Reduction in the unemployment rates in Britain
In Britain the rate of unemployment is calculated in two ways, one way is through the rate based on the claimant count, which includes all those who are unemployed and actually claiming benefit in the form of Jobseekers Allowance. The unemployment rate in particular is currently at 5.2%, a rate which is the lowest among the world's leading industrialized countries.
The British macro-economic policy involves the achievement of four main objectives, which include full employment, price stability, sustainable and high rate of economic growth, Balance of Payments, which is at equilibrium. With regards to the objective of reducing unemployment in the macro-economic policy, the labor government had been trying hard to reduce structural or long-term unemployment through its new deal. Here's a look at the factors which have helped in the reduction if unemployment rates in Britain:
The British economy is in an up-swing , which means price stability and a reduction in inlfation. All this means more wages and salaries for people, which means more job opportunities and better incomes.
The above factors show that both the economy and the government policy have been conducive to reducing the unemployment rate. While the economic reasons are important factor, the other important factor is the steps taken by the labor government to reduce unemployment though implementation of the objectives of the new deal.
The new deal is a program brought out by the labor government in the interest of public welfare, in the year 1998.
The person credited with devising the new del plan is LSE Professor Richard Layard. The purpose of this program is to reduce unemployment by providing training, subsidized employment, and voluntary work to the unemployed. In the year 2001, the amount spent to achieve the targets of the new deal was 1.3 billion.
The new deal has given the government the power to withdraw benefits from those who refused "reasonable employment".. A complementary project to this program was introduced in the year 1999 and it was called the Working Families Tax Credit. This tax credit scheme is aimed at low income workers which and it provides them an incentive to work, and to continue in work.
According to Professor Richard Beaudry, from the Department of Economics at the University of York, defined as follows the New Deal in a 2002 paper, Workfare and Welfare: Britain's New Deal (pp.8-9): "The New Deal reforms