The full employment strategy must go beyond tax cuts and squeezing those on benefits

To maximise people’s chances of finding work we need to tackle the structural problems they face.

Amna Silim is a research fellow at IPPR

Yesterday, the chancellor announced a new commitment to full employment. He is going target an employment rate in the UK that is higher than in any of the other G7 countries. This is potentially good news.

Full employment as a policy can create more inclusive labour markets by bringing in disadvantaged groups and it can help tackle the north/south divide.

For families, employment is one of the biggest determinants of personal wellbeing and can lift household earnings and improve living standards. For the government, full employment can broaden the tax base, helping to better manage public finances and lower benefit spending.

Since the recession the chancellor’s priority has been the resumption of GDP growth and controlling the budget deficit. Even though national statistics show the recovery has begun to take hold, many families, especially outside of London, are yet to feel a difference.

But the politics are changing. This announcement shows that the chancellor recognises that it won’t be enough just to make the economy boom, but equally important is that the UK’s economic growth will also need to be inclusive.

It might be one thing to target full employment, but can the chancellor deliver it? To achieve full employment the government will need to reduce barriers to work for particular groups.

Women, particularly mothers and older women, will need to be helped into work in greater numbers. Maternal employment rates were well below employment rates for women with no dependent children, reflecting the pressures many mothers face in balancing home and care responsibilities. Affordable childcare is key to help women to (re)enter work after having children.

Employment rates (%) of women and of mothers with at least one child under the age of 6

Graph 1j

Unemployment for young people topped a million last year and youth unemployment remains an important structural economic issue to target. The lower employment rate for young people, many of whom are still struggling to find work, is partly explained by the difficult transition from education to work.

Employment rates of young people (15-24 years)

Graph 2j

For older workers, a genuine offer of flexible work and more flexible leave entitlements to accommodate health or care related issues will be central to their employment outcomes.

Employment rates for different age categories

Graph 3j

Other groups that need help are those with few or no skills, people with work-limiting disabilities and victims of rapid technological change.

In a new IPPR report, published today, we show that the UK lags behind many other European countries. Scandinavian countries manage to maintain high employment rates across most groups, better integrating most of its population into the workforce than the UK.

To maximise people’s chances of finding work we need to tackle the structural problems they face.

For mothers, young people, older people, those with few or no skills and people with work-limiting disabilities, those barriers differ. Therefore to achieve this goal it is vital that the full employment strategy goes beyond simply cutting taxes for business and squeezing those on out of work benefits.

Tactically, the chancellor’s political goal this week was to attack Labour’s planned jobs guarantees for the long-term unemployed. Ideologically, it was more ambitious: to redefine the traditional territory of the left.

We should see this as an opportunity. Osborne has opened up space which people on the centre-left should welcome. Into this space we should argue for active policies that help people overcome the barriers to work that they face.

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