It’s not rocket science that more growth requires more workers, so why is our government burying its head in the sand, asks Emma Revell
Britain’s long term prosperity depends on work. Growth can only come through successive businesses and these businesses need workers.
This isn’t a controversial or groundbreaking thing to say and yet some of the political class, especially the current government, seem to be doing everything in their power to ignore this basic fact.
The number of working-age adults out of work, temporarily or seemingly for good, is rising steadily and there is a serious lack of willingness to address the root causes. Labour’s recent attempt to introduce a relatively minor change in benefits nearly triggered a meltdown among campaigners and backbench MPs, so for the moment it feels inconceivable we’ll get the sort of root and branch reform needed to support millions to make the shift from benefits to work.
Businesses are repeatedly banging the drum about how increased costs are making it harder for them to keep going day to day, never mind expand or scale up. Yet we’ve seen increases to National Insurance which are a direct hit to the cost of employing each and every worker. My colleagues at the Centre for Policy Studies calculated that 2025 is the most expensive year ever – so far, at least – to employ a worker on the minimum wage, thanks to changes in last year’s Budget.
Behind all this lurks the Employment Rights Bill – stuffed with union-friendly measures which will only make it harder for businesses to deliver the jobs, and frankly the tax receipts, Britain needs.
Brits must start celebrating work
So what can be done? Most importantly, what do businesses need the politicians to finally hear?
I was able to ask a panel of experts at this week’s Conservative Party Conference in Manchester. Working in partnership with The Jobs Foundation, a charity that champions the role of business as a force for good, we set about trying to find out.
Three key themes emerged on which the panel, including shadow business secretary Andrew Griffith and City AM’s own Alys Denby, agreed: consistency, a better regulatory and tax environment, and culture.
On the first two, unfortunately, what needs to be done is clear to all except those in power. Long-term investment decisions require lower and reliable levels of taxation so businesses have a framework within which they can plan, and regulations need to exist at a level which support and promote growth, not inhibit it. Andrew Griffith hinted that a future Conservative government would seek to reduce the number of regulators. Business consultant Andrew Allum accepted that reducing numbers was a good proxy but that we should be bolder and push for no major new regulations until the economy was in a strong position, when we can better ensure growth won’t be affected.
On culture, I put it to the panel that this is surely the hardest to change – our American cousins have an entirely different approach to celebrating wealth creation, encouraging risk and, perhaps most importantly, not demonising the failures that often come before the great successes. Brits, for all our pros, can be a dour bunch! Again the panel felt there was cause for optimism. Alys rightly pointed out that you can only celebrate wealth if you allow people to keep it and to pass it. The main thing the government must do to support future entrepreneurs, therefore, is to allow the current ones to retain more of the fruits of their labour.
The conversation also touched on worklessness, the welfare trap and what businesses can do to get more people into employment. Matthew Elliott, president of The Jobs Foundation, highlighted their recent report ‘Ladders of Opportunity’ which profiled the top businesses that are creating pathways for disadvantaged people into work – older workers, veterans, young people and those trapped in welfare dependency. By sharing best practice among businesses large and small, and with targeted government interventions, they believe businesses can be supported to not only get those out of work into existing vacancies, but also create another 2m jobs.
And if there was any more encouragement I can give readers that there is a cadre out there fighting for the good businesses can do it is this. A spontaneous round of applause among the packed audience for Andrew Griffith when he said “City AM does, almost alone, do a fantastic job of proselytising London and our capital markets”.
Amen to that.
Emma Revell is external affairs director at the Centre for Policy Studies