedtothemthroughESFinparticular.84Nevertheless,asalmosthalfofthemoneygoingintoESFisfundingprovidedbyUKbodiesasopposedtoEU,thereiseveryopportunitytomakeacaseforthecontinuationofthisfundingforsomesimilartypeofprogramme.ItisessentiallywithinthegiftoftheUKgovernment.

AvailabilityofWorkThethreatsarisingfromthelossofEuropeanStructuralFundsfallprimarilyintheareaofavailabilityofwork,andmorepreciselyaccesstowork,forthemoredisadvantagedgroupswhichhavetraditionallybeensupportedbyspecialistemployabilityservicesfundedthroughESF.Thesehavesometimesbeenstandalone,andoftenquiteinnovative,approachestohelpingthosefurtherfromthelabourmarketbackintowork.

Additionally,ESFhasbeenusedtoalignwith,andaddvalueto,moremainstreamemploymentprogrammesrunbytheUKgovernment,anddevolvedgovernmentsinotherpartsoftheUK.

TheclosureofESFwouldhavetwosignificantimpacts:• TheemployabilityserviceavailabletothemoredisadvantagedjobseekersacrosstheUKwouldbe

muchdiminished.ThisisinacontextwheretheUKgovernment’snewWorkandHealthprogramme(whichappliesonlytoEnglandandWales)isgoingtobeassociatedwithasignificantreductioninspecialistemploymentsupportforjobseekerswithhealthanddisabilityissues.In2017,supportwillbeavailableforonly160,000clientscomparedto300,000in2013/14.85

• Manyoftheorganisationsdeliveringtheseservicessitinthethirdsector,andmanyofthesearedeliveringemployabilityservicesalongsidearangeofothersupportservicesforsomeoftheUK’smostdisadvantagedgroupsandcommunities.ThelossofESFmoniesmaysignificantlydepletethecapacityoftheseorganisationstodeliverservicesinasustainableway.

However,evaluationsofESFandStructuralFundsmoregenerallydonotsuggestthatthefundinghasmadeasignificantimpact.BellconcludesthatthereislimitedempiricalsupportfortheideathattheStructuralFundshaveimpactedpositivelyonregionaleconomicactivity,forexample.86Additionally,someoftheevaluationevidencehighlightsfeedbackfromdeliveryorganisationsinreceiptoffundingwhichsuggeststheESFishighlybureaucraticandoneroustoadminister.87Finally,thereareconcernsthatthemethodsforassessingtheeffectivenessandvalueformoneyofESFarenotsufficientlyrobust.88

OpportunitiesforImprovementIftheUKgovernment–aswellasdevolvedadministrations–canbepersuadedtomaintainafundsuchasESF,makinggoodthelossoftheEUcontribution,thereispotentialtousethismoneymuchmorecosteffectivelythanwaspossibleunderthemanagementbytheEuropeanCommission.• AsERSApointout,itiscriticallyimportantfortheUKtoensurethatthefundingavailabletotheUK

84 NCVO(2016).‘FourMonthson–PotentialImplicationsofBrexitfortheVoluntarySector’.NCVOBlog.

85 ERSA(2016).‘WorkandHealthtopoftheagenda?Butwhere’sthecash?’ERSABlog

86 Bell,D.(2017).RegionalaidpoliciesafterBrexit.OxfordReviewofEconomicPolicy.33(S1).

87 HouseofLords(2010).MakingitWork:TheEuropeanSocialFund.EuropeanUnionCommittee;ERSA(2017).EvidenceonBrexitandtheLabourMarket.HouseofCommonsWorkandPensionsCommittee.

