How will the Liberal Democrats support more people back into work?
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The UK is the only G7 economy with a lower employment rate than before the Covid-19 pandemic and getting people back into sustained and secure work will be one of the defining issues of the new Parliament. In response, the new Labour Government aims to get millions more people back into work and modernise labour market legislation.
Following the General Election in July, the Liberal Democrats are now the third largest party in the House of Commons with 72 Members of Parliament. The Work Foundation hosted a roundtable at their Party Conference in Brighton where participants discussed how the Liberal Democrats could seek to shape labour market reforms as they make their way through Parliament and work at a local level to support more people back into work.
With former Government Ministers such as Sir Vince Cable and Jo Swinson in attendance, alongside current elected politicians and experts from civil society, the discussion focused on how we can de-risk the journey back into work and help more people to stay in work.
How can we de-risk the journey back into work?
Economic inactivity due to long-term ill-health has risen to a record 2.8 million and has increased by around 800,000 since the pandemic, making up approximately 30% of the inactive population. Supporting these people back into work was the key topic of discussion at the roundtable.
There was a widespread consensus on reviewing the punitive side of the benefits system. The strict work search requirements and sanctions regime can often push people away from engaging with Jobcentres and benefiting from the employment support on offer. If people do try out work, they fear losing their benefits if they are unable to continue. Creating an environment where Jobcentres focus on proving employment support as opposed to monitoring compliance and administering benefits will be a critical first step in supporting people back into work.
How can we support more people to stay in work
The discussion then moved to how we can best support people to stay in work and progress in their careers. Previous Work Foundation research has found that workers face several barriers that prevent them from moving on to more secure work. For example, disabled workers and workers with long-term health conditions are often trapped in insecure work because they face barriers to accessing flexible work in ways that would let them stay in or progress onto secure work.
There was agreement on the importance of reforming the sick pay system by eliminating the lower earnings threshold and increasing its generosity. This will enable more workers to take time off sick when needed as opposed to dropping out of the labour market altogether due to ill-health. Work Foundation analysis has found that approximately 3.5% of the UK workforce (1.15 million people) are currently ineligible for statutory sick pay. In addition, improving access to occupational health services was also mentioned as a priority. Too often, employers see occupational health as a one-off intervention as opposed to a service of continuous health support.
The upcoming Employment Rights Bill
This roundtable on the participation crisis was timely given the forthcoming Employment Rights Bill. The Liberal Democrats have an opportunity to probe and shape the new legislation as several points of contention remain. We discussed how legislation around zero-hour contracts could be amended to address the employer-employee power imbalances that these contracts often perpetuate, as well as the importance of improving the labour market enforcement regime to make sure any new legislation is properly enforced.
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