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“Active Labour Market Policies in the UK – What lessons can be learned from the British Experience?” Helen Bache UK Department for Work and Pensions CICERO FOUNDATION PARIS, 23 FEBRUARY 2006
Comparing the UK with the EU: Source: Employment in Europe 2005, Eurostat
Wider International Comparison Source: OECD
Success in the labour market is built on solid foundations • Macroeconomic Stability • Flexibility and diversity • Making work pay • Active Labour Market Policies • Jobcentre Plus • New Deals
Macroeconomic stability • Macroeconomic stability is the platform from which countries can achieve high levels of employment. • The new macroeconomic framework introduced since 1997 has delivered stability and growth in the UK – creating the right kind of environment for employment to flourish. • A stable economy is necessary for high levels of employment, but not sufficient.
Flexibility and diversity 29% work 40 hours 11 % work 40 hours 39% work 40 hours 11% work 39 hours
Making work pay • Work incentives are important to make it worthwhile for individuals to participate in the labour market, particularly for those on low incomes. • The Government strategy to make work pay is designed to tackle the unemployment trap and the poverty trap. • Reforms to income tax and National Insurance Contributions and the introduction of the National Minimum Wage and tax credits improve incentives to work for low income households.
Active Labour Market Policies • Jobseeker’s Allowance • Rights & Responsibility agenda • Assisted job search • Increased help as duration increases • New Deal • Ends long term unemployment • Gateway to training/retraining • No other option
Modern Jobcentre Plus services Self-service and face to face advice brought together
RESULTS • Around 60% of unemployment benefit claimants leave the register within 3 months • Around 80% leave within 6 months • Around 90% leave within 9 months • Around 95% leave within a year
Key success factors • Jobcentre Plus – single point of delivery for benefits and help into work • Compulsory work focussed interviews and specially trained advisers • Something for something – rights and responsibilities
Future challenges • Our 5 year strategy, published earlier this year, set out our long-term aspiration to increase our employment rate to 80%. • If we are to meet our aspiration of an 80% employment rate, we would need to increase the number of people in employment by around 2.5 million. • 5 year strategy and Green Paper are available on our website at www.dwp.gov.uk