UK government sets up board to tackle labour market inactivity

Published Tue, Sep 10, 2024 · 07:28 AM

The “Get Britain Working” plan, aimed at getting more people back to work, is part of government plans to reach 80 per cent employment rate and speed up economic growth. PHOTO: REUTERS

BRITAIN’S Labour Party on Tuesday launched a new advisory board that will help address long-standing issues in the country’s labour market, including reducing high levels of inactivity among working-age people.

The “Get Britain Working” plan, aimed at getting more people back to work, is part of government plans to reach 80 per cent employment rate and speed up economic growth.

Paul Gregg, chair of the Labour Market Advisory board, said Britain’s jobs market faced deep-seated challenges.

“We have seen a sharp increase in economic inactivity and long-term sickness, most notably in our young people post-pandemic,” Gregg said.

“Further, real wage growth has been heavily suppressed for 15 years hitting living standards and government tax revenues. Reversing these trends will be key to ensuring the long-term prosperity of the UK’s labour market.”

Britain’s economy has been slower to recover from the hit of the Covid-19 pandemic than many other big, rich countries.

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The vast majority of economists polled by Reuters think the Bank of England will wait until November to reduce interest rates again, although financial markets currently show a one-in-four chance of a rate cut on Sept 19.

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New British Prime Minister Keir Starmer said he wanted the economy to achieve annual growth of 2.5 per cent when campaigning in the run-up to July 4’s election - a rate that Britain has not regularly reached since before the 2008 financial crisis.

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An aerial view of the outfall into the River Thames, at Thames Water's Crossness Sewage Treatment Works, in London, Britain, July 3, 2023. The Labour government said it had now introduced proposed legislation into parliament promising to give tougher powers to regulators and come down hard against companies damaging the environment.

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The S&P Global UK Services Purchasing Managers Index rose in August to 53.7 from 52.5 in July, above a preliminary estimate of 53.3.

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Central London employees only go to the office for 2.7 days per week on average, with attendance higher among 18 to 24-year-olds than their older colleagues.

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Official figures showed 9.4 million working-age Britons were not in employment or looking for work and 2.8 million were not working because of long-term sickness as of mid-2024, something the government says also reflects long waiting times in the country’s increasingly stretched national health service.

Labour market data later on Tuesday is expected to show strong employment growth and a cooling in wage growth in July.

The Labour Party, which has been in power since July, said it will overhaul job centres and devolve powers to local areas as part of its reform plan this autumn. REUTERS

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