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Flexible Working

Volume 551: debated on Monday 10 January 1994

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4.54 p.m.

rose to ask Her Majesty's Government what measures are being taken to recognise the critical importance to employment, productivity and quality of life of the growth of flexible working.

The noble Lord said: My Lords, the object today in asking the Government about official attitudes to flexible working is to bring out into the open processes of social and commercial change which could be every bit as important to this nation as the Industrial Revolution. Like all the best revolutions, it is in harmony with the changing perceptions of millions of citizens. Like other revolutions, it is likely to take the government of the day by surprise. Today I propose to show that the United Kingdom, by chance almost, is extraordinarily powerfully positioned to show the way to the rest of the world how to grasp, and thrive in, an environment where information is the absolutely dominant commercial force.

Sometimes known as teleworking, the original concept of flexible work was of a person working remotely, from home, using a telephone. I think it is true to say that it got started around 1967 with a company called F International. Since then the practice has become more sophisticated, and while the option of working from home remains, advances in electronics make it possible for people to work together as teams from cars, from hotel rooms, satellite offices, or purpose-built telecentres. And suddenly the whole world has become one person's "office".

My personal interest in this area springs from a larger fascination with how social change and technology, in a sense, feed on each other. When we examine the growth of flexible working both here and in other countries, we find a collection of sociological theories which used to be way in advance of the enabling science. The point I want to make this afternoon, above all, is that we are poised on the threshold of theory and practice coming together. The technology has nearly arrived.

History is littered with examples of science and society marching in step. Transport science has given us the car, which has changed the face of the whole world; telecommunications have given us, for instance, the free movement of capital with all its risks and rewards. But creeping up on us, as stealthily as seeds growing under the earth, is the enabling technology of the data highway. In my opinion the impact that that area of science will have on our society could be more profound than any other technology-driven change in our history.

I have used the shorthand of "flexible work" to focus on the consequence of that change. Essentially, it means releasing people from the tyranny of the central workplace and allowing them to be productive, fulfilled, managers of their own lives in a way that most of us can only dream about today.

Perhaps I may condense for your Lordships a list of the immediate benefits which flow from flexible work: first, the labour market itself thrives in that environment. The recent Delors White Paper on growth, competitiveness and employment has spotlighted the crucial importance of competitiveness which can be achieved only through increasing labour market flexibility—ideas which are entirely consistent with our Government's approach. As a fact of life, temporary work, part-time work, and out-sourcing are the growth areas of employment in Britain, but in contrast to that free-market approach to labour, which is driven mainly by the need to squeeze unit costs, the Government have been slow to identify the strategic benefits of flexible practices.

The impact of new technology and telecommunications has already been tremendous. One in three households now houses a computer and six in 10 people use information technology as a standard part of their work. Whereas physical presence is really essential for many kinds of work, it is not when the main medium for communication is data down a wire. Thus many jobs could be done anywhere; they are independent of location.

The impact on transport policy is self-evident and potentially enormous. Substituting telecommunications for transport signals the end of the rush hour more strongly than any amount of spending on public transport could do. In the USA so-called "telecommuting legislation" has led to measurable benefits in reducing congestion in city centres while improving the quality of life of employees. The federal government has started a "flexiplace" programme, urging all US civil servants to work part of the time away from the office if possible, and now there are satellite offices being set up around the outskirts of Washington DC to reduce their commuting time.

Another benefit derived from bringing work to people, rather than people to work, is that important barriers are removed for people who find travel difficult; for example, the disabled, or those who live in remote parts of the country. It is a benefit also for people living in high unemployment areas, perhaps where many in the labour market are displaced from traditional but declining sectors such as heavy manufacturing or mining. New ways of working offer the chance of electronic inward investment—and perhaps this may succeed where traditional methods of regional development and job creation have failed.

And it is not only in socially desirable benefits that we can see enhancement. People studying these matters in Britain today can prove productivity increases of 30 per cent. and more when flexible work is sensibly implemented. At the moment we are carrying in this country a burden of misery from living in the wrong place, offering the wrong skills, the frustration of disablement and so-called structural unemployment.

I am not proposing that flexible work is an overnight panacea for all those problems. What I am saying is that communications technology, even in the past two or three years, has acquired the power to unlock productive activity for more of our citizens than ever we hoped. Moreover, as a footnote, we are finding out from experience of the several millions users of Internet, for instance, that smart networks can deliver to their users a quality of communication which approaches face to face speech.

It is worth making a couple of observations of a sociological nature about the United Kingdom which encourage me in my belief that we can lead the world in these desirable transitions. It would appear that we have a greater acceptance of changing the way we work, accepting the different disciplines of working from our homes with less anxiety or resentment than such experiments have generated in other countries. One must make an exception in the case of the USA, where, in certain communities on the West Coast, flexible working now provides a significant proportion of their total productivity.

Some of the factors behind that apparent ability to accept working from home could be the high percentage of home ownership and the recent years of soaring domestic property values. As a nation, we have come to think of the place where we live as being the focus of much of our financial and emotional investment. Perhaps it is a short step for a person to be comfortable with the idea that it can serve also as a place of work. But perhaps it is also the consequence of there being less childcare provision in the UK by comparison, say, with France., Spain or Germany; or perhaps it is tied in to a new openness in British unions, so that "atypical" working migrates more easily into becoming accepted practice.

I have just touched on the more obvious benefits of flexible work: job creation, environment, productivity, lowered stress and greater opportunities. It would be intellectually crass and lopsided if I did not air some of

the hazards which need to be foretold in any society; one of these was summarised last July by James Buchan in the Spectator in an article entitled The Redundant Male. If; as a nation, we are better placed to grasp flexible work and make of it a second Industrial Revolution, we are also the first developed society to be living through a tidal wave of change in male/female employment ratios. In the past 20 years, writes Mr. Buchan, the British labour force has grown by 3.2 million people; of these, 90 per cent. have been women. It means that women displaced about 1.3 million men from potential work. Of what new jobs there are going to be, the Department of Employment expects eight in 10 to go to women. Flexible work will hasten and confirm that process.

Corporate structures will change as flexible work takes over, and that will lead to its own stresses. Middle management layers become more difficult to justify and what evolves is a very flat hierarchy consisting of a department chief, possibly a small functional cabinet surrounding him or her and everybody else out on the edges of the network. The power relationships, incentive systems and risks of isolation are all areas worth analysis and research.

So what kind of response am I looking for from my Front Bench this afternoon? When I first cast an eye over flexible work as a social issue, I was interested how many departments of state have a say. The DTI has, of course, gone further—and I am pleased that it has been sending delegates to conferences in recent times—by commissioning a positive report on the subject, the full details of which have not been made public. However, I believe that there is a helpful synopsis in limited circulation.

The Department of Employment, I need hardly say, is critically involved, as flexible work is a new rogue factor in any manpower model in the UK. The Department of the Environment is involved, especially when one considers issues such as regional deprivation and reducing pollution. I have already touched on the substantial impact which flexible work will have on the Department of Transport's planning policies. I am happy to note that transport is creating for itself an active brief in monitoring developments. Nor is the Department of Energy left untouched by the issues. It has been estimated in America that if 10 per cent. of commuting had been eliminated by those techniques, they would not have had to import a drop of foreign oil after OPEC 1 in 1973.

