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Job losses threaten businesses as Starmer hopes to get 2 million people back to work

Job losses threaten businesses as Starmer hopes to get 2 million people back to work

 



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Sir Keir Starmer has found himself in a new row with leading company bosses as his government attempts to get around two million young people back into work.

As Work and Pensions Secretary Liz Kendall unveiled her Get Britain Working plan in the House of Commons, the Chamber of Commerce warned that Labour's policies were more likely to lead to job losses.

There was similar criticism from the Confederation of British Industry (CBI), with both organizations pointing to the impact of the Employment Rights Act and increases in national insurance, known as occupational tax.

The government plans to force young people and the long-term sick to start working or lose their benefits in a dramatic move to end unemployment and boost employment in England.

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Work and Pensions Secretary Liz Kendall argued that those who can work should work (House of Commons)

But Matthew Percival, CBI's director of business and technology, said: “Employers have a vital role to play in supporting the Government to achieve its goals. There is no doubt that rising taxes and employment costs will make that more difficult to do.

Shevan Haviland, secretary-general of the British Chambers of Commerce, linked the issue with the Employment Rights Bill discussed by lawmakers at committee stage on the same day.

He said: The budget has already hurt many businesses and if enacted as is, this bill could hinder growth, limit hiring and lead to job losses.

Professor Len Shackleton, editor and researcher at the Institute of Economic Affairs, said: It is questionable whether there will be enough jobs for these people in any case, given the sharp increase in employment costs due to budget and minimum wage increases. On the other hand, new employment rights mean that from day one, employers will face greater risk when hiring people without sound employment records.

The warning follows a bruising start to the government as Prime Minister Rachel Reeves backpedaled on the budget at a CBI conference after drawing criticism from the UK's biggest business organizations and industry heads.

Most damaging was criticism from Salman Amin, head of McVities owner Pladis. He warned: It is becoming increasingly difficult to understand what investments make a difference in economic growth rates.

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Kendall on Tuesday announced new plans to tackle unemployment, including a merger of the Job Center and the UK's National Careers Service (PA Wire).

There was some praise for the Government's plans, but ministers were warned about blind spots for businesses.

Lord Elliott, Chairman of the Jobs Foundation, said: Achieving this goal requires a thriving business community, which requires a policy environment that encourages businesses to invest and create jobs.

Rep. Kendall argued to lawmakers that those who can work should work.

Announcing the plans in the House of Commons, the Work and Pensions Secretary warned that the sickness and disability benefits bill would rise by $26 billion by the end of this parliament.

But under our government, this will change, and new opportunities will arise that are consistent with the responsibility to take charge, she added. Because under this Labor government, if you can work, you should work.

The government's Get Britain Working Again plan, announced on Tuesday, aims to get some of the 2.8 million people out of work, mainly due to long-term illness, back to work.

Long-term illness has been the leading cause of job loss since the pandemic, up from about 2 million in 2019.

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Shadow Work and Pensions Secretary Helen Whately (PA Archives)

The 20 areas with the highest unemployment rates in England will get more NHS staff as part of the plan to help reduce waiting lists.

Additional mental health support will also be put in place to guide people with mental illness into work, and career centers will be replaced by a new National Jobs and Careers Service.

The Secretary of State for Work and Pensions said a radically improved digital offer being piloted in some job centers would help improve service efficiency.

She added that video and phone support for job seekers would provide a jobs center in your pocket.

But as well as criticism from the company, there has also been warning about the impact on vulnerable people, particularly those with mental health problems.

The Resolution Foundation think tank said welfare reform could improve living standards, but warned that it would need to be properly resourced to really make a difference.

For example, it is not yet clear how the government will ensure there are enough employment, training and apprenticeship opportunities to guarantee jobs for young people, said Greg Thwaites, head of research at the think tank.

Claire Atchia McMaster, Director of Income and External Affairs at Turn2us, said: Important questions remain about the role of conditionality and sanctions. Evidence shows that sanctions are ineffective, pushing people further into crisis, affecting their mental health and making it harder to achieve financial stability. At Turn2us, we hear from people who are unable to afford necessities like food because of these punitive policies.

If the government is serious about restoring trust in Social Security, it must lead with fairness and compassion when reforming other areas of the system.

Iain Porter, senior policy adviser at the Joseph Rowntree Foundation, warned: This positive first step risks being undermined by the Government's promise to cut the health and disability benefits budget by £3 billion, simply by removing support for disabled people. Prioritizing arbitrary cost cutting over effective reform casts a cloud of uncertainty over low-income disabled people who rely on health and disability benefits.

Christine Jardine, the Liberal Democrats' women's equalities spokeswoman, told the House of Commons she had seen employment policy shrinking, while the Conservative shadow work and pensions secretary Helen Whately accused Liz Kendall of avoiding difficult decisions.

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