88 McGregor,A.,andSutherland,V.(2012).FinalSynthesisReportonAccesstoEmployment.ESFExpertEvaluationNetwork.EuropeanCommission,Brussels.

throughESFforthe2014-2020programmingperiodisfullyallocatedtospecificemploymentservicedeliverypriortoleavingtheEU.89

• ThereisabigopportunitytoachieveamuchmoreeffectiveuseofthefundsthaniscurrentlythecasewithESF.Significantchangescouldbemadetoreducetheveryheavyburdenofadministrationandauditingrequirements.Theseproveextremelyonerousfor,inparticular,smallerthirdsectororganisations,anditisthesetypesoforganisationwhichareparticularlyadeptathelpingmoredisadvantagedgroupsandpeoplefrommoredisadvantagedcommunitiesintowork.90

• Thereisalsoscopetobringaboutamuchbetterintegrationofemployabilityandemployability-relatedservices(suchashealthservices),aswellastopooldifferentsourcesoffunding,toprovideamuchmoreeffectiveserviceandgreatervalueformoneyforhardertohelpindividualsandgroupsinthelabourmarket.Thisisalreadybeginningtohappendrivenbythedevolutionofmanyrelevantpowerstocityregionsandotherregionalpartnerships.91

89 ERSA(2017).EvidenceonBrexitandtheLabourMarket.HouseofCommonsWorkandPensionsCommittee.

90 ERSA(2016).WorkandHealthtopoftheagenda?Butwhere’sthecash?ERSABlog;ERSA(2017).EvidenceonBrexitandtheLabourMarket.HouseofCommonsWorkandPensionsCommittee;McHugh,K.(2017).IfBrexitmeansBrexit,whatdoesitmeanforthelabourmarket?ERSABlog.

91 Waite,D.,McGregor,A.andMcNulty,D.(2017).InclusiveGrowthandCityDealsBriefing.JosephRowntreeFoundation.

5. Mitigating threats and exploiting opportunties

Thediscussioninthisfinalsectionofthereportisconductedundertwoheadings:• ActionsthatcouldbetakentopromotefulfillingworkirrespectiveofwhetherBrexitgoesaheadand

independentlyofthetypeofBrexit,forexample‘hard’versus‘soft’.• ActionswhichcanbetakeninresponsetospecificthreatsoropportunitiesasaresultofBrexit.

General Actions to Promote Fulfilling Work Thereisanextensiveliteratureinthebroadareaofjobquality,andsomeofthemajorexpertsinthefieldhavebroughtforwardproposalsforimprovingtheUK’sposition.92Itisbeyondthescopeofthisreporttodescribeandassessthese.ThekeypointisthatthemanypotentialriskstofulfillingworkarisingfromBrexitsetoutinearliersectionsofthisreportincreasetheurgencyforaction.Anysystematicplanofactiontopromotefulfillingworkmustaddressboththedemandandsupplysideofthelabourmarket.

ActionsontheDemandSideoftheLabourMarketAprominentfeatureoftheUKlabourmarketoverthelastdecadehasbeentheriseofinsecureworkingconditions,includingzerohourscontractsand‘bogusself-employment’.

TheTaylorReviewmadeawiderangeofrecommendationsonhowbesttorespondtothegrowthofpoorwork.Themoreimportantrecommendationscalledfor:• Clarificationofthelegaldefinitionsof‘employee’,‘worker’and‘self-employed.’• Greaterequalityoftreatmentbetweentheemployedandtheself-employedintermsoftaxtreatment,

butalsoaccesstostate-basedentitlements.• Holidayandsickpaytobeavailabletoalllowpaidworkersinthe‘gigeconomy.’• Equalpayforagencyworkers.• Thecreationofanationalstrategytomakegoodworkavailabletoall.93

TheTUCfeltthattheTaylorReview’srecommendationswereinsufficientlyradicalinthelightofthesignificantgrowthovertimeinpoorwork,andthemanycostsassociatedwiththis.94

Moregenerally,governmentanditsagenciesneedtodeveloparobustandstrategicresponsetothoseemployerspursuingabusinessmodelwhichentailsrelativelylowskilledandpoorlyrewardedwork,coupledwithotherunacceptablypoorworkingconditions,sometimeswithastrongdependencyonmigrantlabourtosustainit.Manyofthesebusinessesarepotentiallybeingunintentionallysupportedintermsofthesupplyoflabourtopoorqualityjobsthroughgovernmentwelfareprogrammessuchastaxcredits95 and ‘workfirst’employmentprogrammesbackedupbyincreasedconditionalityandsanctionsaroundwelfare

