Miliband must 'get serious' on labour-market reform
Ed Miliband must "get serious” about labour market reform ahead of the general elections in May, according to a study published by the Centre for Policy Studies.
In the report, author Glyn Gaskarth warns that if UK employment success is to continue politicians must learn from the example set by Germany’s Social Democratic Party (SDP) a decade ago.
Back in 2003, with the German economy close to stagnation, the SPD introduced bold labour-market reforms – labelled Hartz Reforms - that created 2.5m new jobs and revived a flagging economy.
By streamlining the welfare system, improving employment access and encouraging new business start-ups, the SPD successfully breathed life into the country’s economy, as Germany reaffirmed its status as Eurozone’s biggest economy.
Miliband, meanwhile, has instead proposed an “eclectic mix of misguided labour-market policies”.
Labour has pledged to force businesses which hire non-EU workers to also hire an apprentice but, the report argues, the strategy is unlikely to boost employment or skills whilst adding new costs on business.
According to the study published on Friday, Labour’s Job Guarantee proposals are complicated and expensive and the policy is described as nothing more than a wage subsidy, one which cannot be the source of sustainable job creation.
Gaskarth warned that UK politicians must follow the example set by the Hartz Reforms and “get serious about labour market reform” in order to ensure the UK employment success continues.
“The importance of the Hartz Reforms cannot be underestimated,” said Tim Knox, Director of the Centre for Policy Studies.
“Germany has since reversed some of the reforms and its economy is suffering. British politicians of all stripes must heed the warning and ensure that effective long-term labour market reform is a priority.”