• Emerging from the pandemic, CPP polling found that 8 in 10 people hold business responsible for providing good jobs – especially if they receive public funding.

• We also identified a “missing third” of employers: those who want to do better by their workforce but need help to get there.

• Local and regional governments have been mobilising to support this shift to good work, by adopting a campaigning mindset and role modelling good behaviour (notably in Greater Manchester and Bristol).

• But voluntary behaviour changes can only go so far. Labour’s pledge of “the biggest upgrade to rights at work for a generation” will help squeeze out some forms of bad work.

• Delivering good work for all – in sectors like retail or social care – will require institutional innovation, rather than just tinkering with terms and conditions. Success will require expanded union activity; Labour’s proposed return to sectoral bargaining; and an industrial strategy for good jobs – leaving the UK looking more like northern Europe and less like the US.

Providing good work, rather than simply a job, has become a defining policy challenge over the past decade in Britain. With (un)employment rates looking healthy by historic standards, workers and politicians have become more concerned by rising insecurity and in-work poverty.

A reform agenda had crystallised around the 2017 Taylor Review, the Government’s 2018 Good Work Plan, and the Employment Bill announced in the 2019 Queen’s Speech. But since the pandemic, three successive Conservative Prime Ministers have put workplace reform on the backburner.

That inaction is a mistake. At the Centre for Progressive Policy, we called for the pandemic to be a moment of change, in which the value of “key” workers – many facing precarious, unsafe, low paid work – was reimagined.

The 2024 general election campaign has put good work firmly back on the agenda. Labour is standing on a commitment to deliver “the biggest upgrade to rights at work for a generation”, while economists are calling for a good jobs industrial strategy to fundamentally shift our economy.

In our latest general election briefing, we set out the state of good work in the UK, and the reforms the next Government will need to pursue if it wants to move onto the “high road” of high pay, high skilled, high productivity jobs for all.

Britain’s labour market is divided: split between a majority, with secure terms, reasonable pay and supportive workplace cultures; and a large minority, who lack one or more of those goods. Those in the ‘bad work’ minority are much more likely to be poorer, women, disabled or from ethnic minorities.

The Chartered Institute of Professional Development (CIPD) has been conducting the longest-running (since 2018) and most comprehensive survey Good Work Index. This is one of several such efforts following the Taylor Review, including our work in CPP and the Institute for the Future of Work’s local level mapping of Good Work.

CIPD finds remarkably constant patterns in work since 2018: the shares of people facing workplace challenges have hardly budged; where they have, as in those facing conflict in the workplace, it reflects work-from-home related gains for those who were already in a strong position (older, professional men).

Successive waves of crises have hit those who were already most vulnerable hardest, even as the headline figures on the prevalence of good work have been stable. In our work during the pandemic, CPP found that key workers in some of the lowest paid professions – social care, security, food production – faced some of the highest mortality rates from COVID-19 in the country.

But these problems reflect structural challenges in how the UK manages its labour market. Sectoral bargaining – agreeing a cross-firm, cross-union national deal for pay and conditions by sector, rather than negotiating workplace-by-workplace – has collapsed in the UK since the 1980s.

We tend to think of this shift towards worker-by-worker negotiations are being due to the decline of trade union membership. While that’s an important part of the political story, an international comparison makes clear that a government can move quickly to expand collective bargaining even if individual workers are not unionised.

And this move towards greater flexibility in pay and conditions has come at the cost of the ability to make long-term, sector wide commitments and plans that can drive up productivity. Sectoral agreements reward the most productive firms in a sector while squeezing out laggards; as well as reducing inequality amongst workers; and providing a lever for industrial strategy that doesn’t require more tax-and-spend.

The 2024 Conservative Manifesto contains no reference to a (promised-since-2019) Employment Bill or workplace rights. Its section on work focuses exclusively on a more punitive regime to drive the economically inactive back into work, reducing the welfare bill in turn; while the manifesto also pledges to press on with Minimum Service Levels anti-strike legislation (challenged by the UN’s International Labour Organisation as incompatible with international law, the first time the UK has been called out since 1995).

Tory reticence means that Labour’s bold Plan to Make Work Pay is one of the main dividing lines between the two parties: both in policy terms, and in what it tells us about their vision for the economy. Labour proposes implementing the Taylor Review in full, and going further.

Across 24 pages, the party sets out dozens of new rights for workers – including eliminating the current “employed, self-employed, worker” categories in favour of a single employment status; new “day one rights” including flexible working; ending zero-hour contracts unless both sides want them; a “right to switch off”; bereavement leave; protection from invasive disciplinary technologies; and more.

Labour’s plans in fact run deeper than New Labour-style contractual employment rights. They contain a plan for new, or expanded, institutions to drive good work: a mass repeal of trade union restrictions; changing the Low Pay Commission’s mandate to move the National Living Wage towards the Real Living Wage; and a return to sectoral bargaining in key “bad work” sectors, beginning with social care.

