The UK should aim for the highest employment rate in the G7 within a decade, on a path to a world-leading 80% employment rate by 2035. This would help boost our economy by £23 billion, improve the public finances by £8 billion, and raise household incomes by £830 per year. It would require a step change in the scale and reach of employment support in particular to better help disabled people and older people who want to work.
This report argues that the UK should aim for an 80% employment rate for 16-64 year olds by 2035, requiring an extra 1.7 million people in work (not accounting for population growth) and bringing the UK into line with leading countries. This could boost our economy by £23 billion per year, the public finances by £8 billion, and household incomes by £830 per year on average. The rise could be up to £2,000 (14%) for lower income households, given they have the lowest employment rates at present and hence are likely to benefit most from increases in employment.
As an interim step, the UK should aim for the highest employment rate in the G7 within a decade, requiring an additional one million people in work. Of course the quality of work, pay and progression opportunities all matter too, but the focus of this research is on employment rates.
Growth has been slow since 2008 and our employment rate has flatlined since the pandemic. We can change both of these things. Doing so requires ambition and a new approach to policy and delivery. The prize is well worth it.