92 Felstead,A.,Gallie,D.,andGreen,F.(2015).‘PoliciesforIntrinsicJobQuality’,inFelstead,A.,Gallie,D.andGreen,F.(eds).UnequalBritainatWork.Oxford:OxfordUniversityPress;Sisson,K.(2016).‘Shapingtheworldofwork–timeforaUKjobsstrategy’.WarwickPapersinIndustrialRelations,No.105;Findlay,P.,Warhurst,C.,Keep,E.andLloyd,C.(2017).‘OpportunityKnocks?ThePossibilitiesandLeversforimprovingJobQuality’.WorkandOccupations.44(1).

93 TaylorReview(2017).GoodWork.TheTaylorReviewofModernWorkingPractices.

94 TUC(2017b).TUCCommentonTaylorReview.Availableonlineat:https://www.tuc.org.uk/news/tuc-comment-taylor-review

95 CitizensUK(2015).PublicSubsidiestoLowWageEmployers:MethodsBriefing;Neumark,D.(2015).‘ReducingPovertyviaMinimumWages,Alternatives’.Fed-eralReserveBankofSanFranciscoEconomicLetter,December;Schmitt,J.(2012).LowWageLessons.CentreforEconomicandPolicyResearch.

benefits.96Thegovernmentandotherpublicsectororganisationsshouldconsiderhowtheymightsecure greaterleveragefromtheirpurchasingpowerinrelationtobothgoodsandservicestorequirealltheirsupplierstosupportfulfillingworkinitsvariousdimensionswithintheirworkplaces.Asnotedearlierinthereport,theremaybegreaterscopepost-Brexittoadoptanapproachtopublicsectorprocurementwhichismoreproactiveinpursuitofinclusivegrowthobjectives.

However,theironyisthatinsomesectors–suchasadultcare–itisthelowlevelofpublicfundingthatconstrainstheabilityforemployerstoofferfulfillingworkacrossitsmanyfacets.Againinthecaseofsocialcare,theconsequencesoflowpayandpoorconditionsforstaffrecruitmentandretentionultimatelyimpactuponthequalityofcareprovidedtoservicerecipients.97Moregenerally,oneofthemajorweaknessesintheliteratureonjobqualityisthelimitedanalysisoftheroleofconsumers(households,businessesandpublicsectororganisations)who,throughanincreaseddemandfor‘cheap’over‘good’inrelationtoproductsandservices,exertasignificantimpactonthenatureoflabourdemand.Sincetheonsetofthe2008recessionthesecostpressureshavebeenintensifiedformanypurchasersofgoodsandservices–inparticularhardpressedconsumersexperiencingsignificantreductionsinrealearningsandstatebenefits,andawiderangeofpublicbodieshavingtorespondtosignificantcutsinfunding.98

Theneedforgovernmentactionisreinforcedbythedeclineinthemembership,collectivebargainingcoverage,powerandinfluenceofthetradeunionsintheUK,whichhistoricallysignificantlyimprovedandeffectivelyprotectedthequalityofworkandconditionsattheworkplace.TradeunionsstillcarryoutthisfunctionveryeffectivelyinsomeotherEUmemberstates,particularlyintheNordiceconomieswheretradeunioncoverageremainshigh.

Bringing About Step Change in the UK Supply Side InfrastructureCraftsarguesthattheUK’smaineconomicpolicyproblemsaremoretodowiththepolicyshortcomingsofsuccessiveUKgovernmentsthananyimpactofEUmembership.Hehighlightsinparticularseriousproblemswitheducation,infrastructure,innovationandthetaxsystem–allofwhichactasadragonproductivitygrowth,whichinturninhibitsthegrowthinearnings.99

FocussingspecificallyoneducationandskillsasareasofpublicpolicywhichcanimpactsignificantlyontheUKpost-Brexit,effectiveactionisnowrequiredtoimprovebasiceducationandeducationaloutcomes,reducingtheUK’sunacceptablylongtailofpeoplewithnoorloweducationalqualifications.In2016,therewerenearly3.4millionworkingagepeoplewithnoqualificationsandafurther4.5millionwithaqualificationnohigherthanNVQLevel1.Employmentratesforthosewithnoorlowqualificationsareonly63%,comparedto80%withthosewith‘uppersecondary’qualificationsand86%ofthosewith‘tertiary’qualifications.100