While remaining on the subject of departments, I can single out the Scottish Office for its foresightedness in recognising the opportunities as they particularly impact on the Highlands and Islands and Grampian regions.

Where I have to point an accusing finger this afternoon is at Treasury policy. Where, in the real world, employers and employees, tied together by new technology, are happily exploring fertile new territories of productive activity, the tax structures stay as rigid as iron girders. I feel sure that the Treasury is looking at the trends and I urge the forward-planners of our future tax systems to recognise and accommodate the changes: otherwise the window of opportunity will close. As it is, all my researches indicate that we have something like a two-year start on the rest of the world in exploiting the lead, perhaps more. That has been much helped by the deregulation of the UK's telecoms environment.

I make no apologies for the superficiality of my observations this afternoon. My only purpose was to touch on some of the benefits and some of the problems which these changes will deliver. As I mentioned, my motivation comes from an interest in the consequences of mixing scientific advance and social evolution.

I am emphatically not looking for intervention from this, or any other, Government: heaven forbid. I have made certain assumptions, such as assuming the continued growth of information as an economic engine. I could have talked at length about the emergence of "the virtual company", as it is key to the subject. I have assumed that the Department for Education will get a grip on functional illiteracy, as everything that I have been saying becomes entirely irrelevant if we cannot rely on even the bedrock schooling skills.

If I were to urge any specific action, it would be for the departments of state to co-ordinate their respective interests. Only then will the government of the day be able to enter a dialogue with these new working people of Britain, based on deeper understanding. I hope that this will be accompanied by a review of the legal and financial disincentives to flexible work. After all, the Government are well placed to show the way in their own huge workforce.

My purpose will have been entirely served from the point of view of this House, when—having heard what my noble friend has to say—we are all in a position to reflect on the Government's observations on the nature and future of flexible work.

5.8 p.m.

My Lords, we should all be thankful to the noble Lord, Lord Birdwood, for introducing such an important topic. He pointed out what has been going on around us. But, as he said, like many such revolutionary changes, if you do not look at it in a systematic way you might miss it completely. My purpose today is to take up what the noble Lord said and to expand upon it slightly.

For some time it has been clear that the nature of work in our society has been changing fundamentally and that the kinds of notions that we had of full employment will be very difficult to revive. Many politicians still talk in terms of full employment as if the type of employment levels which were prevalent in the 1950s and 1960s will be possible to achieve again. I do not think that that will be possible. One of the reasons for that is the different nature of industrial technology. It is caused as much by information technology as by the revolution in transport and the change in production technology away from what we used to call "Fordist" technology to a much more flexible technology.

Therefore, not only is technology an aspect of flexible working but, in a variety of ways, people will also be finding that they are working flexible time over their life cycle of employment as well as over the working week. In other words, people will be going in and out of active work. They will be taking sabbaticals, retraining themselves and trying to find new ways of investing in new skills. If they do not do that, they will remain in long-term unemployment.

One matter is absolutely clear: it was possible in the 1950s and 1960s for someone to leave school at 15, get a job and stay in that job for 50 years. However, that kind of low skill manufacturing and construction work is no longer available. Those jobs have gone. They have migrated abroad and people carry out those jobs abroad for one-tenth of the wage that we would pay here. I am not against that system. I do not seek a protectionist world. All I am saying is that as those jobs have migrated abroad we must create new jobs and new working practices.

One aspect of creating new working practices is to consider work as a flexible experience over a person's life cycle. If we can think of it in that way, we shall no longer think in terms of full employment as we did in the past but rather in terms of what Professor Christopher Freeman of the Science Policy Research Unit at Sussex University has termed the active society. People should remain active throughout their life cycles, whether that involves working, retraining or obtaining new skills, and occasionally perhaps taking a holiday as and when they wish.

We need to think in terms of people being in productive employment, or a productive occupation, throughout their life cycles. If we are to achieve that state of affairs, we shall need to rethink a number of issues. In the UK and across the world people still think in terms of retraining people for low level manufacturing skills—metal bashing. I believe that era has passed. We need to train the long-term unemployed and those who have recently left school in information technology. We should aim to give people a minimum level of computer literacy and to give them the ability to handle information technology equipment. This is as important as the three Rs. We need to give every school leaver a basic level of information technology awareness. We need to do the same with many adults who are either employed or unemployed. If we do not do that, our labour force will rapidly become de-skilled. We need to adopt a proper policy on information technology education.

If people are to adopt flexible working hours and are to be flexible as regards their work location, we will need to rethink a number of our tax and benefit policies, as the noble Lord, Lord Birdwood, has already pointed out. I wish to propose a scheme in this regard although I have no hope that the Government will pay the least bit of attention to it. I believe that we should have a basic income guarantee for our citizens. If they were given a guaranteed flow of income, they could take up work at flexible wages. Thus people could take time out of work to retrain themselves and would not have to exist on unemployment benefit while they did so. We should be able to enable both women and men to undertake child care or care of the sick or elderly without having in addition to take on low-paid work when they do not wish to do so.

The matter that should concern us is whether people can pay their dues to society over their life cycles. If they can do that, we should be happy to allow them to work when they wish to do so and to take on whichever work they wish to carry out. To allow that to happen we must remove people's fear that unless they remain constantly in the labour market, or are constantly seeking work, they are likely to suffer a considerable drop in income. My proposal may seem to be a distant Utopia but I believe that we should give some thought to changing our tax and benefit systems to enable people to pay their dues to society over their life cycles without being penalised financially.

Far too much importance is attached to having a job in a formal labour market. As the noble Lord, Lord Birdwood, pointed out, a number of male workers have dropped out of the labour market. Many of those people are active but they are not in the labour force because it does not pay them to be in the labour force because of the costs associated with working. We have established a tax and benefits system which constitutes a massive disincentive to work. It is now time for us to think of ways in which we can stop taxing employment and start encouraging it.

The noble Lord, Lord Birdwood, was correct to point out that in the document that M. Delors has issued there are indications of a willingness not only to think about competitiveness and flexibility, but also to consider how important it is to invest in information technology as that is the area which will create sustainable, high paid jobs for European workers in the future.

We will not be able to revive the old manufacturing industry; that has gone. We will have to create new industry— that may be services or other forms of industry —that will involve a highly skilled labour force for which our workforce will be trained. Flexible working clearly has many ramifications. After this debate has concluded I hope that a private or public charity, or the Government, will consider all the ramifications of flexible working and will consider what kind of new policies we need to adopt to encourage flexible working and to restore full employment.

5.16 p.m.

My Lords, this debate has been opened by two thoughtful statements with which I find myself almost entirely in agreement. I wish to express my gratitude to the noble Lord, Lord Birdwood, for giving us this opportunity to debate the matter. I am in agreement with some of his final comments; namely, that what one would expect from government in this important area is partly to set an example in their own areas of employment and partly to remove obstacles. Beyond that, flexible working is one of those values which must be largely in the hands of employers and employees, and in that sense subject to a favourable climate to which government can contribute but not subject to legislation or direct government action.