In polling we commissioned in 2020, CPP also found that two thirds of people think business has a responsibility to provide “good jobs”; and that share rises to 8 in 10 when a business receives financial support from the government. We also found that two thirds of employers felt a greater social responsibility than they did before COVID-19 – though only a third were actually delivering on “good jobs”.

This emphasis on employers’ behaviours – as opposed to looking at certain sectors – is reinforced by our 2019 work, reviewing the ‘good employment’ practices of Britain’s 25 biggest employers.

In all sectors, we found examples of leading businesses able to take the “high road” of higher pay and higher productivity; and of firms who provided relatively low quality work. For instance, in retail and public employment, John Lewis and the Ministry of Defence came near the top of our ranking; while Morrisons and the Metropolitan Police were near the bottom.

Leadership matters – the strongest predictor of being a good work employer was whether an organisation voluntarily reported CEO pay ratios. That is why so much of the focus on improving work over the past five years has taken place at a local level, working workplace-by-workplace.

Our work with the Inclusive Growth Network points to two examples: Good Employment Charters, and the reorientation of local economic development to support good jobs.

CPP’s Inclusive Growth Network – which brings together 14 leading public authorities from across all four nations of the UK – leads collaboration across the UK’s Good Employment Charters. The Charter approach sees employers voluntarily pledge to commit to good employment practices and has been pioneered by Greater Manchester. This approach matters because culture needs to change workplace-by-workplace; and it has served as a laboratory to test ideas that have now made their way into Labour’s plans.

We set out a primer here for IGN member South Yorkshire Mayoral Combined Authority, summarising the key components and considerations for public authorities seeking to drive inclusive growth. Places that are further along the journey offer valuable lessons too (such as Bristol and Greater Manchester’s efforts to become Living Wage places): the importance of public authority role-modelling; integration with wider strategies; and the use of existing strong partnerships and collaborative processes.

Partnership with employers is only one part of the toolkit in promoting good work. Other members of the Inclusive Growth Network have focused especially on reimagining employment support to help people move into good work.

The former North of Tyne Combined Authority (now the North East) has shown how local Job Centre Plus services can be reshaped by local partnership working, contrary to a prevailing sense of silos across the public sector.

The London Borough of Barking and Dagenham has adopted a prevention-first approach, seeking to support people with complex needs into employment – which is now attracting seed funding from the Department for Work and Pensions.

And Cardiff Council has been funding supported employment and internship programmes for pupils with additional learning needs – transforming their lives; local businesses’ capabilities for supporting those with disabilities; and saving public money relative to the cost of a specialist college.

Expanded rights require expanded enforcement; and, for all to benefit, labour market reform needs to go hand-in-hand with a ‘good jobs’ industrial strategy.

The next government has the opportunity to learn from best practice locally and regionally; international best practice in how public service contracting is used to drive-up standards; and historic and international evidence on how sectoral negotiations can be a key tool in delivering just and equitable economic change.

Based on our previous work (here, here and here), CPP recommends:

• Making access to UK public funding conditional on meeting broader community objectives, including providing good work, in line with the Cabinet Office’s social value model. At a local level, IGN members are exploring linking Good Employment Charters to procurement, regeneration and inward investment (like Greater Manchester with their recent round of bus franchising contracts). We recommend all public authorities seek to build conditionality into spending and investment.

• “Australia-style”, sector specific, minimum pay and employment conditions agreements, beginning with social care and retail, under the auspices of a national agency (whether a new or existing department, or – as in Australia – a Commission for competition and consumers). The government should set a target of having all workers on the real living wage and facing secure hours by the end of the parliament, as the basis for a productivity plan negotiated with employers and unions.

• More transparency over management to drive good work practices, including resuming naming-and-shaming for non-compliance; implementing the Taylor Review recommendations on reporting workforce structure through existing staff surveys; and mandatory reporting of CEO pay ratios.

• Establishing a single, better funded, labour market enforcement body – as promised in the 2019 Conservative Party manifesto and Labour’s 2024 manifesto – to raise the risk of detection and the cost of violation.

Champions of stronger rights at work should recognise that it comes with trade-offs, and – holding everything else constant – may make the cost of employing a person higher. In part, that is the point: incentivising more spending on capital rather than relying on cheap labour.

But there’s no inevitable link between better rights and lower employment, as critics may suggest. Other countries show that strong rights, high productivity, high pay and high employment can go together.

Where the sceptics have a point is that piecemeal reform won’t cut it. Higher pay and more stable employment will require higher productivity. Labour market reform needs to go alongside a new industrial strategy for people who work in low-pay services: covering ambitious new skills programmes; coordination of capital investment and training among businesses; and public-private innovation programmes designed to support rather than replace workers.

This is an approach to market-making not seen in the UK since the 1970s, and never with this level of ambition. Will the next government be up for the challenge?

Editorial

Want to read more? Check:

1. The Taylor Review into Modern Work Practices(2017)
2. The Government’s Good Work Plan (2018)
3. From precarious to prosperous: how we can build back a better labour market (2020), Centre for Progress Policy.
4. Creating a Good-Jobs Economy in the UK (2023), Doshi, Spencer and Rodrik