Labour’s White Paper – just a damp squib?

This week has seen the publication of a Labour White Paper Getting Britain Working, though as Shadow spokesperson and in the run up to the election, Liz Kendall had already set out her intentions to challenge ‘worklessness’.

Though the UK has relatively low rates of unemployment, at least in historical terms, it has lower rates of labour market participation than elsewhere – around 75% of 16–64-year-olds compared to the 80% rates in some other European countries. Thus, Labour thinks that by increasing the labour force by 2 million, it can ‘unlock’ growth and create a more ‘dynamic’ economy.

Like their Tory predecessors, Labour front benchers have become fixated with the number of people ‘economically inactive’ – those not in work, but not actively seeking it. Rates of economic inactivity have increased since the pandemic and now stand at well over 9 million, partly reflecting what commentators have termed a ‘great resignation’ where the experience of the ‘furlough’ resulted in thousands of people, particularly those in late middle age, re-evaluating, but then withdrawing from future labour market participation. But during and after the pandemic, long term illness rates continued to increase.  Around 2.4 million people are now in receipt of sickness benefits, with some estimates suggesting that this could reach 4 million by 2030 – pushing up the welfare bills that, like the Tories, Labour wants to cut.

Labour comes after the NEETs.

It’s the NEETs – young people ‘not in education, employment or training’ that is the key group Kendall and Labour are really targeting. The number of NEETs in the 18-24 age group has risen from 12.9% to 15.6% during the last two years. While older workers are more likely to suffer from physical ailments, almost 1 in 4 NEETs (193,000) report a mental health condition (up from 1 in 10 in 2012) and there’s been large increases in young adults receiving health-related disability benefits. But the increase in NEETs in the last two years has also been driven by growing unemployment, particularly amongst young men. In other words, more young people are looking for work but not able to find it – approaching 40% of NEETs are recorded as unemployed, just over 12% of all 18–24-year-olds.

A Youth Guarantee for all?

Reducing the number of NEETs by a third would, it’s argued, add 1.8% to GDP – equivalent to £38 billion.  So, Labour has announced a Youth Guarantee. But rather than offering any specific assurances to young people, at best, this is a statement of intent, bringing together a range of initiatives the government has already announced, (“this Guarantee is based, in the first instance, on existing provision and entitlements”) to make sure young people are either ‘earning or learning’. 

In addition to improving access to mental health services for young people, part of Labour’s plans to ‘fix the NHS’ there’ll be increased access to apprenticeships by reforming the employer levy, improved educational opportunities (free English and maths) for the 40% of NEETs with qualifications below level 2, a review of the school curriculum, better work experience, upgrades of the careers service and the modernisation of job centres (yet again). Major regional inequalities are highlighted – only 2.4% of young people in Oxford are claiming universal credit compared to 26.8% in Blackpool, so Labour wants to establish ‘trailblazer’ initiatives in depressed areas under the guidance of local mayors. The list goes on.

Parts of Generation Z already becoming detached.

Yet if young people face particular individual difficulties, many of these are symptomatic of a much broader crisis in their relationship with employment, something either ignored, or at best, not understood by policy makers. The collapse of tradition avenues of transition from school to work, for example, means many are now forced into making far more difficult transitions, likely to generate feelings of helplessness and isolation, but also deeper conditions of anxiety and depression. 

There is a real danger also, that sections of the current generation of young people are becoming increasingly detached from society, rejecting any formal attachment to the labour market, deciding to live ‘off-grid’, relying on ‘cash in hand’ employment opportunities, or resorting to selling and buying ‘online’.  Both Starmer and Kendal have said that anyone who turns down opportunities will be threatened with loss of benefits; though to the disappointment of the media and the Tories, the White Paper doesn’t elaborate on this, let along explain how this might happen. This will be for a later day.

Yet without a wider commitment to large increases in public spending (the extra £300 million to FE for example, though more than needed, is not going to “equip young people with the skills needed to make a successful transition to the labour market”!) without a serious alternative for the economy and a definitive plan for creating well paid secure work, it’s debatable whether there’ll be real opportunities in the first place. The White Paper will be no more than a damp squib