Why government must support employers to tackle economic inactivity

Speak to anyone in business this winter and you’ll hear a similar story: the battle to find and retain good people is harder than it’s ever been.

Labour shortages have become a fully fledged national crisis. So it’s little wonder government has begun to look more creatively at ways to plug the gaps – asking people to defer retirement plans, or maintaining disability benefits for claimants willing to work.

Yes, headline unemployment may be historically low, but a staggering nine million people in the UK – or 20% of all working-age adults – are currently classed as economically inactive. Not only is that a drag on our economy and public services, it’s a blight on the life of the nation.

Economic inactivity carries a huge cost to UK productivity – especially in key sectors like food & drink – and also to individuals, with impact that’s as much social as economic. As the new Work & Pensions Secretary, Mel Stride, has already discovered, the reasons why people leave or don’t even enter the workforce are complex and varied. There’s no magic fix that will work for all.

My own company, Cook, knows this better than most. But we’ve also seen first-hand how work has the power to transform lives. Our track record – bringing ‘new’ employees into our kitchens and offices through an in-house training-to-employment scheme we call RAW Talent – speaks for itself. Five per cent of our current workforce came to us this way, showing what’s possible.

Many of Cook’s RAW Talent recruits were once prison leavers; others had experienced mental health or social exclusion issues that made work feel impossible. Where they were inactive before, now they are learning and earning – supporting others, paying tax, and playing meaningful, positive roles in their communities.

Like Stride, we can see government has a critical part to play in getting people into work, but we understand it’s not simply about directing things from the centre. What’s needed is intelligent partnership between policymakers and businesses to create the conditions for the widest possible economic participation.

In common with businesses operating similar programmes, Cook has had to fund RAW Talent entirely on its own. It’s a source of great pride and satisfaction to us all, but it’s also an expensive commitment. While we’re doing all we can to share our knowledge with other great companies, those we speak to often find the costs prohibitive – especially as times get harder.

What we’d like to see is a simple-to-access scheme that shares the investment in schemes like RAW Talent between business and state. And it really is investment – in the future of Britain and its people.

To that end, we’re asking for a tax break or levy mechanism that extends the principles of the government’s existing apprenticeships scheme to other programmes – like RAW Talent – that strengthen the workforce through less obvious, but just as fruitful directions. Not only would this recognise the value they offer, but also create the opportunity for real scale. And scale is what’s needed if we’re really going to get to grips with the national blight of economic inactivity.

It’s why, ahead of the Sunak government’s first full budget in March, I’m calling loud and clear on Stride to make our case with the Treasury. With all the economic headwinds the UK faces, now’s the time, more than ever, to make this simple, cost-effective change happen. Let’s not delay any longer.