Our President’s piece on ‘Getting Britain Working’

Read below for our President, Matthew Elliott’s piece in the Telegraph discussing Labour’s ambition to get more people into employment. This was originally posted online on 18 February 2025, 8:24am GMT and can be viewed here.

—

When the Government launched their Get Britain Working White Paper before Christmas, Keir Starmer wrote that “getting Britain back to work is at the heart of my mission to grow the economy.” The Prime Minister is right. We won’t see a return to economic growth without people returning to work, which is why today’s employment figures are so concerning.

According to the Office for National Statistics, in January, the number of payrolled employees rose by just 49,000 compared to last year, following a fall of 32,000 last month. For a government that rightly wants to boost the employment rate to 80 per cent by bringing two million more people into the workforce, things are clearly not heading in the right direction. If we continue at this rate, this will take over forty years to achieve.

The Government’s ambitions to Get Britain Working should be celebrated. Rising economic inactivity has been all too apparent since the pandemic. The Conservatives presided over a significant increase in the number of people falling out of the workforce, and spending on incapacity and disability benefits is now almost 40 per cent higher in real terms than in 2013. 

The Work and Pensions Secretary, Liz Kendall, clearly grasps the scale of this challenge. As we await the publication of her welfare green paper, Kendall has promised to fix the benefits system to get people back into work, stating that “there are people who shouldn’t be on benefits who are taking the mickey.” Even Labour grandees are getting in on the act, with Sir Tony Blair last month acknowledging that we “really cannot afford to be spending the amount of money we’re spending” on the spiralling welfare bill.

The simple fact is that we rely on businesses to create jobs to take people from welfare to work. As evidenced by the ONS today, Labour’s hike to Employer National Insurance Contributions and the looming Employment Rights Bill are having the predictable effect of businesses actually cutting jobs.

This should not come as a surprise – the Government clearly understands how taxation can change behaviour. In Rachel Reeves’ Budget last October, she announced an increase in the soft drinks levy, presumably to dissuade people from buying sugary drinks. She announced a hike in alcohol duties to discourage drinking, and a rise in tobacco duty to “maintain the incentive to give up smoking”. These tax rises are premised on the correct assumption that increasing taxation reduces demand. 

The same is true when it comes to employment. If it’s more expensive for companies to hire people because of increased Employer NICs, there will be reduced supply of jobs.

Similarly, the Government seems intent on pushing through their Employment Rights Bill, almost universally lambasted by businesses. Research from the Federation of Small Business has found that 92 per cent of small business owners are worried about the Bill, and 67 per cent plan to recruit fewer staff as a result. 

And some MPs want the Bill to go even further, with reports last week that an amendment might be tabled to transition the economy to a four-day working week, with no reduction in pay. If accepted, this measure would further increase costs for businesses and again mean that they are less able to create good jobs.

Getting Britain back to work should be a national mission. At the Jobs Foundation, we’ve been travelling the country speaking with businesses of all shapes and sizes, and we’ve heard from so many business leaders who are passionate about creating employment for those that most need it. But they need to be supported to do so.

The Government clearly understand the importance of the business community to their economic goals – Keir Starmer and Rachel Reeves have made much fanfare about their engagement with business leaders. But they must turn this engagement into a policy environment that allows businesses to create the jobs that will Get Britain Working. 

The Government should support Liz Kendall in making the ambitious changes to the welfare system to incentivise work. They must be pragmatic about the Employment Rights Bill, listening to the valid concerns of businesses and recognising that the vast majority are good employers. And they must use the Spring Statement to announce some bold measures to encourage economic growth.

Adopting this approach would go a long way to boosting business confidence and making sure that the worrying employment trends identified by the ONS today are only a blip in the road to “Getting Britain Working”.