Labour will struggle with its plan to get Britain back to work

Liz Kendall wants Britain to get back to work. The Work and Pensions Secretary has unveiled a target for the country to reach an 80 per cent employment rate. But hold on: that ‘ambition’, as the government is calling it, is completely unrealistic. Labour’s plan to reverse the dire labour market and drive up Britain’s employment rate seems certain to fall short of its ambitious target.

Britain is the only country in the G7 whose employment rate has still not returned to pre-pandemic levels: 2.8 million people are out of work because of ill health or disability; one in eight young people are not in education, employment or work. Spending on sickness and disability benefits is set to increase by £30 billion over the next five years, according to the Office for Budget Responsibility.

Something needs to change; that much is clear. But getting 80 per cent of Brits into work seems impossible. The UK has never come close to that rate over the last 50 years. The UK’s employment rate has fluctuated significantly over the decades. Back in 1971, it was 71 per cent; it went down to 63 per cent in 1983; and then, apart from a dip in the recession of the early 1990s, it climbed steadily to reach an all-time high just before the pandemic of 76 per cent. But it has never got closer than that to Labour’s pie-in-the-sky 80 per cent figure.

In reality, all the Labour government is doing is setting itself up to fail. It is very hard to understand how the UK is going to find an extra four per cent of people to shift into employment. It would probably have to adopt some radical measures, not least considering closing some universities, and forcing a few retirees back into the office.

What Labour appear to have failed to realise fully is that the country’s real problem is not generating jobs. The UK has generally been pretty good at doing just that. The trouble is that the jobs we do create are not especially productive, and are not very well paid. The new government keeps announcing targets as if all that was needed was for a minister to make a statement and it will suddenly happen. In a way, it is admirable that Keir Starmer’s administration is setting out the standards by which it will later be judged. But, come election time, it’s a decision it is likely to regret.