Leading Article: Flexibility means giving workers support

Could it be that the Conservatives are a touch unnerved by this week's TUC? It seems that all the talk this week about low pay, job insecurity and unemployment has left our government ministers feeling a little defensive. Yesterday William Waldegrave, Chief Secretary, went to great lengths to convince us that the flexible, deregulated labour market his government has done so much to promote is really much better for the poor, the jobless and the anxious than everyone thinks.

Times have changed. Before the recession, few Conservative ministers would have felt the need to defend themselves in this way. Freedom and flexibility were the great buzz words in the employment field, credited with creating hundreds of thousands of jobs in the Eighties boom. Why knock it, when the results for almost everyone seemed so good? If you lost your job then, you could get on yer bike and find one.

Half a decade later, British voters are clearly not as impressed with the Government's employment record. The nation is at least ready to listen (even if not to be convinced) to the kinds of arguments aired at the TUC this week. It is true that the TUC's chosen figure for the minimum wage (pounds 4.26 an hour) is far too high, and the employment rights they advocate are too restrictive and retrograde. But the political point remains: the public is now more willing to listen to the left's criticisms of the Government's attitude to workplace stress. Job losses among the middle classes in particular, and the perception that available work is increasingly temporary, low paid and part time, are having an insidious effect on the economic confidence of swing voters.

Enter Mr Waldegrave, charged with talking down the feel-bad factor. According to our Chief Secretary, all is well among the workers. Job insecurity, he says, is no worse than it ever was. People in low-paid temporary work quickly move into higher-paid permanent jobs. And any alternative to the Government's existing strategy would be bad for employment and the economy. The Government's deregulated jobs market, he argues, makes everyone better off.

Up to a point, Mr Waldegrave is right. There is very little evidence that middle-class jobs are really more at risk. Moreover, in a world of rapid technological change, preserving old outdated jobs is not the answer; we have to keep creating new jobs to keep up with the competition. Many of the employment reforms instituted by the Conservative government over the past 20 years have indeed injected a vital (and previously lacking) element of flexibility into the jobs market. This has accelerated the rate of new job growth.

So far so good. The trouble is that while employers have flexibility, many employees do not. Businesses can easily hire, fire and create new jobs. But that is no good if their redundant workers lack the flexibility to adapt to the new jobs or to cope easily with the transition. Take another look at the figures. Half the people in temporary work are in permanent jobs a year later. Only half? What about everyone else? With temporary jobs on the increase, that means an awful lot of people are stuck on the edge of the jobs market, moving from employer to employer, with spells of unemployment in between. Even more worrying, the ones who do not get the permanent jobs afterwards are more likely to come from households where no one else works.

The Government is right that many people do move fast from one job to another, up the employment ladder. But a significant proportion of the population is not so fortunate. They are trapped instead - perhaps by the benefit system, perhaps by their lack of up-to-date qualifications - in the twilight world of low pay, short-term contracts and dole queues.

Were that the only problem, the Conservatives would not be fussed. After all, few of the unemployed are potential Tory voters. However, the Government's employment strategy is not too hot for voters in the middle either. For most of us, the statistical chance of losing a job has not increased all that much. But the costs of becoming unemployed have increased considerably. No matter how skilled you are, and how excellent your qualifications, the chances are you will have to take a substantial salary cut in your new job if you lose your old one. If you are unlucky, particularly if you are over 50, you may find the demand for your brand of skills and experience has dried up. Stay on the dole for six months and you might qualify for a training scheme. But in the meantime you will not get much help with your mortgage, or other benefits, unless you were able to take out insurance.

Policymakers have to realise that people need support to be flexible, and to cope with the rapid change around them. That may mean the chance to get new qualifications, or help finding work, or even a subsidy to get them back into employment at all. And - particularly for those swing voters who feel their prosperity is just a bit too precarious - it means offering enough cushions that they will not live in debilitating fear of losing everything should they fall.

None of these measures are incompatible with the kinds of things Mr Waldegrave said yesterday. Indeed, his speech confirmed that we now have a broad political agreement over the need for a free market in labour, backed with individual protection and aid. The argument is over where we find the point of balance. Security for the workforce of the future will come not from job protection or deregulation, but through creating genuinely flexible workers instead.