I find myself very close to the noble Lord, Lord Desai, especially as regards his opening comments on the importance of changes in the nature of work. It was not one of the great moments in human history when work and the rest of life were separated to the extent to which they have come to be separated in the job society. It would be a great step forward if we were able to use modern technology, as well as our social and organisational imagination, to interweave work and life much more than has been the case for an important century in the history of mankind, if not more. Incidentally, as long as work and life were interwoven, the phenomenon of unemployment virtually did not exist. It is true there were periods in which people did not have enough to do and it is true there was poverty, but unemployment in the sense of not having a job and thereby losing the basis of life is itself a part of an organisation of life in which jobs and everything else we are doing are so largely separated.

Some of us are fortunate. Those, for example, who are academics on the whole should have a flexible life in which what they are doing and their lives in general are interwoven and closely related, although I am bound to say that the subject raised the other day in your Lordships' House by the noble Lord, Lord Annan, on the bureaucratisation of academic life and other matters has been a movement in the opposite direction to the one we desire to have. That does not apply only to academics. It applies to the self-employed. It would be highly desirable to provide opportunities for such flexibility for those in employment.

There are two questions which I should like to put to your Lordships without necessarily expecting an answer from the Government. The first point is that flexible working has to involve an increase in choice. That increase in choice will only come about if one achieves something which is rather complicated; namely, matching individual wishes and organisational needs. That is not an easy thing to do. That is particularly true in the area of public services, where the rest of the population rightly expect certain services at certain times and where matching that expectation on the part of consumers with the wishes and desires of those who provide the services can be exceedingly difficult. Examples come readily to mind.

I may well be wrong, but my guess is that the longer what the noble Lord, Lord Desai, calls the cycle or the period over which flexible arrangements can be made, the more likely it is that individual wishes and organisational needs can be matched. In other words, to use not very beautiful jargon, flexi-years are better than flexi-months, and flexi-months are better than flexi-weeks or flexi-days. Ideally, we should like to reach a situation in which there is the kind of flexibility over the entire cycle of our lives to which both the noble Lords, Lord Birdwood, and Lord Desai, referred.

The second point is an even more serious one. We must beware that the notion of flexible working does not become an excuse for a return to casual working on a large scale. We already see much of that at all levels of employment. It is perfectly acceptable for young graduates and school leavers to do a bit of waitressing, to drive vans to markets with goods, to work as part-time secretaries with limited term contracts, or even to work as research assistants in your Lordships' House, but there comes a point at which those young people want a longer perspective. That is even more true for those who do not have the choices which I have just indicated.

I confess that I am sometimes horrified by the extent to which the principle of casual working has returned at all levels. My eldest daughter works in a large and excellent international organisation in which she has extraordinary responsibilities for resettling refugees in a war torn country. She is employed as a consultant, for the sole reason that that is a more flexible method of employment than giving her a proper job. It really means that she has full responsibility for the task with which she is faced but she does not have the perks which would go with the job; neither the security nor any of the other advantages.

Every now and again I wonder whether we are not witnessing a re-casualisation of work. Recently I reread what William Beveridge—who was quoted several times earlier this afternoon—said earlier this century when around 1905 or 1906 he first took an interest in unemployment. He identified three types: redundancy, caused by technological innovation or the decay of industries; cyclical unemployment; and what he called chronic under-employment of the casual labour market. I am serious in saying in the context of this debate that we must beware of returning to the wasteful and ultimately costly forms of casual work which were so widespread a century ago and which in some ways we have overcome. However, I am wholly in agreement with the noble Lord, Lord Birdwood, in adding that they were overcome by methods which were rigid and in their own way costly and were in no sense the last word on the subject.

That takes us back to public action and to government. The structure of taxation will undoubtedly have to adjust to changing methods of work. Perhaps it is already doing so, without much planning or intention. To the extent that flexible working in some ways involves re-casualisation, we have to find methods of providing those public services to which everyone is and should be entitled in ways which are available to those who work extremely flexibly over a year or a lifetime. If we do not want that, we have to find some other method.

I am not quite sure why the noble Lord, Lord Desai, half apologised for his interest in basic income guarantees. Without any apology let me say for my own part that I believe that some means must be found of providing not minimum wages, which are one of the most rigid, destructive and unfortunate inventions in the industrial scene, but a guaranteed basic income for all, whether housewives or casual workers and whether young or old. Some way should be found to move in that direction. For some time I have been in favour of exploring more closely methods such as the so-called negative income tax, which would provide some minimum guarantee of a standard of living. If we can combine that kind of guarantee with the great advantages which technology and organisational imagination have given us in strengthening the opportunities of interweaving work and the rest of life, then we can achieve all the gains of flexibility without the costs of re-casualisation.

5.27 p.m.

My Lords, when my noble friend Lord Birdwood asked me if I would say a few words in this debate I naturally accepted with alacrity. It was only after an hour or two's mature reflection that I realised that I was not entirely sure what he meant by flexible working. He had left the House by then so I had to make a guess.

It could, for example, have meant the ending of job demarcation—a concept which I am glad to say is increasingly accepted at all levels of the trade union movement and industry as a whole. It could equally have referred to flexible hours—the principle that as long as one turns up at the office for eight hours a day it does not matter too much when one turns up, thereby relieving pressure on the transport system. I am sure that that sort of flexible working is useful in solving the problem, but obviously technically it is practical only in certain circumstances. Finally, flexible working could have meant —as my noble friend has now enlightened us—the lessening of the requirement slavishly to turn up at an office or factory on a daily basis; namely, remote working.

Until someone comes up with "Beam me up Scotty" technology —perish the thought—it is most unlikely that the car worker will be able to take his work home or the fisherman to fish from his sitting room. Equally, there will never be a substitute for the face-to-face meeting in business. Nevertheless, this is essentially a debate about productivity and how best to use the working day. When I am not attending your Lordships' House, I spend four hours a day travelling from Hampshire to London. Of necessity, that four hours limits the amount of time I can spend working productively and the energy that I have to put into my work, especially when that four hours is turned into six or eight by the IRA, engineering failures, leaves on the line, or some other excuse from British Rail. Commuting may help to stem the losses of British Rail, although in theory at least commuters put more pressure on the transport system than they provide by revenue or profitability. But commuting does nothing for personal productivity.

As my noble friend has touched upon, the solution is telecommunications. It may not be fashionable at present to pay compliments to the Government but, perhaps by design although I am sure that some would say by accident, the Government have got one aspect of the problem right. They have created the most deregulated and competitive telecommunications environment anywhere in the world. With such peripherals as fax machines, personal computers and the host of further developments which are just minutes away from the retailers, the remote office is a real possibility. BT, Mercury, the cable television companies, the mobile phone operators, and indeed British Rail itself, are all competing in a way which within a short period of time will bring high capacity digital links right into the home at affordable prices. My noble friend used the expression, "Let us take the work to the people rather than the people to the work". I should like to rephrase that. Let optic fibres rather than steel rails become the commuter highways for the future office worker.

The Government have assisted that process. I hope that in future they will do more and will look at ways to encourage remote flexible working. The noble Lord, Lord Dahrendorf, touched on the idea of fiscal incentives. Perhaps I may point to one small and rather silly disincentive to working at home. I understand that the Inland Revenue will seek to charge capital gains tax on a proportionate basis when one comes to sell one's house if one has used one room permanently as an office. Obviously with communication links it is not easy to use different parts of the home and thereby avoid the charge. I give that as one small example of something that can he done.

