The fact that there are currently over nine million adults in the UK economically inactive, including over 3m people on long-term disability benefits and nearly 1m people aged 16-24 not in employment, education or training, is a national scandal. Thinkers like Fraser Nelson have done an impeccable job at highlighting the explosion in inactivity since the Covid pandemic, and it’s a testament to the Government that they’ve picked up the tricky mantle of welfare reform as a necessary plank of its ambitions to ‘Get Britain Working’ again.
During a recent Jobs Foundation breakfast, one business leader compared getting Britain back to work to the Dunkirk evacuation: urging businesses to provide ‘vessels’ (jobs), ‘maps’ (peer support) and ‘motors’ (mentors) to help get people back into employment. This is an apt comparison. Getting Britain back to work should be our number one national mission, with buy-in from government, opposition parties and businesses to make this a success.
As Keir Starmer and Rachel Reeves have been at pains to emphasise, it’s not just for fiscal reasons that this growing problem must be tackled. A job gives people a sense of purpose in life, a way of learning new skills and an opportunity to meet new people and better themselves. Getting more people into work won’t just help balance the Government’s books, it will help give millions of people a better and happier life.
The policies announced by Liz Kendall in her statement today are a welcome start. Nearly 2m people currently say that they want a job but are not currently working, with the current welfare system being riddled with incentives that too often prevent people that want to work from entering employment. ‘Right to try’, in particular, will be a gamechanger to give more people the confidence to try working, and the vast majority of people who start a job will go on to thrive in employment.
The Conservatives, too, need to buy into the agenda of reform, and the goal of getting 2m more people into work deserves resounding cross-party backing. Labour have been brave to touch areas of policymaking that the Conservatives trod carefully around during their time in office, and Conservative politicians must avoid the temptation to simply criticise from the sidelines, with the recognition that employment and welfare trends were headed in the wrong direction for too long.
But the simple fact is that welfare alone is only one piece of the puzzle. There are currently only 800,000 job vacancies in the UK, and the Government aims to get 2m more people into employment, meaning that there is the need for businesses to generate 1.2m new jobs. Job growth is flatlining at best and falling at worst, with figures continually highlighting that more and more companies intend to either reduce headcount or pause hiring.
While calling for businesses to provide the ‘vessels’ to get people into employment, the same business leader stated that with the Employment Rights Bill and the increase in employer NICs, it seems like the Government has smashed businesses’ rudders and blown up their motors. It seems contradictory for the Government to be reforming welfare to get more people into work, while simultaneously making it harder for businesses to create the jobs that these people will fill.
Businesses must recognise their role in this mission too. Yes, businesses already do so much to create opportunity for people through good employment and training schemes. In return for a regulatory and tax environment that allows businesses to thrive, companies should be encouraged to go the extra mile on training and recruitment – taking a risk on hiring that extra school leaver, or giving the additional resource required to take someone from long-term unemployment into work. After all, businesses and the jobs they provide are the most important mechanism for alleviating poverty.
The Government’s announcements today are a good first step. But to get Britain working again, we need to make this a national mission: individuals buying into the value of work; government giving businesses the policy environment that allows them to create more jobs; and businesses being willing to take the risk of hiring more workers.
‘Two Million Jobs: How businesses play a crucial role in taking people from welfare into work’, is published by the Jobs Foundation. You can read it here.
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