Itisessentialtoreducethesupplyofpeoplewhoseonlyormainoptionsareworkinthelowesttiersofthelabourmarket,andwhofacelittleprospectofprogressiononcelockedintothe‘secondary’labourmarket.Atthesametime,actionisrequiredtotackletheproblemofskillsunderutilisation,sittingside

96 Etherington,D.andDaguere,A.(2015).WelfareReform,WorkFirstPoliciesandBenefitConditionality:ReinforcingPovertyandSocialExclusion?CentreforEnterpriseandEconomicDevelopmentResearch,MiddlesexUniversity;Watts,B.,Fitzpatrick,S.,Bramley,G.andWatkins,D.(2014).WelfareSanctionsandConditionalityintheUK.JosephRowntreeFoundation

97 HouseofCommons(2017).AdultSocialCare.CommunitiesandLocalGovernmentCommittee.

98 Gould,C.(2010).Cyclesofpoverty,unemploymentandlowpay.JosephRowntreeFoundation.

99 Crafts,N.(2016).‘Brexit:LessonsfromHistory’.InBaldwin,R.(ed).BrexitBeckons:ThinkingAheadbyLeadingEconomists.CentreforEconomicPolicyResearch.

100NOMIS(2017).DataextractfromAnnualPopulationSurvey,2016.

bysidewithpersistentskillshortagesinareassuchasdigital.Thisnecessitatesanoverarchingreviewofthesocio-economicrateofreturntopublicinvestmentindifferentsegmentsoftheeducationandskillsinfrastructure,includingwork-basedlearningsuchasapprenticeships,toensureweareinvestingwisely.Atthesametime,byusingthepublicsector’sleverageonprivatebusinessesthroughprocurement,privatesectorinvestmentinskillingandupskillingtheirworkforcescouldbeincentivised.

Inassociationwithactiononthedemandsideofthelabourmarket,effectivesupply-sidereformmakesitmorelikelythattheUKpost-Brexitcancompeteeffectivelyintheglobaleconomy.Thiswouldhelptocreatealabourmarketthatissufficientlybuoyanttosustainanenvironmentwhereprovidingfulfillingworkisarequirement,ifemployersaretobeabletorecruitandretainthevolumeandqualityofemployeestheyneedtomaketheirproductsanddelivertheirservicesinanefficientandcompetitivemanner.

Specific Actions Required in Response to Brexit

Inthissection,weconsiderrequiredactionsmorespecifictothethreatsandopportunitiesassociatedwithBrexitdiscussedearlierinthereport.

Issue1:DecliningEmploymentLevelsinaSlackerLabourMarket

Intheshortterm,itisclearthatamajorriskstemmingfromBrexitcouldbeasignificantreductioninexporting,andinforeignanddomesticinvestment,whichinturnwoulddenttheUK’sgrowthrateandpotentiallyleadtorisingunemployment.TherearealsopotentialchallengesiftariffsareplacedonimportsfromtheEU.TheimpactswillvaryacrosssectorsinlinewiththeirdependenceonEUimports.

However,employmentandinvestmentincarmanufacturingwouldbeseriouslyatriskduetoahighdependencyontheimportingofpartsandcomplexsupplychainsforpartscrossingthebordersofmanyEUcountries.Thisisalsoanindustrywhichoffersgoodearningsandconditionsinthatmiddlepartoftheemploymentstructurewhichhasbeenhollowedoutovertime.Itisclearthatthesepossibletradedevelopmentscouldimpactnegativelyandsignificantlyonfulfillingwork.ThequalityofjobshasbeenadverselyeffectedbyUKrecessions,andthishasbeenwelldocumentedsincethecollapseofUKmanufacturinginthe1980s.Therearenoone-offmeasuresorspecificinterventionstodealwiththis.ItwillallbedowntotheskillwithwhichtheUKeconomyismanagedatthemacrolevel.