The environmental effects of eliminating commuting alone would be of massive benefit to society. But increased productivity, reduced stress and improved lifestyle are the ultimate benefits of flexible working for the workforce.

5.32 p.m.

My Lords, today, for me, and I am sure for the noble Lord, Lord Henley, too, the calendar seems to have taken a leap from the first Monday in your Lordships' House in January to the first Monday in September in Canada or the USA, in other words to Labour Day, when all manner of people can celebrate the opportunities of offering or partaking in meaningful employment. We are all indebted to the noble Lord, Lord Birdwood, for focusing our attention on this vital subject and for offering us the chance to debate flexible working in all its aspects, in particular the technology route into jobs for disabled people.

Those of us whose earliest days at school were blighted by crossed nibs and dried-up inkwells as we strove to keep up with our teachers' dictation or their squeakily chalked notes on the blackboard, are astonished and a little envious of the latter-day pupils who are computer literate almost from the cradle, and whose access to technology has liberated them from so much repetitive drudgery.

This technology has also liberated many disabled people with astonishing facility from earlier years, none less than those with learning disabilities. One of my MENCAP colleagues who works with children with severe learning disabilities says that he uses speech, which they lack, to ask them to work information technology which is quite beyond him. That is a massive leap forward, I think your Lordships will agree. And if that applies to those with learning disabilities, it imposes no great strain on the imagination to project such advances on those with physical or sensory disabilities.

As chairman of MENCAP, I have been delighted to see MENCAP's Pathway Employment Service find paid jobs for people who only a short time ago seemed condemned to spend the rest of their lives doing nothing in particular, getting nothing for it and nothing from it either. Children with learning disabilities can now enjoy computer-assisted learning at school and thus cope with computer assisted jobs when they reach adulthood and move into the wider world outside. Of course, they need some support and understanding from their future employers. But if that is forthcoming, as it should be for all disabled people—and will be once antidiscrimination legislation is in place and Access to Work is achieving its goals without let or hindrance—then anything is possible. Technology can supplement or replace muscle power, sight, hearing or verbal communication. It can also break down other processes into manageable parts for people with learning disabilities and should be as readily available as the knocker-up or alarm clock in days gone by to ensure that one got to work on time.

With your Lordships' permission, I should like to tell you of two cases reported by OUTSET, an organisation working with people with a range of disabilities. The first relates to 19 year-old Lisa, who has a learning disability. She successfully completed a two-year information technology course and is now taking one on food hygiene for her job with a large retail chain. Another example is 22 year-old Tracy, whose course on information technology and business skills has led to a job with a property firm. OUTSET would willingly supply noble Lords with many other shining examples if they were minded to contact it.

MENCAP's Further Education College at Pengwern in North Wales has led the way in developing technology to enable people with learning disabilities to process information for stock control and accounting. The system is already linking community units with the students in charge; and there is scope for a much wider development of this model. I trust that this well-motivated commercial will be noted by more than just those who read Hansard! Currently, community care plans show that many local authorities—which should read Hansard, but I have my doubts—are reviewing their day services. The Government could help by feeding into that process the experience of work schemes which use that new technology.

For instance, as we stand at the beginning of a new year, could we not commit ourselves to shifting many old-fashioned adult training centres away from the outmoded subcontracted work of packing goods into boxes towards a greater role of loading information on to disks, thus helping many more people with learning disabilities into open employment? Technology has shut some employment doors, but it can open far more that were formerly bolted arid barred by problems—some imagined, some real—posed by travel, access, disability and, above all, prejudice.

MENCAP would be delighted to help as a locksmith and cut the keys. I believe that we could indeed provide this service while you wait.

5.38 p.m.

My Lords, I rise to speak in the debate today not as an expert in the field of information technology, flexible working, teleworking, telecommuting or call it what you will, but as one who is keen to embrace all the benefits of the so-called post-industrial technological age in which we find ourselves living.

Not all the effects of this new age have been beneficial but the opportunities which arise from flexible working are numerous and many of them are still to be discovered. Harnessing technology to enhance our quality of life is a cause in which I strongly believe. I venture to suggest that it is widely supported in your Lordships' House. I am therefore extremely grateful to my noble friend Lord Birdwood for raising this subject and for sharing the comprehensive knowledge that he has with us today.

Who is a flexible worker? I suppose that on one level he or she could be described as anyone who from time to time uses a fax machine and a telephone to work remotely from his office. Already many millions of us do that on an ad hoc basis, and they should not be underestimated for it has been estimated that if all of us worked just one day a fortnight from home it would do away with traffic jams at a stroke.

On another level, the teleworker or telecommuter is someone with computer knowledge who can utilise and work on data transmitted down a telephone line or bounced off a satellite. The enlightened privatisation of British Telecom by the Government, which was touched on by my noble friend Lord Torrington, has created one of the most advanced networks in the world, with most exchanges now being digital. That enables a system known as ISDN (Integrated Services Digital Network) reliably to transmit data at speeds of 64Kbits per second. Translated into language we can all understand, that means that the full text of Hansard, which I have estimated covers 44 pages on a typical seven-hour session, can be transmitted anywhere in 35 seconds and at the same cost as a normal telephone conversation. Information technology, therefore, has come of age.

The advances being made are staggering and it seems that the only limiting factor is man's imagination. We have come a very long way since the beginning of the last century. In the Napoleonic wars, when my great-great-uncle was Prime Minister, it took the best part of three days to receive news from the battlefields, and the messengers must have lived what can at best be described as a hazardous existence. The fact that the legendary Nathan Rothschild had a speedier messenger service than the Government, and was therefore able to use his knowledge of the victory at Waterloo to make investment decisions earning him a fortune, is now part of history books. This brings graphically to bear the importance of information and how we act and react to it. Information can now be both transmitted and received around the world in seconds, so we are now truly a global village.

It is for that reason that we must not let the grass grow under our feet. As has already been said by my noble friend Lord Birdwood, we have a two-year lead, or something like that, on our competitors and we must ensure that we do not lose out to other countries. I believe that there are already companies which employ people living in India to telework: processing data and doing programming itself. They have a particular talent in this field but one of the reasons the work is being exported is because of the competitive labour rates and taxation arrangements which the Indian Government put in place.

Another reason that India and Pacific rim countries are benefiting from work exported from this country is the efficiency gained from utilising time zones to best advantage. As part of the global village, we can both import and export work to take full advantage of these time zones.

However, there is one area which has already been touched on and which is restricting our progress in flexible working. That is the taxation environment. If you hire a UK resident to do teleworking, it is usually difficult for him or her to qualify for Schedule D assessment. He or she has to go on to PAYE and then there is national insurance and other incentives such as the CGT penalty on which, again, my noble friend Lord Torrington touched. However, if the work is exported and simply invoiced there is, of course, no employers' liability when contracting foreigners work for UK companies. This is an area to which I very much hope the Government will give urgent consideration. If my noble friend the Minister can give some reassurance on the point I shall be most grateful.

