In a bid to combat economic inactivity and boost employment, Britain’s new Employment Minister, Alison McGovern, announced plans to revive active job market policies from previous Labour governments. McGovern, who took office in July following Prime Minister Keir Starmer’s Labour Party victory, emphasized the need to improve Britain’s position in global labour market rankings.
Restoring Active Employment Policies
McGovern is advocating for the return of active employment strategies, which involve job placement and training programs funded by public money. She pointed to successful past initiatives like Tony Blair’s 1998 “New Deal” and the Future Jobs Fund, introduced after the 2008 financial crisis, as models for the new Labour government’s approach.
The move comes in response to concerning data from the Organisation for Economic Co-operation and Development (OECD), which revealed that by the end of last year, Britain was the only Group of Seven (G7) advanced economy to have lower employment and higher inactivity rates compared to pre-pandemic levels.
Legislative Proposals to Address Inactivity
The Department for Work and Pensions is expected to publish a paper in the coming months outlining legislative proposals to bring these policies back into action. McGovern stressed the importance of tailoring solutions to the current economic climate while learning from the past.
“We need to design the right response for the time and the situation that we’re in, but know our own history and understand what we’ve done before and how and why it worked,” she said.
Expanding the Role of Job Centres
A key component of the strategy involves expanding the role of job centres. McGovern highlighted the need for a more proactive public employment service, which she believes has become too focused on processing benefits rather than actively helping individuals find suitable jobs.
“Our public employment service has been shrunk. It’s become about benefits processing rather than active support to get the right person in for the right job,” McGovern explained.
The plan includes empowering frontline staff and improving coordination with other local services, ensuring a more effective and targeted approach to helping individuals re-enter the workforce.
Invest-to-Save Policies
Think tanks such as IPPR North and the Fabian Society have suggested “invest-to-save” strategies, where targeted government support helps individuals find work, ultimately reducing the cost of benefits and boosting long-term economic growth. McGovern agreed that this could be part of the solution, noting that Britain once led the world in such active labour market policies.
Conclusion
As Britain grapples with the long-term effects of the COVID-19 pandemic on the job market, McGovern’s plans aim to restore the country’s standing and reduce economic inactivity. By drawing on successful policies from the past and adapting them to current needs, the Labour government hopes to stimulate employment and improve the overall economy.