Issue2:DecliningEUMigrationtoUK

ItwasarguedearlierthatdecliningEUmigrationintolowerskilledjobsposesthreatsforbusinessinsomespecificsub-sectors,butalsoopensupopportunitiestopromotefulfillingwork.Inordertotakeonthethreatsandexploittheopportunitiesanumberofpotentialmitigatingactionscouldbeundertaken.

DevelopBrexit-DrivenTargetedEmployabilityandSkillsInterventionsEarlierinthereport,someanalysiswaspresentedonsectorsandoccupationswhichfeaturehighlevelsofdependenceonEUmigrantworkers.Analysinggeographicalvariationswouldhelptoidentifyfurtherareasofemployeerecruitmentandretentionpressurelikelytoemergepost-Brexit.WhentheUKgovernmentisinapositiontoputintoeffectanewpolicyonEUmigration,thiskindofoccupational,sectoralorregionalanalysiscanbeeasilyandquicklydeployedtolocatetheBrexit-inducedpinchpointsfromtheperspective

ofemployers,butalsotheopportunitiestopreparecurrentlyunemployedorunderemployedUKbasedworkersforthevacanciescreated.Additionally,someemployerswithveryhighlevelsofEUmigrantdependencymayrelocateorclose.Supportfortheresultingredundantworkersisneededthroughthissameprocess,atthesametimeredeployingthemtofillthepoststhatwouldotherwisebeenheldbyEUworkers.

Itwillbeimportanttogenerateadditionalresource,aswellasre-taskingexistingresourcedeployedthroughcollegesandothertrainingproviders,todeveloptherelevantskillsinthedomesticworkforce,whichalsoincludesEUnationalsandnon-UKnationalsfromoutsidetheEUwhoarecurrentlynotemployedorunder-employed.OvertheyearsandacrosstheUK,manyshortlifepartnershipshavebeenestablishedtodealwithlargerscaleredundancies,butalsomajoremploymentexpansions.ThebestpracticefromtheseinterventionsshouldbepulledtogethertofeedintothedesignofBrexit-driventargetedemployabilityandskillsinterventions.

IntroduceMoreEffectiveEmploymentProgrammesInadvanceofareducednumberofEUmigrantscomingtotheUKtoworkinlowerskilledjobs,governmentfundedemploymentprogrammeshaveakeyroletoplayinhelpingmoreunemployedpeople,particularlythosefurtherfromthelabourmarket,increasetheirattractivenesstoemployers.TheUKhasnotperformedwellintermsofitsprogrammestoimprovetheemployabilityoftheunemployed,andmorespecificallyhasbeenweakinrelationtopeoplewithhealthconditionsanddisabilityissues.101 ThisisattheheartofpromotinginclusivegrowthintheUK.Employers–andgovernments–havehadlessimpetustoaddressthesechallengesasthegrowinglabourdemandsintheyearsbeforetherecession,andintheperiodofrecovery,havebeeneasilymetbyincreasingnumbersofmigrantworkers.Muchmoreinvestmentisnowneededinupskillingexistingemployeesandthosewhoareunemployed,andmoreeffectiveinterventionsneedtobebroughttobear.

GreggandGardinerarguethatthedesignprinciplesrequiredtodrivetowardsfullemploymentbyincreasingtheemploymentratesofdisabledpeople,thosewithhealthconditionsandothersunder-representedintheworkforceareasfollows:• Shifttheobjectivefromreducingunemployment(whichcanbeachievedinpartbypeoplecoming

offbenefitsand/ordeclaringthemselveseconomicallyinactive)towardsincreasingparticipationinemployment.

• Reducethestrongfocusonjobentryanddivertmoreefforttowardsreducingordelayingjobexits,particularlyforthe50plusagegroupanddisabledpeople.