We have already heard from other noble Lords about the benefits which can accrue from the expansion in flexible working and I should like to add my voice in support. If companies can fully grasp the concept of "outsourcing" and become comfortable with the idea that much of their in-house work can be done remotely from the office, then there is a veritable Aladdin's cave of benefits. It can bring employment back to the regions. I live in north Nottinghamshire where there is a high level of unemployment in some areas as a result of the mine closures. I am therefore particularly pleased to see the Government initiative taking place in Grimethorpe.

Further, it can improve local community life and bring disposable income into the communities themselves. It can give work to the handicapped. It can dramatically reduce wear and tear on the road system and infrastructure and, in that connection, for those fortunate enough to be employed in this way, it can do away with the need to commute to work, which is surely one of the most uncreative and at times frustrating activities ever invented by man. It can improve the quality of family life—and let us not forget that 1994 is the Year of the Family.

On that point, I wish to mention that I read an article in The Times dated 6th January with the caption "A million children are left at home alone" by working parents. That is a staggering situation and, of course, flexible working would do much to alleviate and minimise it.

Returning to the benefits of flexible working, it can dramatically reduce pollution. One man driving seven miles to work in an average car produces 1.2 tonnes of carbon dioxide gas per year. The Department of Employment estimates that by the year 2010 we will have 10 million flexible workers, so that the output of this greenhouse gas could be expected to be reduced by many millions of tonnes.

Another benefit is that work can be carried out when weather conditions would otherwise prevent people from getting to the office. That was one of the many advantages identified by British Telecom when it carried out what has become known as the Inverness experiment.

So it goes on. Indeed, the only possible losers I can think of would be the office developers; but even here there is a shining example of the ingenuity of that marketplace. Only last week I read in Computer Weekly that a property company was building a televillage on the edge of a town in the Brecon Beacons National Park. The same article informed me that there are currently 75 telecottages operating in the UK.

We live in fast-changing times and informing ourselves and being brave enough to grasp the technology is perhaps the greatest barrier. In this connection, the Henley management college is doing excellent work in bringing about something called the Future Work Forum. This is being actively supported by the big players in industry and telecommunications itself, including British Telecom and Mercury.

On 9th December, The Financial Times carried an article written by my right honourable friend the Secretary of State for Employment. It was entitled "Flexibility is a friend of the jobless". I should just like to quote one sentence from it:
"It makes good sense to develop new and more flexible working patterns".
I therefore take heart that the Government broadly support flexible working and I shall look forward to receiving my noble friend's assurance that that is so.

5.48 p.m.

My Lords, I should like to thank my noble friend Lord Birdwood for providing the opportunity for this debate today. A number of the things that he said came close to my own heart. I am certainly no expert in modern communications but, as I shall explain, I have learnt quite a lot in the past year on the subject.

I shall limit my contribution to the subject of network marketing which is relevant in all respects to the Unstarred Question which we are debating today. I must declare an interest to your Lordships at the outset: I myself have been involved in network marketing for some 14 months. That is not a long time, but after taking every available opportunity to read books and to listen to more experienced network marketers, I feel confident to speak in your Lordships' House today on the subject.

I expect that many noble Lords will have heard or read in the press something about network marketing. For those who know about it, I trust that they will forgive me if I briefly encapsulate the essence of the subject. It is all about a lot of people just doing a little bit each, and recommending to other people products which they believe in and from which they receive a benefit. While doing so they may also tell the other people about the business opportunities which network marketing offers.

All noble Lords will be au fait with certain forms of retailing: traditional retailing; namely, things that we buy in the shops, and how they got to those shops through a myriad of different middlemen. We are all aufait with mail order; we probably received a massive bunch through our letter-boxes before Christmas. And of course there is direct selling.

Network marketing comes under the category of direct selling, but is quite different from direct selling in the accepted sense. Proof of that is to be found in the fact that 95 per cent. of the people who become involved in network marketing neither are, nor want to be, trained sales people in the accepted sense. People from all walks of life, of all creeds and all colours, can take part on a full- or part-time basis—hence the flexibility. It offers an equal opportunity to everybody, as I have come to discover. At this stage I will add that it is my dear hope that we can perhaps somehow bring in people who are handicapped. I have a handicapped sister who is deaf and cannot speak, and I should like to make this opportunity available to people like her.

People can earn a small or a part-time income to supplement their other job; or if they want to, they can build up a long-term passive income. Anyone who has ever set up his own business will know that there are considerable overheads: rent for the office; staff, if one is to have them; investment in stock; equipment, and so on.

We are all also au fait with franchising. It has become part of our life over the past 15 years. Franchising may cost many thousands of pounds, but it is an accepted way of starting up a business. Such cost is beyond the reach of many people. In network marketing there is no expensive start-up cost, and there should be no necessity for a large investment in the product. In the direct selling industry, according to the Direct Selling Association, there are some 470,000 people. In 1992, sales were achieved to the tune of £832 million (the latest available figure). Twenty-three per cent. of that total, £189 million, was attributable to network marketing. That figure was up 21 per cent. from 1991, and three years ago the network marketing figure was only 10 per cent. of the whole.

The number of people involved in the industry is steadily increasing. According to the DSA the most up-to-date information suggests that some 239,000 people are involved in network marketing, which is over 50 per cent. of the number in the direct selling industry, and that accounts for about a quarter of the total sales. By way of background to that, the November 1993 employment figures from the Employment Gazette show 23,918,000 people in employment, which included 2,877,000 in self-employment, of which 2,402,000 were full-time and 475,000 were part-time.

I close by asking the Government to recognise that network marketing makes an important contribution to the economy—something under 2 per cent. of GNP. ask the Government, in future, to look at people who are running small businesses in a favourable way. I use one instance. At the moment people who do not achieve a VAT turnover have to register for VAT, otherwise they suffer a penalty because they buy the product with VAT on the retail price from the manufacturer. The rules are somewhat different in France and Germany.

5.54 p.m.

My Lords, I have learnt a lot from this discussion. I am so glad that the subject has been treated so positively and that it is not a matter of party political dispute.

I suppose the most startling indication of the way in which the labour market is changing came with the publication last month of the news that eight out of every nine jobs created since June 1993 have gone to women. In contrast, as the noble Lord, Lord Birdwood, said, employment among men has barely begun to recover after a four-year decline. Most relevant to the Question that the noble Lord has asked is the fact that the growth in women's employment has been strongest in flexible, often part-time, jobs which are largely in the services sector and are in many cases suitable for older people. Employers needing to recruit and retain skilled staff will simply have to adapt to these changing conditions if they are to remain competitive. As the director general of the CBI said recently, companies need the best people available, not just the best of half the population. In other words, the cost of having flexible work patterns must be calculated against the greater cost of not having them.

Nor is this situation a temporary phenomenon. Demographic changes mean that over the next decade an increasing proportion of the workforce will have caring responsibilities for children, elderly dependants or disabled relatives. Already, individuals seeking a more balanced life are making demands on employers to change the way in which working time is organised. Indeed, although full-time jobs are still widely perceived as the norm, a striking fact recorded in Patricia Hewitt's book About Time is that even today only one in three UK employees is working the standard nine-to-five week. As for disabled people, the low pay and unsuitable working conditions of conventional part-time employment can make it an uneconomic alternative to state benefit. No doubt that is why a recent report concerning disabled workers states that the need to work restricted hours must be viewed in the same light as the need for special equipment or adaptation of premises.

