Whose Side Are They Really On? Part 1

Shadow Education Secretary Andy Burnham yesterday launched a stinging attack on the government’s attitude to the life chances of poorer teenagers, by claiming that social mobility is being “thrown into reverse” by its education policies.

The row over university funding is still fresh in the memory, but the immediate cause of Mr Burnham’s outburst is the coalition’s plan to scrap the Education Maintenance Allowance and replace it with a more focused model of funding for disadvantaged FE students.

At present, all 16- to 18-year-olds in England whose annual household income is around £30,000 or less receive a grant of up to £30 per week, designed to remove financial barriers to staying in education. (The grant also exists in the rest of the UK, but control and administration of it here is devolved.)

Mr Burnham calls the decision “an attack on the aspirations of young people” by politicians out of touch with the reality of the pressures facing low-income families. His opposite number, Michael Gove, says the grant is poorly targeted, wasteful, and not actually needed in 90% of cases.

Guess who’s right.

The Department for Education says the EMA costs around £600 million a year, and cites research that suggests that 9 in 10 young people who receive the grant would have continued in education anyway.

Add to this the plan – initiated by the previous government – to raise the statutory school-leaving age to 18 and the rationale for the Allowance begins to weaken.

Not so, say advocates, including the University and College Union which this week published its own research suggesting that 70% of students in the poorest areas would drop out of education were the grant to be stopped.

These two findings are not as contradictory as they seem, however. Mere common experience says that students receiving EMA are spread across the country, including in pockets of wealthier – especially rural – areas.

By contrast, the UCU poll was restricted to the 30 schools and colleges with the highest proportion of EMA recipients, most of them in urban areas. Yet the Labour motion proposed by Mr Burnham argues that the EMA gives poorer students greater choice in where to study by helping with (among other things) transport costs.

Exactly whose side are they on?

The greatest hypocrisy, though, is being committed by the government – honouring a tradition that runs throughout the Labour years too. It’s all about political economy; it’s about vested interests, and keeping on-side those upon whom elected leaders lean.

Michael Gove says “you cannot spend money you do not have” and “if we believe in generating social mobility then we have to ask: how is every pound best invested?"

The EMA is being replaced because it doles out money indiscriminately (albeit conditionally) on the basis of a single, simple indicator of need – family income.

Yet every year the state dishes out hundreds of pounds, with no strings attached, to another group of people on a similarly superficial basis… and then supplements it when (as in this winter and last) the country’s mercury slips below an arbitrary marker.

But politicians wouldn’t dare fill this black hole in the national budget. Why? Because pensioners can vote.

Now we know whose side they’re really on.

The New Age of Retirement Starts Here

It is a little-known anomaly of British employment law, and today the government finally kick-started its drive to eradicate it.

At present, though the country prides itself on its anti-discrimination legislation, firms nevertheless enjoy an explicit legal entitlement to dismiss staff members solely on the basis of their age.

That’s because 65 is not only the age at which individuals can begin to draw their state pension, but also the ‘default retirement age’ (DRA), at which workers face being forced to retire by those they have hitherto spent their days serving.

We all know the state pension age is to rise over the coming years, and now the government is scrapping the DRA altogether. Unsurprisingly, trade union leaders have welcomed the move.

Alarmingly, employers are up in arms.

The CBI has described as inadequate the government’s new guidance for firms on how to retire staff that are no longer up to the job, while the Institute of Directors has – puzzlingly – interpreted the changes as reducing flexibility for bosses. Others worry about the effect on young jobseekers, or the quality of older people’s retirement.

Such criticisms are not only exaggerated (or plain wrong) on a basic level, but fundamentally miss the point.

Take the flexibility argument. The abolition of the DRA does not prevent firms from using the provisions of other employment legislation to dismiss poorly-performing or incapable employees – of whatever age. On the other hand, it removes the temptation to exploit the law in order to arbitrarily reduce the age of a workforce.

Employees, however, clearly have the most to gain from the change. Older workers will no longer face the spectre of being driven out of work whilst still fit and healthy just because of their age – this legal provision being an astonishing contradiction of otherwise-strict equality laws.

Finally, there’s the discussion about the impact on the labour market. It’s intuitive to think that because more older people will be able to stay in work longer, jobs that would otherwise become available more regularly will suddenly prove hard to come by for an already squeezed and embattled younger generation of workers.

But it is not that simple, for this assumes a ‘zero-sum’ employment game in which the number of jobs stays constant, irrespective of labour-force and economic growth.

Indeed, it will be fascinating to discover whether the retention of experienced workers boosts the number of jobs created in the economy and/or the success of those in work in the early and middle part of their working lives.

Fundamentally, however, this legislative change is far less about employment than it is about retirement; it is no coincidence that the announcement was made on the same day as the publication of the Pensions Bill, which provides (among other things) for increases in the State Pension Age.

Retirement is changing.

Gone are the days when people worked until the day after which – their government dictated – they were no longer capable of working, and moved from full-time work to no work; no sooner and no later.

Gone are the days when a large majority of jobs required a high level of physical fitness that gave older employees no option but to call it a day anyway.

In the 21^st century, people do not feel handicapped by their age. In the 21^st century, people do not grind to a halt on their 65^th birthday.

The academic consensus on ageing has long advocated an evolution towards less black-and-white approaches to the end of the working life, including flexible retirement ages and more part-time working. Ultimately it’s about recognising not only that people live longer, but that they are healthier as they do so.

By giving them greater choice, governments empower workers, and that can only be good for the economy, for society and for democracy. Even if it does make inflexible employers feel threatened.