Labour was right to admit its mistakes – but now it’s time to formulate fresh thinking on our economy and education system, Shadow Business Secretary Chuka Umunna tells Political Editor Jonathan Walker.
Employers are struggling to cope with new recruits who may know how to use an iPhone – but have no idea how to hold a telephone conversation with a client.
And it is Britain’s schools which are failing to prepare our children for the world of work, according to Chuka Umunna.
Part of the solution is to get businesses into schools, including primaries as well as secondaries, to talk to youngsters about employment and the workplace, he said.
Mr Umunna spoke frankly about the challenges facing industry, and some of the challenges facing Labour, when we met in his Streatham constituency.
He had a busy day ahead of him. After talking to the Birmingham Post he was due to unveil a plaque in honour of his heroes Soul II Soul – the British R&B group led by Jazzie B – in Brixton. The first concert he ever attended was Soul II Soul at the Brixton Academy in the early 1990s, he said.
At only 33, Mr Umunna is a high-flier. He became an MP for the first time in May 2010 and already holds a senior post in Ed Miliband’s shadow cabinet, opposite Business Secretary Vince Cable, although this follows a successful if brief career as a lawyer.
Now he’s helping shape Labour’s policy on perhaps the most pressing issue of the day – how to get the economy growing and industry creating jobs again.
But along with his party leader, he insists a Labour government would have ambitions which go beyond simply growing the economy. The last Labour government appeared to preside over a period of economic success but the headline figures hid the fact that living standards were falling for many people.
What is needed is nothing less than a new version of capitalism, he says.
“We need to transform the way the economy operates.
“We know that since the early noughties, structurally it hasn’t been fit for purpose. So since 2002 or thereabouts, median wages stagnated despite productivity increases – and at the same time, living costs started to rise.”
This is what Labour means when it talks about the “squeezed middle”, he said. “But it’s not just that there is a squeeze on the middle – you have a hollowed-out middle too, an hour glass economy with an insecure, low-paid, not terribly highly-skilled economy at one end, and then a very highly skilled and highly-paid economy at the other, and a hollowing out of those intermediate jobs in the middle.”
Britain needed a balanced economy, he said, with less reliance on one part of the country and less reliance on the financial sector.
Among other things, this would involve ensuring schools were equipping young people for the workplace – something they were not doing adequately at the moment.
“I don’t think the school system is sufficiently preparing young people for the world of work despite the superb job they do educating our children.
“The number one message I get from businesses is first, we don’t have enough young people coming through with the engineering skills we need, and secondly the soft skills that we often need in the workplace are lacking.
“Despite the fact we have the most technologically clued-up young generation ever, who use iPads or have a mobile phone, and are proficient in social media in a way older generations are not, too often businesses tell me that the young people they have coming in to their business lack just the basic phone manner.”
Young people needed contact with employers, and guidance about the skills they would need in adult life, from a young age, he said.
“It’s got to start early. It’s not just an issue of secondary school, but it’s got to start at primary school.
“The challenge for us is, we are already asking so much of teachers – I have primary school teachers in our family and I know teachers working in deprived areas are not just teaching, and we have some of the most deprived wards in the country in the West Midlands, they are not just teachers. They are a teacher, a social and a welfare worker at once.
“So I know that I am talking about asking them to do even more, and that may be too much to ask, but we have got to work out how we resource them to do that.”
One of the most controversial decisions taken by the current government in terms of industrial policy was the decision to scrap Regional Development Agencies (RDAs) and introduce smaller Local Enterprise Partnerships (LEPs) instead.
Mr Umunna said the abolition of RDAs was a mistake, but Labour would try to improve the new bodies instead of returning to the past – including providing LEPs with government funding for the first time, although he said it was too soon to indicate how much this might be.
“Our current thinking is that the best thing for us to do would be to continue with the LEPs but improve them.
“There’s three major problems we have with LEPs at the moment. First, they haven’t been given adequate resources to do what’s expected of them. Secondly they haven’t been given the powers to do the kind of things that people expect them to do.
“And thirdly there is clearly an issue in particular with ensuring small and medium sized enterprises are properly represented and engaged with LEPs.”
Labour would look for ways to ensure SMEs were represented on LEP boards, he said.
He was also fully behind Mr Miliband in warning that Labour must take concern about immigration seriously, he said.
“One of the mistakes we made in government was simply not being prepared to talk about the issue. Part of that was discomfort with talking about it, because historically debates about immigration have veered into issues of race as well.
“One of the ways I know we got that so wrong is that, during my general election campaign in May 2010, the people who raised immigration with me more than any other group were my African-Caribbean constituents.”
Admitting that Labour made mistakes over immigration when it was last in power, and on the economy, wasn’t easy but it was necessary, he said.
“We lost the election in May 2010 for a reason. People were giving us a message.
“And to win back support we must do so with humility, acknowledging where we went wrong, looking to build on where we got it right and coming up with real solutions that address people’s problems in the future.”