More positively, flexible working, particularly that which enables employees to spend some or all of their working week at home or working from home—so-called teleworking, to which the noble Lord, Lord Birdwood, referred at length—gives people who have mobility or sight problems the opportunity to contribute to improved productivity by undertaking high quality information processing work.

The Question of the noble Lord, Lord Birdwood, refers to the quality of life. A CBI survey has found that family responsibilities are one of the main factors that are commonly thought to be behind absenteeism. That affords an added reason for making use of flexible working, thus reducing absenteeism brought about by stress and enabling staff to pursue their careers on a flexible basis rather than losing touch by having to take an enforced break in their employment.

In seeking information relevant to the Question that we are discussing, I have been struck by the number of options that allow flexibility in the management of working hours: flexi-time; academic term-time working; annual hours; a flexible working year; employment and career breaks; job sharing, and so on. I shall take just one of those options, namely job sharing, where two people voluntarily share a full-time job, dividing pay and benefits between them according to the number of hours which they each work. It is a form of employment dear to my heart because I have a daughter who shares a job in local government community work. The Industrial Society has found not only that job sharing works but that it has proved a positive success from the point of view of both the employer and the participants.

I have been impressed by the evidence of Boots the Chemists, recorded in the excellent book produced by the organisation, New Ways to Work. Boots' staff relations manager says:
"When the organisation can bend to accommodate the individual, they will give that much more to the organisation. It is not simply the organisation doing what the individual wants. There are mutual benefits".
The same company's personnel director commented:
"We believe that job sharing is essential if you genuinely want to keep women in managerial and supervisory level jobs".
One of the women involved in such a job tellingly observed:
"Because I don't have tomorrow at work, I have to be more efficient because I have to get things done today".
For me, that is convincing anecdotal evidence of the productivity referred to in the Question of the noble Lord, Lord Birdwood.

Sadly, long hours spent at work rather than work output are still all too often seen as indicators of performance. On that point I like the comment of Mr. John Collins, the chief executive of Shell UK:
"The quality of the time is much more important than the quantity. I would much rather see a manager who had visited an off-shore platform and made an impact there than someone who had helicoptered round 10 in a day".
Having once been responsible in a large industrial organisation for giving training in the management of change, I have been particularly interested in learning how those best qualified to judge think that inertia and resistance to less conventional working arrangements can be overcome. For a number of reasons, I have great respect for the opinions of Professor Charles Handy of the London Business School. In considering the position at work of carers, he believes that the most practical thing that can be done by an organisation which wants to help those who have responsibilities for caring for others is to ask them what they need, mainly in terms of flexibility, control over their own time and the kinds of rights and privileges that ordinary full-time workers receive.

In that connection, it is encouraging to know that an Industrial Relations Services survey of 68 organisations last year found that employers were increasingly treating part time workers on an equal pro rata basis for a wide range of employment terms and conditions. However, in a significant number of organisations part-timers continued to lose out, particularly in the case of pension entitlement. In my view, it is high time for others to follow the lead of the National Westminster Bank, which is reported to give part-time staff exactly the same benefits as full-time workers pro rata, provided that they work for at least eight hours a week.

That was the aim of the noble Baroness, Lady Lockwood, when last May she introduced an amendment to what is now the Trade Union Reform and Employment Rights Act 1993 to extend employment protection rights to employees working between 8 and 16 hours a week. I supported that amendment. In resisting it, the noble Viscount, Lord Ullswater, acknowledged that in this field there was a need to create a balance between the protection that legislation should provide for employees and the commensurate burden that employers should be required to bear. He said then that the Government had drawn the line at the point which they considered right; but he was careful to add that he was not saying that that line was immovable.

I do not wish to place the Minister who is to reply to the Question in a position in which he feels that he must now say the same. However, I hope that when the noble Lord, Lord Henley, replies, he will offer such words of comfort as he can to those who hold another view. There is no doubt that that difference stands in the way of the political consensus concerning the growth of flexible working that I am sure we all desire. More widely, I hope that the noble Lord will respond positively to the point made by my noble friend Lord Dahrendorf, with which I strongly agree; namely, that we must be careful to ensure that, in encouraging the practice of flexible working, we avoid a return to that casual working which was so damaging to society in the last century.

6.6 p.m.

My Lords, I am sure that the House is grateful, as indeed I am, to the noble Lord, Lord Birdwood, for introducing a debate on this important subject and for the manner in which he introduced it. The terms of the Unstarred Question are extremely wide, since one cannot look at the question of flexibility without looking at employment policy generally.

It is true that work patterns are changing. To my knowledge they have been changing for the past 20 years and no doubt will continue to do so. Much of the employment in the last decade has been in part-time employment rather than in conventional full-time employment. A great deal of that part-time employment, as a number of noble Lords have said, is done by women—perhaps as much as 89 per cent. to 90 per cent. of it. There has been a growth in short-term contracts as well.

In some instances there has been a development of a core workforce surrounded by casually employed people on short-term contracts or in part-time employment. The noble Lord, Lord Birdwood, referred to that development, as did the noble Lords, Lord Dahrendorf and Lord Rochester. We are often told that lifetime employment is a thing of the past. I can well recall during discussion of possible Civil Service reorganisation or new schemes for the police that it almost seemed that the expectation of a lifetime job was rather reprehensible and we should all be happy to be exposed to the hazards of the labour market. I can well understand that such an approach may have some attraction for employers, although not all of them by any means. Some regret the loss of company loyalty which is a feature of some of the new job patterns.

Therefore, while welcoming a greater degree of flexibility if it can contribute, as the Unstarred Question indicates, to improved productivity, we must examine carefully what the effect is likely to be for the majority of the working population. First, let us accept that unemployment is an unmitigated social evil. Most people want to be gainfully employed. Employment itself has a social function, That can be seen only too clearly when people who perhaps have been over-committed to their work face retirement. Many may find retirement a liberating experience—that is, if their financial resources are sufficient—but others are unhappy and disoriented by it. The noble Lord, Lord Birdwood, referred to the "tyranny" of the workplace. But that does not always seem to be a fact to some of the people involved.

It is no doubt true that some structural unemployment was inevitable because of the changes wrought by the advance of technology. Jobs which once required the employment of large numbers doing routine work can now be done by machines, often much more effectively. Advances in information technology have affected office workers, resulting in redundancies in employments hitherto regarded as comparatively secure. But the combination of the technological revolution plus the continuing recession has produced levels of unemployment which are unacceptable in a civilised society.

Unemployment among young males is particularly destabilising for the rest of the population. A. recent study indicates that there is a close association between joblessness and the offending rates of young men. A number of noble Lords have already referred to that matter in the debate. Therefore, if a more flexible approach to employment patterns could assist in reducing the numbers of the unemployed, it should be welcomed.

However, from the point of view of the employees themselves, care must be taken to ensure that flexible working does not bring with it anlooked for disadvantages. I remember way back in the 1970s that a number of leading City companies and the banks introduced flexitime—flexible working arrangements. The number of working hours a week was not reduced but the employee had a greater say in the manner in which those working hours were arranged. When first introduced it was normal to have a pilot scheme. I myself was involved in the negotiation of many such schemes. If the employees liked the scheme, then a more permanent arrangement was introduced. It was found that in most cases employees liked the new arrangements and they therefore became more permanent. That was one instance where flexibility proved an all-round advantage. But that was negotiated against a general atmosphere of job security. There was not then the fear of unemployment that now exists.

