Geoffrey Robinson – 1998 Speech on Tackling Skills Shortages

The speech made by Geoffrey Robinson, the then Paymaster General, at the Joint Hospitality Industry Congress conference on 1 July 1998.

Introduction

Thank you for inviting me to speak at this conference.

I’m here today to welcome the role this industry can play in the Government’s economic strategy – a strategy to deliver economic and employment opportunities for all.

Economic growth brings a general increase in personal disposable income.  And, as people earn more, they demand more and better opportunities to spend their leisure well.  So stable economic growth brings particular opportunities to the hospitality industry and those who work in it.

The hospitality industry has the potential to generate a high proportion of the jobs we need if we are to succeed in our ambitions for Britain.  The wide range of employers represented here today shows the breadth of the opportunities available – in hotels,  restaurants, tourism and leisure – small firms and large employers – in all corners of the UK.

That means you need a wider range of skills than exists in any other industry –  catering, cleaning, managing, marketing and – customers.  Your industry that thrives – or  fails – through the level of customer service which it offers.  So it needs more people as it grows, not fewer.

And yet – despite the range of jobs that your industry has to offer – you face skills  shortages on a massive scale.   You employ over 2 million people and need to recruit  around 300,000 people each year.  And yet only 6 per cent of those vacancies can be  filled by suitably qualified college leavers.

So we see evidence of skill shortages and upward pressure on wages – at a time when youth and long-term unemployment still remains unacceptably high.  That’s a symptom of structural problems in the labour market – a structural problem we need to work together to address.

A new partnership

As Chris Smith will outline later this morning, we need a new partnership between  the Government and the hospitality industry.

Gone are the days when the solution would have involved either exclusively private or public sectors.

Today, we must work together.  Only by doing so can we really understand the nature of the challenges facing us and put together solutions that tackle them.

There are already many ways in which we are already working with you.  I have no doubt Chris Smith will say more at lunchtime about the strategy he is developing with the Tourism Forum.  I know he has been very encouraged and impressed by the industry’s  willingness to work with the Government on the strategy, and the time, energy and commitment Forum members are bringing to the work.

The New Deal is perhaps the best known partnership between public and private  sectors and is a classic example of how the objectives of both Government and industry go hand in hand.  How the industry can solve its recruitment problems while Government can meet its objective of moving people from welfare into work.

What the Government has done

Funded by the Windfall Tax, the Government has set up the New Deal programme to help the young and long-term unemployed, lone parents and the disabled.  Almost £4 billion have been put in to this programme, along with firm support from the Chancellor and Prime Minister.

Earlier this week, the New Deal was extended to the long-term unemployed over 25.   We will provide a new employment subsidy – £75 a week – to support employers who recruit someone who has been out of work for over 2 years.  That’s another element of our strategy in place.

But whether we’re talking about:

• the young person who needs work and  training to make a proper start to
  their working life;
• a new start for an older worker – whose  risks being left on the scrapheap after
  a lifetime of skilled employment;
• a new employment opportunity for a lone  parent who’s child has started school;
• or a better deal for disabled people,one thing is clear.  We can only succeed if we work with the grain of business.

The New Deal needs to be the smart solution for your business.

What industry can do

And I firmly believe that the New Deal is a smart solution.  It can provide high  quality, skilled employees.  The resources are in place – and the programme has made an encouraging start.  It is now down to business to fulfill its role in the partnership and make sure it happens.

Over 15,000 employers that are signed up to the New Deal.   And I’m pleased to say the hospitality industry is leading the way on the New Deal – many leading names in the industry have signed up.  And, round the country, small and medium sized  firms in  this industry are signing up as well.

New Deal Training Centres

But New Deal is not just another employment initiative, like the many we have seen in the past.  The difference is that it’s tailored to the needs of the individual, and to the needs of business.

I welcome the innovative industry-led solutions to the work and training elements  of New Deal.  But this really needs the commitment of industry to make it work. We need your creativity and know-how about the industry to make sure together, we can  deliver.

And, from my own contacts with industry representatives, I know this industry is working to make the most of the New Deal.  The New Deal training centres – started in Kentish Town – will, I hope, grow into a  network of centres in every region of the country.  40,000 people will pass through the New Deal Training Centres – the biggest  single commitment to the New Deal so far.

The scale of this ambition is a tribute to a number of key figures in the industry, whose names I won’t mention, and the staff of the Kentish Town Centre.  And I also pay tribute to the constructive role played by the local authorities in Camden and Westminster – who helped make this particular public-private partnership a reality.

Conclusion

The framework is now set.  The New Deal is in place.  Now it is up to you to get  involved, and get signed up.  It is in your interests to see this project come to fruition – a highly skilled workforce is vital for your success – as well bringing wider social and economic benefits.

I welcome the development of the national network of Training Centres and very much urge you to continue to be fully engaged.

This is a bold commitment.  But one where the rewards are great.  So it is in all our  interests to see it succeed.