A Working Solution : Diagnosing The UK's Productivity Problem
Nov 26, 2024
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Ailbhe Rea, Bloomberg's associate editor, dives into Labour's 'Get Britain Working' white paper aimed at tackling economic inactivity in the UK. She discusses the challenges of reducing the £137 billion benefits bill, the impact of rising employer taxes, and the feasibility of achieving an 80% employment rate. Rea also contrasts the employment strategies of Labour and Conservative parties, reflecting on the political tensions and public impatience as the government faces scrutiny ahead of the holiday season.
The UK government's 'Get Britain Working' initiative aims to increase employment by targeting 2.8 million individuals currently out of the workforce due to long-term sickness.
Concerns among employers regarding tax hikes and job creation may hinder the government's ambitious goal of raising the employment rate to 80%.
Deep dives
Government's Employment Initiative
The government aims to increase the employment rate from around 75% to 80% by introducing the 'Get Britain Working' initiative. This plan includes significant changes to employment support, targeting the 2.8 million individuals currently out of the workforce due to long-term sickness. The government emphasizes the need for new policies that will reduce the £137 billion benefits bill, such as removing welfare payments for those who refuse training or education. However, this approach may face criticism from both within the government and from businesses regarding the feasibility and ethical implications of these policies.
Challenges Facing Businesses and Employees
Employers are expressing frustration over recent tax hikes and the responsibilities placed on them to create jobs in the current economic climate. A survey from the CBI conference indicates companies are concerned about their ability to hire and retain workers, especially given the rising costs associated with the government’s budget measures. With 700,000 more working-age adults being economically inactive since the pandemic, the government’s ambitious employment goals may be at risk if businesses are forced to make cutbacks. This situation creates a paradox where the government seeks to boost employment while also imposing stricter economic conditions on employers.
Philosophical Divide in Employment Policies
The political landscape reveals a philosophical conflict between Labour's approach and that of the Conservatives regarding employment and welfare. Labour appears to be following in the footsteps of the Tories by planning similar welfare cuts, albeit under the guise of 'positive' measures like introducing skills training and health service improvements. This indicates a shift in focus towards enhancing the skills agenda, where local governance is expected to play a critical role in aligning workforce training with job market demands. However, the complexity of balancing cuts while addressing long-term sickness and supporting disabled workers raises questions about the overall effectiveness and fairness of these policies.
Today the government releases its 'Get Britain Working' white paper. It's a strategy Keir Starmer says will help lower the country's £137 billion benefits bill by tackling economic inactivity. But how will Labour's plans go down with business leaders and their own MPs? Bloomberg's associate editor Ailbhe Rea joins us to discuss. Hosted by Lizzy Burden and Caroline Hepker.