British Government to Reinstate Active Job Support Plans, Minister Announces

By Andy Bruce

Britain plans to reintroduce active job market policies reminiscent of previous Labour administrations to enhance employment rates and tackle the ongoing issue of inactivity, which poses a challenge for the economy, new employment minister Alison McGovern announced on Wednesday.

Since taking office in July following the significant electoral victory of Prime Minister Keir Starmer’s Labour Party, McGovern expressed the desire to improve the UK’s standing in global labour market rankings in an interview.

According to OECD data, by the end of last year, the UK was the only G7 country to report both a lower employment rate and a higher inactivity rate than before the pandemic in late 2019.

Labour aims to increase the employment rate in Britain from just below 75% to 80%—a target that has not been achieved in official records since the 1970s, though smaller economies such as the Netherlands, Switzerland, and New Zealand have reached similar levels.

McGovern emphasized that reinstating active employment policies—encompassing publicly funded job placement and training services—would be vital for reaching this goal.

The Department for Work and Pensions is expected to release a document detailing legislative proposals in the upcoming months.

McGovern highlighted successful historical Labour initiatives, including Tony Blair’s "New Deal" program from 1998 and the Future Jobs Fund initiated after the 2008 financial crisis, as effective examples to draw from.

Although the Conservative-led government that took office in 2010 achieved record-high employment rates, failures in the health service following the COVID-19 pandemic have led to a significant rise in inactivity due to health issues, hindering the recovery of jobs.

“We need to design the right response for the current situation while learning from our history and understanding what has worked in the past,” McGovern stated.

An expansion of job centres will be a cornerstone of the government’s labour market strategy, according to McGovern, who added that enhancing the capacity of frontline staff and improving collaboration with local services would also play a role.

“Our public employment service has diminished, focusing more on processing benefits instead of actively supporting individuals in finding the right job,” she noted.

Several think tanks, including IPPR North and the Fabian Society, have proposed “invest-to-save” strategies, where targeted public funding aids people in finding work, potentially offsetting expenses by reducing the benefits burden.

When asked if such approaches could be part of the solution, McGovern replied, “Yes. Historically, we led the world in active labour market policy, and we have fallen behind.”