The increased amount of part-time employment, however, is not always to the advantage of the employee. Often, it is the only type of employment that women with domestic responsibilities can accept. There is, as the noble Lord, Lord Rochester, pointed out, reduced employment protection and often no access to the benefits which are available for the "core" workers—such as access to pension and sick pay schemes.

I was a member of your Lordships' committee which reported several years ago on EC draft directives on part-time and temporary employment. The EC was proposing to extend employment protection to part-time workers. The Government were opposed to the draft directive on the usual ground that it would constitute a burden on business. The committee agreed with the Commission and recommended that part-time employees should have access to pension schemes and pro rata entitlement to annual holidays, redundancy pay and seniority allowances. It is clear that without access to such employment rights "flexibility", entailing the employment of larger numbers of part-time workers, advantages the employer much more than the employee, who often has to take the only employment available which will fit in with her domestic and child-minding responsibilities. As I said earlier, it is mostly women who are affected. At this point perhaps I may say how much I welcome recent announcements by the Government concerning the need for child support services to be provided. That was a very positive statement for which I believe the Prime Minister was responsible.

Another EC directive which has some bearing on the subject is the directive on working time. It stipulates that all workers should have a statutory entitlement to at least three weeks annual holiday and that the working week should not exceed 48 hours, including overtime. At the time, and probably still, 16 per cent. of all UK workers were working in excess of 48 hours a week. The Government were also opposed to that directive, predictably, and in regard to the 48-hour provision negotiated for the UK a 10-year opt-out provision. That is shortsighted. In other EC countries—notably Germany—where the levels of unemployment are causing concern, negotiations have been entered into with the main unions for the purpose of reducing the number of hours worked by those in employment. No one suggests that that would be the whole answer, but it indicates that other countries in the EC are willing to encourage negotiations between employers' and employees' organisations to try to deal with employment and the situation in which some people work unacceptably long hours while others have no work at all and are being socially marginalised.

The question asked by the noble Lord, Lord Birdwood, is addressed to the Government: what steps are being taken to recognise the critical importance of flexibility in working arrangements? It presupposes that there are benefits for productivity and also for the quality of life. I do not disagree with that, but from the standpoint of employees there are some crucial questions that must be answered. Unemployment has a dire effect not only on those who are themselves unemployed but also on those currently in employment. It brings about a general feeling of lack of security. In those circumstances employees are less likely to co-operate willingly in the introduction of new working patterns.

Short-term contracts, in place of the continuous employment to which it was once possible to look forward, means that there is a lesser degree of company loyalty because towards the end of the contract employees begin looking around to see whether or not they might do better elsewhere. If they have seen colleagues made redundant after many years' service, they are less likely to give loyalty to the employer than they might otherwise have done. The sense of insecurity spins off into the economy, creating a situation in which people are unlikely to spend as much as they might have done, holding back the anticipated recovery. Insecurity at work can lead to stresses and sometimes to actual illness. People can become more competitive with each other in a destructive and destabilizing way.

Of course, there could be great benefits for all in greater flexibility, but it must be undertaken in an environment in which there is voluntary agreement, rather than one in which people are compelled to accept the only kind of employment available, without regulation and without employment protection, because that is all there is. Training of the right kind is critically important. I shall say no more about that because my noble friend Lord Desai has already referred to it in some depth. I await with interest what the Minister has to say in answer to this interesting and important question posed by the noble Lord, Lord Birdwood. I hope that we shall hear a positive response from the noble Lord.

6.15 p.m.

My Lords, the noble Lord, Lord Rochester, stressed that the quality of time was more important than the quantity of time. I hope that this short debate is a concrete example of exactly that. I should like to congratulate all noble Lords on their commendable brevity in speaking on what I believe is an important issue. I hope that I can to some extent reciprocate.

I start by thanking my noble friend Lord Birdwood for having put down this Question and initiating this debate and for stressing the social and economic changes that changing work practices are likely to bring us over the years and the necessary analysis that must go into that. Like the noble Lord, Lord Rochester, I should like to say that I learnt a great deal from the debate, not least, for example, from the contribution on network marketing from my noble friend Lord Annaly.

The value of a properly functioning labour market is of national importance. It contributes to job creation by firms; it adds to productivity just as importantly as do investments in machinery or infrastructure; and it enhances the quality of life by breaking down barriers to employment and by offering better access to all the labour market has to offer—career choice, better wages, higher skills and suitable hours of work, to name but a few. I cannot stress too much the importance of a properly functioning labour market. Of course the labour market cannot solve all economic problems nor meet all human aspirations, but it is of crucial importance, as stressed by my noble friend Lord Birdwood, that it plays its part, fulfils its roles and changes, as all have made clear, as technology changes. That will require careful analysis of the effects of that change.

We in the Government are committed to creating a flexible, efficient and competitive labour market—one that is capable of providing jobs and rising living standards while remaining competitive in the ever-changing international market place. But flexibility, as the noble Lord, Lord Dahrendorf, stressed, must largely in the end be a matter for the employers and employees. I should like to spell out exactly what policies have been followed and why, and I wish to lay down one or two markers for the future. Above all, I wish to rectify one or two common misunderstandings of the present labour market.

First, I believe that we should reflect a little wider than on our own national situation. As has been remarked on occasions, Britain is not alone in suffering high levels of unemployment. We are though, I am glad to say, in a growing company in finding solutions. The benefits of labour market flexibility are now widely recognised and have become of central importance to our European colleagues as they grapple with high unemployment—on average throughout the Community it is now 10.8 per cent.—and, in the rest of the Community, unemployment that is rising. At the European level we can see something of a sea-change in the way that the Commission approaches these issues. I note that the Delors White Paper Growth, Competitiveness, Employment as well as Commissioner Flynn's Green Paper on social policy contain many references to the advantages of deregulation and flexibility. Continental Europe—the Community—has made itself rigid with labour market restrictions and regulations to the extent that private sector employment growth has been all but zero for almost 20 years. The noble Baroness, Lady Turner, might care to take on board that point and take note of it as she sings the praises of such things as the working time directive. I believe that that is a shocking reality resulting from not freeing up the labour market. The United Kingdom, alone of our European Union partners, is enjoying job growth because we are creating a flexible and efficient labour market. We are now the only Community country with unemployment below the Community average and declining at the same time.

At the wider international level, both the special Group of Seven meeting—sometimes dubbed the "Jobs Summit"—to be held in March, and the OECD employment study, will share experiences and solutions. The United Kingdom does have an upbeat story to tell at these international gatherings. There is growing interest in our methods. I am confident that they will endorse the United Kingdom method. If labour markets are allowed to function properly and flexibly, I believe that the new GATT accord, for example, can be a launching pad for the growth in job opportunities worldwide.