• Tacklemoredirectlyandeffectivelydiscriminatoryemployerrecruitmentpractices.• Designbottomupemployabilityinterventionsthatfocusonthespecificissuesfacedbylocal

unemployedpeopleandtuneintolocallabourmarketopportunities,movingawayfromthetop-downmodelsthathavedeliveredsuchpoorperformanceoverthepast30yearsormore.102

Movingquicklytosuchanapproachwouldhelppreparepeopleforentrytothemoretargetedskillsinterventionsdiscussedabove

SupportEmployerstoImproveJobQualityWehavediscussedearlierinthisreportthepotentialimpactofBrexitonemployerswhosebusiness

101Dudley,C.,McEnhill,L.andSteadman,K.(2016).Iswelfaretowork,workingwell?WorkFoundation.

102Gregg,P.,andGardiner,L.(2016).TheRoadtoFullEmployment.Resolution Foundation.

modeliscurrentlyhighlydependentonEUmigrantlabour.ThetwobroadapproachessetoutabovefocusondomesticUKworkersasasubstitutesourceoflaboursupply.Afurther,complementaryapproachwouldinvolveencouragingemployerstoexplorepotentialimprovementstothequalityoftheirjoboffer(broadlydefined)whichwouldhelpthemattractandretainmoreemployees.Awelldesignedbusinessdevelopmentinterventioncouldincentiviseemployerswhomaywishtomovetowardsanewbusinessmodelwhichprioritisedfulfillingwork,butareunsurehowtocommenceandembedthisshift.

Thistypeofinterventionisnoteasytodesign.Therehavebeenmanyattemptsovertheyearstoencourageemployerstoinvestmoreindevelopingtheskillsoftheirworkforce,butevaluationstendtofindverylimitedpositiveandsustainablebenefitsrelativetothescaleofsupportfromthepublicpurse.Attemptstobuildupthecapacityoftheintermediaries–suchassectorskillscouncils–whoworkwithemployersonskillsissuesalsohavehadlimitedsuccessasexemplifiedbytheevaluationoftheUKCommissionforEmploymentandSkills(UKCES)co-investmentfundstopromoteemployerinvestmentinskills,innovationandgrowth.103However,weknowthatbusinessesaremorelikelytoaltertheirbehaviourwhenthereis,forexample,asignificantthreattotheirprofitabilityorindeedcontinuedexistence–andforsomecompaniesBrexitposesthesethreats.

DesignGeographicalandSectoralPilotsFocusingonsomeofthepartsoftheUKwheretherearesectorswithahighdependencyonEUmigrants,thereisthepotentialtodeveloppilotactivitythatdrawsoneachofthethreesetsofactionsoutlinedabove.ThedifficultyisthatbeforethedetailsofBrexitareagreed,itisdifficulttocarryouttheplanningrequired.However:• Itwouldberelativelyeasytocarryoutastatisticalexercisethatidentifiesthesub-regionslikelytobe

mostatrisk,andthesectorsandsub-sectorsinplay.• Astartcanbemadebyre-designingandenhancingnationalemploymentprogrammesalongthelines

recommendbyGreggandGardiner.• Developmentworkcouldbecarriedoutwithasmallnumberofsectorswherethejobprofiletendsto

scorepoorlyonarangeoffulfillingworkmeasuresandwhoarecurrentlyheavilydependentonEUworkers.Thetaskwouldbetotesttheirpreparednesstoembraceanewbusinessmodelinvolvingasignificantshifttowardsmorefulfillingworkandtestthekindofbusinessdevelopmentsupportneededtofacilitatethis.

Thefinalelement–thedeliveryoftargetedemployabilityandskilledinterventions–couldbeassembledrelativelyquicklyoncethespecificsofBrexitbecomeknownandtheimplicationsforspecificsectorsareclearer.

Issue3:ThreatstoEmploymentProtection

ThereareclearconcernsamongstarangeofstakeholdersthattherearepotentialthreatstotherightstoemploymentprotectionintheUKafterBrexit.ThisisinthecontextoftheOECD’sjudgmentthattheUKhasoneofthemostlightlyregulatedlabourmarketsamongthegroupofthelargestandmostadvancedeconomies.

