UK minister lays out workplace reforms to help Liz Truss deliver growth plan

Chloe Smith pledges to crack the challenge of the 'economically inactive'

Britain's Work and Pensions Secretary Chloe Smith arrives for the weekly Cabinet meeting at 10, Downing Street. AFP

Britain’s work and pensions secretary has set out her plan for workplace reforms that could help deliver Prime Minister Liz Truss’s promised economic growth amid increasing market turmoil.

After weeks of being noticeably absent from the media rounds while other Cabinet members came out to defend the new administration’s vision to take Britain forward, Chloe Smith on Thursday explained her intentions. Unveiling a three-point plan, she pledged to stimulate the country's labour market, which she said has the potential to be a “gold mine for growth and opportunity”.

Her speech in London on Thursday at an event hosted by the Policy Exchange, a Conservative think tank, was delivered as multiple media reports suggested officials in No 10 were working on scrapping parts of Chancellor Kwasi Kwarteng’s mini budget. Ms Smith declined to answer questions about the reports.

Instead, she detailed how she is going to deliver a shake-up of the UK's welfare system to help claimants into work or help those who are employed increase their hours.

With more than 1.2 million job vacancies across Britain, Ms Smith said it is only right that the Truss administration is “firm but fair” in ensuring people are ready to take opportunities available to them. She reiterated Mr Kwarteng’s announcement that those receiving Universal Credit will have to demonstrate their efforts to find work.

Secondly, she pledged to reduce the number of people in a state of “economic inactivity”, referring to those of working age and ability who are not actively seeking employment while claiming benefits.

“Economic inactivity is a rising trend,” she said. “We can’t afford for more people to join it. It stands at nine million.”

The government has pledged to invest £1.3 billion ($1.43bn) over the next three years in targeted employment support for those with disabilities and health conditions to help get them into work.

Thirdly, she said she would secure a “new deal with employers” which would offer more support to firms looking to fill their vacancies.

In return, she said businesses would be expected to invest in the progression and health of their staff.

“Doing so is a crucial step to ensure that we don’t face similar labour market challenges in the future,” she said.

She said she is determined that the Department for Work and Pensions plays “its full part in delivering a new era for Britain focused on growth”.

Ms Smith touched on the need for greater cohesion among Whitehall departments to deliver the government's plan, and stressed the need to be “led by the evidence by reforming welfare to create stronger incentives, extra support and clearer expectations on people to move into work and to increase their hours”.

She said if businesses and the government work together “we can unleash the full potential” of Britain as an “aspiration nation”.

However, she did not mention corporation tax rates, one of the areas said to be under consideration by Downing Street officials. Before Ms Truss entered No 10 in September, former chancellor Rishi Sunak had announced a plan to raise corporation tax from 19 per cent to 25 per cent. Cancelling the plan was a central pledge of Ms Truss's successful campaign to become prime minister.