By Andy Bruce
(Multibagger) - In an exclusive interview with Multibagger, new employment minister Alison McGovern announced plans to revive active job market policies in Britain. These policies, reminiscent of past Labour governments, aim to increase employment and reduce inactivity, addressing a key concern for the economy.
McGovern, who assumed office after the recent election victory of Prime Minister Keir Starmer's Labour Party, emphasized the need to enhance Britain's position in the global labor market rankings. According to OECD data, at the end of last year, Britain was the only G7 advanced economy with a lower employment rate and higher inactivity rate than pre-pandemic levels in late 2019.
Labour's ambitious goal is to raise Britain's employment rate to 80% from the current under 75%, a feat never achieved in recorded history dating back to the 1970s. McGovern cited the importance of active employment policies, such as job placement and training services funded by public resources, in achieving this objective.
The Department for Work and Pensions is set to unveil a paper outlining legislative proposals in the coming months. McGovern pointed to successful past Labour initiatives like Tony Blair's "New Deal" program and the Future Jobs Fund post the 2008 financial crisis as models for the future.
While the previous Conservative-led government saw record-high employment rates, the challenges posed by the COVID-19 pandemic and subsequent health service failures led to a rise in inactivity due to ill health, hindering the job market recovery.
McGovern stressed the importance of learning from past policies and designing tailored responses to current circumstances. Expanding the role of job centers, empowering frontline staff, and improving coordination with local services are key aspects of the government's labor market agenda.
Think tanks like IPPR North and the Fabian Society have suggested "invest-to-save" strategies, where targeted support funded by public resources helps individuals find employment and ultimately reduces the benefits expenditure. McGovern expressed support for such approaches, emphasizing the need to reclaim Britain's leadership in active labor market policies.
Analysis:
Alison McGovern's announcement to revive active job market policies in Britain signals a shift towards boosting employment and reducing inactivity. By drawing on successful past initiatives and emphasizing tailored responses to current challenges, the government aims to raise the employment rate to unprecedented levels. This move could have significant implications for individuals seeking work, as well as the overall economic recovery and stability in the country.