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

2. This presentation will cover... The UK labour market today How have we got there? What next?

3. THE UK TODAY

4. The UK has one of the strongest labour markets in the world... Source: OECD Employment Outlook 2007

5. …with high employment across most groups Source: OECD Employment Outlook 2007

6. …while Unemployment and Inactivity Rates are relatively low Source: OECD Employment Outlook 2007

7. At low cost: expenditure on labour market programmes as a % of GDP Source: OECD

8. HOW HAVE WE GOT THERE?

9. RESTATED OECD JOBS STRATEGY No single golden road to better labour market performance But some common success factors, eg: – macroeconomic stability – incentives – competition

10. 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

11. TURNOVER IN THE UK LABOUR MARKET 2.13 m1.29 m 1.65 m 2.01 m 1.13 m E IU 2.01 m 3 million E E = EMPLOYMENT U =UNEMPLOYMENT I = INACTIVITY Source: UK LFS, Longitudinal Dataset ( 2 Quarter )

12. USUAL HOURS WORKED PER WEEK Source: Eurostat

13. Temporary employment Source: OECD Online Statistical Database

14. ACTIVE LABOUR MARKET POLICIES Make work pay One stop shop: Jobcentre Plus –links Rights & Responsibilities –benefit payment & assisted job search –Jobseekers 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

15. 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

16. WHAT NEXT?

17. 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

18. The key problem is now economic inactivity not unemployment…

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

20. …And other countries face similar problems…

21. What are we doing about it…? The UK Governments 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

22. 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

23. 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

24. 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