My noble friend Lord Torrington posed the question: what exactly is flexible working? In the United Kingdom we are committed to as few barriers as possible for the creation of flexible forms of employment. Employers and individuals are best placed to decide which working patterns and employment relationships suit their needs and circumstances. Perhaps I may quote from the noble Lord, Lord Dahrendorf. Individual wishes and institutional needs should be matched, if possible. But as the noble Lord, Lord Rochester, put it, citing I believe the example of Boots, they can be beneficial to both sides and not a mere matter of beneficence from on high to the employer. There are benefits to the employee as well.

Our job in Government must be to ensure that the widest possible choice exists, that participation in the labour market in all its multifarious ways is maximised, and that employers and employees are aware of the benefits of flexible work. No one should be discouraged from participation in the labour market due to inappropriate regulations, whether old or young, men or women, able or people with disabilities, and no matter what ethnic background.

There is a wide variety of flexible working arrangements. Obviously, the best known are part-time and temporary work involving 5.8 million and 1.3 million employees respectively. Variations of these include job sharing, term-time working, flexitime and annualised hours schemes, which allow more choice about when hours are worked. Home based and teleworking schemes make it easier to work in a different place and not just in a different time. Of course, there are the 3 million self-employed who also form an important category of people working in a flexible manner.

Perhaps I may say a word or two about teleworking because that has been the focus of much of what my noble friend Lord Birdwood had to say. It has been underlined by many other noble Lords. Obviously, it can bring many benefits to both employees and employers. I hope that my Department of Employment, and Her Majesty's Government as a whole, will not lag behind the technological changes that teleworking can bring and the technological changes that lie ahead. I hope that all of us will be aware that the effect of all these technological changes must be looked at most carefully. They obviously require the most careful analysis. I do not believe that we should immediately assume that all of them, like some magic wand, will solve all the problems which noble Lords have put forward. They will not necessarily solve all the traffic problems such as those to which my noble friend Lord Liverpool referred, or the problems of pollution. One must obviously consider what changed travelling arrangements will amount to if they take up teleworking.

Obviously, many jobs could be done by means of teleworking. Perhaps I may take a lighter note and look at this particular problem. I look with somewhat mixed feelings at a future when debates in this House are conducted by means of a video-link. I trust that at least one member of the usual channels will take on board my desire that debates in this House will continue to take place in this House rather than by means of some advanced form of teleworking.

I also wish to stress the value of teleworking. That was stressed by my noble friend and by the noble Lord, Lord Rix, who brought his considerable experience of these matters to this debate. I refer to the value of enabling severely disabled people to participate in the labour market. My department certainly recognises that fact. We are able to provide equipment to allow teleworking under the Special Aids to Employment Scheme. I can reassure the noble Lord—we were discussing access to work earlier today—that that will continue to be available under the Access to Work Scheme.

Flexible working is not just for women and mothers looking after children. Men and women of all ages are finding it more attractive and convenient than the traditional pattern of nine-to-five, Monday to Friday. Neither do I believe that the growth of flexible work, in particular, part-time work, can be linked to any alleged feelings (possibly implied by the noble Baroness, Lady Turner) of insecurity. I believe that surveys show that forms of works such as part-time working, are increasingly popular. I refer the noble Baroness to the labour force survey made in the summer of last year. That showed that only 13.5 per cent., which is a very small percentage of those involved in part-time work, wanted to take up full time employment but were unable to do so.

Perhaps I may now say a word or two about the noble Lord, Lord Dahrendorf, and I believe the noble Lord, Lord Rochester, who expressed concern about casualisation. It is important not to get this out of proportion. At present I understand that something of the order of 1.3 million employees (about 5.9 per cent.) in the United Kingdom are in temporary work. That has been roughly stable over the past decade. We have fewer temporary workers than France, Germany, Japan and Australia. Surveys show that employers generally use temporary workers to provide short-term cover for absentees to match staffing levels to peaks and demands—for example, seasonal peaks—and to provide specialist skills. I also believe that temporary work can be a very useful entry or re-entry point for people who have been unemployed. One-third of the temporary workers in 1991 were not working at all in 1990.

I shall now say a word or two about employees' rights, which is a concern both of the noble Baroness, Lady Turner, and the noble Lord, Lord Rochester. I am sure that I do not need to remind the House of our full commitment to employees' rights in a flexible labour market. Many employment rights such as those relating to health and safety, race, sex discrimination, trade union membership, and time off for antenatal care, apply to all employees regardless of hours of work or length of service. I refer to part-time employees who work 16 hours or more. The noble Lord, Lord Rochester, was referring to 18 hours, but I believe that his figures were muddled and he meant between eight hours and 16 hours; no doubt he will find time to correct that. Those workers who work 16 hours or more a week, do qualify for the other main employment rights after completing two years' service. Part-timers who work between 8 and 16 hours a week qualify for those rights after five years.

I have to stress, as the noble Lord, Lord Rochester, mentioned, the words of my noble friend Lord Ullswater, in responding to an amendment during the debates on last year's Bill. Quite obviously, we need to strike a balance between employees' rights and the burden on employers. I believe that we have got the balance about right. I also believe—and this is just as important—to get the balance wrong would be to reduce the total number of job opportunities on offer. That would serve nobody's interests whatsoever.

I appreciate the other anxieties raised by a large number of noble Lords; namely, the tax and fiscal points. They were raised by the noble Lord, Lord Desai, my noble friend Lord Birdwood, the noble Lord, Lord Dahrendorf, and my noble friends Lord Torrington and Lord Liverpool. Obviously, there was some criticism of the tax structure and various other points. I was asked to make sure that my honourable and right honourable friends in Her Majesty's Treasury took on board the various points they made about the tax structure adapting to the times and making a flexible labour market possible.

I believe that it was the noble Lord, Lord Desai, in particular who said that everything he said would be ignored. Everything he says will be taken notice of by my honourable and right honourable friends, but whether those arguments are accepted is quite another matter. I will ensure that points made by noble Lords about the need for fiscal changes—if we are to continue keeping a flexible working market—will be taken on board. The noble Lord would not expect me to comment in any greater detail.

Let me conclude by saying that pay realism and flexibility, though imperative, are not the whole story. There is little point in having job vacancies if there are not the right type of people to take advantage of the available opportunities. We are keenly aware that the quality of the labour force determines the long-term sustainability of employment growth.

There are fewer and fewer jobs available for under-qualified people. We must therefore target our active labour market policies to best effect—to re-equip and remotivate those who are in danger of being excluded from participating fully in the labour market, and to encourage the private sector to invest more in the skills and initiative of their employees. I believe—and here I think that I can speak for all parties—that the noble Lord, Lord Desai, and others, were right to stress the vital importance not just of training but of continuous training throughout any individual's career in the changing world in which we live.

The £1.4 billion annual budget of the Employment Service has a target of placing 1.47 million unemployed people in jobs during the current year through a host of schemes. Employment Department expenditure on a variety of training, enterprise and vocational programmes is set currently at some £2.8 billion. The Prosperity through Skills document, which I am sure many noble Lords have seen, which was published last month by my right honourable friend the Secretary of State, sets out what is to be achieved. I recommend that document to all noble Lords who have spoken today.

Together with the modem apprenticeships announced recently, and the commitment of the private sector, those measures are intended to be a cost-effective means of preparing the UK labour force for the challenges of a future in which skills and productivity will be essential ingredients of global competition and technological advance.

House adjourned at twenty-eight minutes before seven o'clock.