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More than one in five UK jobs require no more than primary education, according to a new report from the Chartered Institute of Personnel and Development (CIPD).

The report, Industrial Strategy and the Future of UK Skills Policy, produced for the CIPD by the Centre on Skills, Knowledge and Organisational Performance (SKOPE), suggests that contradictory government policies and priorities have encouraged businesses down the low road of competition based on low cost, while also exhorting them to invest in innovation, efficiency and skills.

It says the low cost approach has left Britain with the highest proportion of low skilled jobs in the OECD after Spain. 22% of UK jobs require no more than primary education, compared with less than 5% in countries like Germany and Sweden. It means that in-work poverty has increased by 20% in the last decade, creating a huge benefits bill.

The report also finds that the UK has the second highest level of what the OECD calls “over-qualification” – with 30% of workers saying that they are over-qualified for their jobs and far more graduates than there are graduate-level jobs. The report concludes that these two skills problems – low skilled jobs and the under-utilisation of workers with higher skills – are major factors in the UK’s poor productivity levels.

Peter Cheese, CIPD chief executive, is calling for a new Workplace Commission to tackle the problem. He said: “We’ve been down the road of simply increasing the supply of skills without increasing UK productivity or the number of skilled jobs in the economy. We now need to stimulate demand for higher level skills through increasing the number of higher skilled roles available.”

He added: “Unless we address the demand side of the skills equation, we will fail to improve our poor productivity or to achieve the sustainable increases in real wages. The most glaring absence at the heart of government policy is coherent, integrated thinking and strategy that focuses on understanding and growing demand for skills, embracing growth, innovation, employment relations and the labour market. A Workplace Commission could fill this hole.”