Thelossofanykeyemploymentprotectionscouldimpactadverselyontheincidenceof‘atypical’formsofworkintheUKlabourmarket,butalsoworkplacewellbeingasitisbroadlydefined.Evenwithitscurrent

103UKCES(2016).EmployerInvestmentFundandGrowthandInnovationFund ProgrammeLevelEvaluation.

employmentprotections,theUKhasexperiencedagrowthinpoorqualityjobsduringthepastdecade.Ifkeyprotectionsareremoved,itisdifficulttoseehowthisgrowthcouldbereversed.WhatcanbedonetoprotectthegainsthathavebeenmadethroughtheEU,atatimewhenparticipationinandthepoweroftradeunionsispossiblyatasecularlowpoint?Thisplacestheweightonbroaderbasedcampaigning,whereofcoursethetradeunionmovementhasapivotalroletoplay.

Twosuggestionsforsupportingcampaigningagainsttheweakeningofemploymentprotectionaresketchedoutbelow.

BuildanEvidenceBaseforCampaigningforExistingProtections.Therearemanydifferentformsofemploymentprotection,impactingondifferentgroupsoftheworkforceindifferentways.Usingfulfillingworkastheorganisingconcept,thereistheneedforasimple‘manifesto’whichsetsoutinaconciseway:• Thelinkbetweenspecificemploymentprotectionsandkeyelementsoffulfillingwork.• Estimatesforthenumbersbenefitingfromtheseprotections.• Thecharacteristicsoftheworkersbenefitting,andinparticularthevariousdemographicstowhichthey

belong.• Estimatesfortheextentofthebenefitsintermsoffulfillingworkflowingfromspecificemployment

protections.• Casestudiesofindividualworkersbenefitingfromspecificemploymentprotectionstoillustratetheir

value.Thisevidencebasecanthenbeusedinarangeofcampaigns,andbydifferentcampaigninggroups.Theevidencemustofcourseberobustanduptodate.

CreateaFulfillingWorkImpactAssessmentOveranumberofyears,impactassessmentshavebeencarriedouttoassesstheconsequencesforage,gender,disabilityandethnicityequalitiesofchangestokeyprocesses–suchasrecruitment,wagesettinganddismissal.InadvanceofanyreviewofthebodyofemploymentprotectionlawsandregulationswhichhaveemanatedfromtheEU,atoolshouldbedevelopedtohelpcarryoutassessmentsoftheimpactsonfulfillingworkthatwouldresultfromtheweakeningorlossofspecificemploymentprotections.Keyquestionswouldinclude:• Implicationsforthevolumeoflowqualityjobs.• Implicationsforthepeopleholdinglowqualityjobs• Whichgroupsoftheworkforceareatrisk?• Whatmitigationsareplanned,andtowhatextentaretheselikelytowork?

Thiscouldbuilduponandcomplementthecampaigningevidencebasediscussedabove.

Issue4:LossofEUStructuralFunds

ThemostimportantStructuralFundintermsofsupportingfulfillingworkisESF,andover46%ofthefundingisfromtheUKgovernmentandotherUKbodies.ThismakesitamatterofUKgovernmentpriorityastowhetherthistypeoffundisretained,reduced-orindeedincreased.TheevidenceisthatthoseorganisationscurrentlybenefittingfromESFneverthelessacceptthatitisafarfromperfectvehicle.Potentialactionsincludethefollowing:

Re-designandEnhanceESF-EconomyandLabourMarketAdjustmentFundAredesignedESFcouldbeusedtofundthetargetedskillsinterventionstohelpdomesticUKlabourfillvacanciesthatwouldotherwisehavebeentakenbymigrants.However,itcouldalsobeusedtohelpredeployworkersmaderedundantbecauseofbusinessdownsizing,closureorrelocationbeyondtheUKbecauseofBrexit.Ofcourse,muchmoreprofoundimpactsonlocalitiescouldresultifthereareseveredisruptionstotrade,whichwouldleadtoarequirementforamuchlargerEconomyandLabourMarketAdjustment Fund.

