CICERO FOUNDATION SEMINAR UK labour market policies - a recipe for success? Georgina Hill British Embassy, Paris.

CICERO FOUNDATION SEMINAR

UK labour market policies- a recipe for success?

Georgina HillBritish Embassy, Paris

This presentation will cover...

• The UK labour market today

• How have we got there?

• What next?

THE UK TODAY

The UK has one of the strongest labour markets in the world...

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Canada UK US Japan Germany France Italy

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Source: OECD Employment Outlook 2007

…with high employment across most groups

Source: OECD Employment Outlook 2007

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Total Men Women Young PrimeAge

Older Lowskilled

Mediumskilled

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UK OECD

…while Unemployment and Inactivity Rates are relatively low

Source: OECD Employment Outlook 2007

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At low cost: expenditure on labour market programmes as a % of GDP

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SwedenFrance

Ireland

Norway

Portugal

Austria

Hungary

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Australia UK

Korea US

Source: OECD

HOW HAVE WE GOT THERE?

RESTATED OECD JOBS STRATEGY

• No single golden road to better labour market performance

• But some common success factors, eg:– macroeconomic stability– incentives– competition

Key elements that have contributed to the success so far…

• Macroeconomic Stability

• Flexibility and Diversity

• Making work pay:– National Minimum Wage and tax credits improve incentives

to work for low income households

• Active Labour Market Policies:

– Jobcentre Plus– Rights & Responsibilities agenda– assisted job search– New Deals: employment programmes to reduce long term

unemployment through intensive tailored support/activities

TURNOVER IN THE UK LABOUR MARKET

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1.65 m

2.01 m

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IU

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E = EMPLOYMENT U =UNEMPLOYMENT I = INACTIVITY

Source: UK LFS, Longitudinal Dataset ( 2 Quarter )

USUAL HOURS WORKED PER WEEK

FRANCE

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Hours usually worked

GERMANY

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Hours usually worked

ITALY

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Hours usually worked

UNITED KINGDOM

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Hours usually worked

Source: Eurostat

Temporary employment

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US UK Italy France Canada Germany Japan

Source: OECD Online Statistical Database

ACTIVE LABOUR MARKET POLICIES

• Make work pay

• One stop shop: Jobcentre Plus

– links Rights & Responsibilities

– benefit payment & assisted job search– Jobseeker’s Agreement = back to work plan

• Regular contact:

– fortnightly signing to check on progress

– regular reviews (13 weeks)

– personal advisers

– close follow-up

• Greater help & employability measures as duration increases, eg New Deal

Jobcentre Plus

• Payment of Working Age benefits• Job Services to customers and employers• Recruitment services for employers• Extra help for ‘priority’ customers, including New Deal

programmes• Benefit fraud prevention and investigation

Jobcentre Plus Purpose: “Work for those who can, support for those who

cannot”

WHAT NEXT?

Current Considerations

• Balance between rights & responsibilities

• Boost employment to 80% and tackle long-

term unemployment

• Greater use of private & voluntary sector

• Greater devolution

• Link between employment & skills

The key problem is now economic inactivity not unemployment…

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Economic InactivityILO Unemployment

…and because the vast majority of claimants of inactive benefits are economically inactive, most are not looking for work…

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…And other countries face similar problems…

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Other benefitsUnemployment benefitsSickness & DisabilityOld age & early retirement

What are we doing about it…?

The UK Government’s long-term aim is to achieve an employment rate of 80% of the working age population:

• 1 million fewer people on incapacity benefits• 1 million more older people in work• 300,000 more lone parents in work

• tackling inactivity and worklessness, particularly in the most geographically deprived areas

We have begun to make a difference amongst lone parents and those on Incapacity Benefit…

1) Reform Incapacity Benefit, for sick and disabled: - ‘Pathways to Work’

- including mandatory Work Focused Interviews

• Increase incentives for Lone Parents to (re-)enter labour market:

- New Deals extended to lone parents- Tax Credits- transitional top-up payments to ensure work pays

• Extending working lives:

- age discrimination legislation - increase in State Pension Age - Age Positive campaign

Conclusions: So far so good….but there is more to do!

• Next stage of Welfare Reform- changes in the benefit structure

• Support for disadvantaged groups:– certain areas, especially major cities– some minority ethnic groups– people with low or no qualifications

• Skills– transition from school to work– lifelong training

Any questions…or answers?

Department for Work & Pensions:www.dwp.gov.uk

Jobcentre Plus:www.jobcentreplus.gov.uk

New Deal employment programmes:www.newdeal.gov.uk

Learning & Skills Council:www.lsc.gov.uk