End of the full-time working world as we know it

THE return of Gillian Shephard from her holiday in France to defend the Government when the unemployment figures are published tomorrow shows that the issue is still politically sensitive. Sending for the Secretary of State for Employment gives the impression that the Government is doing something, but Mrs Shephard's arrival is a PR exercise. It can change nothing.

British unemployment levels, however disturbing, are merely in line with the European average, despite the depth of our recession. Even supporters of the Government would admit that 13 years of measures to cut joblessness have achieved very little.

Mrs Shephard is coming back because politicians still feel compelled to approach unemployment in the same old way, even though dramatic changes are ahead. If the Government carries out its plan to cut the period for which unemployment benefit is paid from 12 months to six, the debate will continue on familiar lines: supporters will argue that social security funds have to be targeted towards the most needy, and that blanket provisions should be cut; opponents will argue that the jobless are being further attacked by a heartless government.

Neither side will acknowledge the reality: that European countries all have systems of unemployment benefits which assume that unemployment is a transitional period people go through between one full-time job and another. Yet the employment market now is changing utterly: the old jobs will never come back.

Demography dictates that the current European unemployment problem will soon be reversed. Although there will still be many people without jobs, Europe will at the same time face an increasing labour shortage simply because the number of people of working age will decline as a proportion of the whole. Furthermore, the jobs that are created will be unlike the factory jobs of the past. They will require higher degrees of education and training, they will frequently be part-time, and they will increasingly involve enticing the retired back into employment.

The task for anyone trying to reform policy towards the labour market is twofold. We need a tax and benefits system that reflects the market as it will be in the next century, not some idealised dream of the Sixties. And we need education and training that fit people to the new jobs, not to those that have disappeared.

On the first point, the benefits system has to take into account a wide variety of situations: people who have had full-time jobs and would like them again, but who meanwhile are working part-time or are self-employed; people who are bringing up families on their own, but who are able to work for part of the week; the retired or the 'pre-tired', people approaching retirement age, who may wish to work part- or full-time; students who want part-time work; adults who wish to move back into education for a period; and so on.

Behind the present social security system is the assumption that everyone wants to work full-time. This ignores the fact that many jobs are profoundly boring, or that many dual-income families have been forced into the two-earner position as it is the only way to maintain the living standards which a one-earner family had a generation ago. Ideally, people ought to be able to make a graduated choice between work and leisure: if they want to trade the goodies of a consumer society for working only a few hours a week, they should have the ability to choose. To fill the jobs of the future we need a more flexible workforce - people who make this choice. The present tax and benefits systems of Europe, earnest and well-meaning as they are, have become a barrier. On education and training, the debate has become equally politicised. The variety of schemes devised in the Eighties have been criticised as candyfloss, designed purely to get people off the register. That charge may be justified, but the much more substantive line of attack is not that the training was politically motivated or inadequate: it is that it was training for jobs that had gone.

The truth is that no one knows what jobs will be available in 10 or 20 years' time. To answer that would require an idea of Europe's advantages vis-a-vis the other two big economic blocs: North America and the Far East. The jobs may be in crafts, or creative arts, they may be in areas of high technology, but no one knows. The best equipment for school leavers is probably literacy and numeracy: then they will be able to learn the new skills they will need 20 years from now.

Meanwhile the country has to make the best use of the skills it has, and lift these where possible. That does not necessarily mean throwing taxpayers' money at employers; it may mean allowing people who wish to improve their skill levels to move freely out of the labour market for a period without being penalised by a rigid social security system.

The debate about unemployment is taking place at the wrong level. It ought not to be about who is to blame. The Government is not responsible for a Europe- wide shift away from old-style factory jobs. (And when the predicted labour shortage starts to bite, government cannot take the credit for declining unemployment rolls, which will be principally the result of a fall in the birth rate 20 years ago.) Instead, we should be discussing how to fit the tax and benefits system - and education and training - to a much more flexible concept of working.