ThisnewfundshouldavoidtheproblemsassociatedwithESF.• Asalabourmarketadjustmentfund,itneedstobe strongly focused on job outcomes.• A ‘job’shouldmeetthecriteriaassociatedwithfulfillingwork,andshouldbesustainable.• Theresourcesshouldbedevotedtoserviceswhichpluggapsinratherthanduplicateexistingprovision.• Thereshouldbeagreaterresponsivenesstolocalemploymentandskillsneeds.• Theongoingmonitoringoftheeffectivenessoftheservicesdeliveredthroughthefundneedstobe

significantlyenhanced.• Theresourcesrequiredtoadministerthefundneedtobeminimised,allowingthemaximum

investmentintheservicesdeliveredtotheclienttoraisetheirskillsandemployability,whilealsotacklingotherissuesthatrestricttheiremployability.

ThissupportstheargumentofBaldwin,CollierandVenablesthattheBrexitfocusshouldbeonworkersandcommunities.104However,withasimilarapproachtothere-purposingof‘ERDF’funding,developmentsupportforbusinessesneedingtomoveawayfromthe‘poorwork’businessmodelcouldbetaken forward.

Conclusion

ThisreportarguesthattherearemanythreatsposedbyBrexitinrelationtofulfillingwork.However,therearealsoopportunities,notleastbecauseemployersandgovernmentsmayneedtofocusmoreonmaximisingthepotentialoftheexistingworkforce,includingthoseinlessthanfulfillingwork,butalsomembersofgroupsofthepopulationgenerallyunder-representedinemployment.• AsaconsequenceofBrexit,thenumberofpoorquality,lowpaidjobsmaydecline,andsoraisethe

overallqualityoftheemploymentofferacrosstheUK.• Thereisarequirementtoenhancetheeffectivenessofemploymentandskillsservices,soboostingthe

qualityoftheUK’slaboursupply.• Bothoftheabovecombinedcan,ifsustainedoveranumberofyears,begintopushtheUKtowards

higherearningsandhigherproductivityandamoreinclusiveeconomy,wherefulfillingworkisthenormandmuchmoreevenlydistributedacrossdifferentgroupsinsociety.

ThefinalsectionofthereportmakesanumberofpracticalsuggestionsonhowtoreducesomeofthenegativeconsequencesforfulfillingworkthatmightemergefromBrexit.Italsosketchesouthowpotentialopportunitiescanbeexploitedtopromoteaspectsoffulfillingwork.Thereisnodenyingthatthisischallenging.

However,thestarknessofthechallengethatmanybusinesses–andultimatelythegovernmentanditsagencies–willconfrontcouldbethecatalystforthedevelopmentandimplementationofmoreradicalpoliciestomakefulfillingworkthenormintheUKlabourmarket.

104Baldwin,R.,Collier,P.andVenables,A.(2017).‘Post-BrexitTradeandDevelopmentPolicy’.PolicyInsightNo.88,CentreforEconomicPolicyResearch.

Annex: Approach to study

BroadApproachThreemainmethodsweredeployedtotakethestudyforward:• Anextensiveliteraturereview.• StatisticalanalysisfortheUK,theEUandOECD.• Consultationswithkeyorganisations.

LiteratureReviewAsignificantvolumeofreportsandstatisticalmaterialwassourcedfromthefollowing:• CBI.• CIPD.• EuropeanCommission.• Eurofoundation.• HouseofCommons.• HouseofLords.• InstituteforEmploymentResearch,UniversityofWarwick.• InstituteforEmploymentStudies,UniversityofSussex.• NESTA.• OfficeforNationalStatistics.• OECD.• ResolutionFoundation.• ScottishEnterprise.• TheMigrationObservatory,UniversityofOxford• TUC.

StatisticalAnalysisStatisticswerecollectedfromstandardUKdatasourcesthroughONS,butalsofromOECDdatabases.

ConsultationsAmixoffacetoface,telephoneandemailconsultationswerecarriedoutwitharangeofacademicsandindependentcommentatorswithanalyticalexpertise,aswellasrepresentativesfrompublicandvoluntarysectors,andofemployersandtradeunions.

ThisreportwaswrittenbyAlanMcGregor

December2017

ISBNnumber:978-1-909447-79-0

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