The Labour Market Triangle

The Labour Market Triangle

Employment Protection, Unemployment Compensation and Activation in Europe

Globalization and Welfare series

Edited by Paul de Beer and Trudie Schils

Currently, European governments are being challenged to find an optimal social policy strategy that fosters 'flexicurity’, whereby a flexible, well-functioning labour market is achieved, whilst protection for workers is maintained. This fascinating book presents an in-depth study of the particular combination of unemployment insurance, employment protection and active labour market policies prevalent in seven European countries. The editors explore the formal laws and regulations, as well as the administration and implementation of social policy, paying special attention to the role of the social partners. The country comparison shows that the combination of social policy instruments is important to labour market performance, but that multiple optimal mixes already seem to exist.

Chapter 4: The United Kingdom

Jochen Clasen

Subjects: economics and finance, labour economics, social policy and sociology, comparative social policy, labour policy


Jochen Clasen INTRODUCTION: A DIFFERENT KIND OF TRIANGLE1 The type of, and the interaction between, employment protection, active labour market policy and unemployment benefit support in the UK bears little resemblance to other countries covered in this book. Despite a moderately expansionist trend since 1997, the current government is anxious to maintain a deregulated and flexible labour market. The UK has one of the lowest levels of individual employment protection in Europe, benefits for the unemployed continue to be rather modest and spending on active labour market policy remains relatively low, with longer training courses or subsidized employment playing a minor role, while job search, intensive counselling and individual case management have been emphasized. Also unchanged is the top-down centralized policy model. There is no institutional involvement of the social partners in policy making which goes beyond information and consultation in questions of employment law. Rather than established tripartite talks as elsewhere in Europe, employers are primarily seen as partners in policy implementation. The architecture of and the interaction between the three policy domains reviewed in this chapter have to be understood within the context of a distinctive political economy. The fields of social insurance and industrial relations elsewhere in Europe might be regarded as ‘tightly coupled’ (Manow 1997; Hemerijck et al. 2000) with benefits functioning as a ‘social wage’, or wage replacement benefits rendered by employment-based contributions, complemented by a high level of employment protection. No such link exists in the UK where the term ‘social wage’ makes little...

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