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Attention: Industrial, business and social affairs correspondents, planning and news desks

Economy needs the two million ‘want-to’ workers into employment

To achieve full employment and economic growth the government’s Spending Review 2004 should focus on getting into employment the two million people who say they want a job but who aren’t in work and aren’t classed as unemployed.

According to the TUC’s ‘Inactive Britain’ report out today (Tuesday 6 January) the government has achieved record levels of employment. But the damaging economic and labour market policies of the 1980s and 1990s mean that the UK continues to have one of the highest levels of inactivity among working age people in Europe.

More than twice as many people in the UK want a job but are out of work than show up in official unemployment statistics. About 22 per cent of the eight million inactive people in the UK want a job, compared with the European average of just under 10 per cent.

The government has made good progress in reducing inactivity and increasing employment among specific groups, notably lone parents and some disabled groups. But for those without qualifications the employment rate has fallen since 1997. And little impression has been made on the large numbers of older workers with sickness and disability problems who want a job.

The TUC is calling for an ‘Activity Strategy’ to be central to the government’s Spending Review 2004 that sets realistic targets to get the two million ‘want-to’ workers into the workforce, including:

· the employment of 76 per cent of all working age people by 2010 (74.6% currently), 70 per cent of lone parents by 2014 (currently 53.4%) and 60 per cent rate of disabled people by 2014 (currently 49.1%).

· major new investments in labour market programmes targeted on the disabled, lone parents and people without qualifications, and delivering the government’s Childcare Strategy to narrow the gap in provision between the UK and the rest of Europe.

Brendan Barber, TUC General Secretary, said:

'The job market in the UK is quickly tightening. The government has reversed the dive in employment but now has an economic imperative to get a grip on the massive level of inactivity caused by the policies of their predecessors.

'The two million excluded want to work and targeted investment starting in 2004 could get them into the workforce as soon as possible to help drive UK economic growth.'

Summary of ‘Inactive Britain: full employment - the next steps’:

• In 2003 in the UK there are eight million ‘inactive’ working age people (16 - 64 yrs), that is, people not in work or actively seeking work and not classed as ILO unemployed. Of these, two million say they want a job.

• Most inactive people of working age who want to work are women (60 per cent). The most common reason for female working age inactivity is family and care responsibilities, given as a reason by 63 per cent of inactive working age women.

• For men the most common reason for working age inactivity was chronic sickness or disability (51 per cent); a significant minority of mainly older women also gave this as a reason.

• In 2002 the European Labour Force Survey showed that in Britain 22 per cent of working age inactive wanted a job compared with 12 per cent in Italy, 8 per cent in Germany and Spain, and 3 per cent in France.

• Despite the UK having one of the lowest unemployment rates in Europe (5%) the TUC estimates ‘want work’ rates for the UK at 11.5 per cent using international definitions of working age, compared with a European average of 11.5 per cent. Italy and Spain were much higher, at 15.9 per cent and 14.7 per cent respectively, Germany nearly the same at 11.4 per cent and France and the Netherlands lower at 9.8 per cent and 6.5 per cent respectively.

• Since 1997 the UK has reduced ILO unemployment by more than the EU average. The numbers classified as ILO unemployed fell by 22.3 per cent in the UK between 1997 and 2002 compared with a EU average fall of 19.9 per cent. But the fall in the numbers who want work has been more modest, at 4 per cent in the UK against an EU average fall of 11.6 per cent.

• In 2002 chronic sickness and disability accounted for 27 per cent of all working age inactivity in the UK (including those who said they did not want a job) compared with a EU average of 11.5 per cent.

• Family and caring responsibilities accounted for about 26 per cent of inactivity in the UK’s working age population compared with a EU average of 24 per cent. However, the UK compares less favourably with Northern European economies such as Germany (19 per cent) and the Netherlands (18 per cent).

• In most other European economies working age inactivity was more likely to be caused by young people entering higher education. This accounts for nearly 40 per cent of all working age inactivity in France, 30 per cent in Germany and Italy, and just 16 per cent in the UK. Fewer young people enter full time education in the UK and when they do are more likely to combine work and study.

• Retirement before 65 is also a more common cause of inactivity in Europe, either because retirement age is lower (France), state retirement benefits are more generous, or because in some countries, such as Germany, it has been much easier for older workers with chronic sickness problems to take early retirement.

Notes to Editors:

UK figures are taken from the official household Labour Force Survey using the UK national definition of working age as 16 to 59/64. Inactive means all those not in work or classified as ILO unemployed (latter are defined as looking for work in past four weeks, able to start a job in two weeks time).

TUC ‘want work’ rate is estimated by adding ILO unemployed and inactive who want work and showing the result as a share of the active labour force plus the inactive who want work.

European comparisons are all derived from the European Labour Force Survey for Spring 2002. Working age is somewhat wider than the UK national definition and includes all those between the ages of 15 and 64.

-The full report is available at: http://www.tuc.org.uk/economy/tuc-7454-f0.cfm

Contacts:

Media enquiries: Liz Chinchen 020 7467 1248 or 07699 744115 (pager) or email bhurley@tuc.org.uk

The TUC offices close at noon 24 December. Duty press officer up to and including 29 December is Nigel Stanley who can be paged on: 07699 755102. Duty press officer from 30 December - 5 January is Liz Chinchen who can be paged on: 07699 744115.

Press release (1,200 words) issued 6 Jan 2004