Title:
WP 50 - The distribution of responsibility for social security in the United Kingdom
Abstract:
High levels of unemployment, or high levels of social expenditures as well as the growing demand for a flexible labour force have given new impetus to the world-wide discussion on what model to use for an efficiently operating labour market and in particular on the role of institutions. Although there seems to be a growing consensus on the restricted governmental role in recent decades, this has not been translated into a unanimous appraisal of the role of intermediary organisations, such as trade unions. There is no clear view on an appropriate distribution of responsibility between government, social partners and the market. The research project ‘distribution of responsibility for social security’ aims to create a scientific basis for a clear and consistent view on the role and distribution of responsibilities between the different labour market institutions. As part of this research project, this paper provides an elaborate country study of the United Kingdom.
It is shown that the domains of industrial relations, employment protection and unemployment compensation in the United Kingdom are separate and cannot be regarded as functionally complementary as in other countries. The government is anxious to retain the highly deregulated and flexible labour market and there is no institutional involvement of the social partners in policy making, either in employment law, labour market policy or unemployment insurance. Instead of established tripartite talks, both employers and employees are consulted and informed and are primarily seen as playing important roles as partners in policy implementation. National government determines the conditions for social insurance which offers minimum protection and for active labour market policies, with the New Deal programmes recently introduced. In the field of employment protection, as a ‘common law country’ the UK relies on decision-making by judges in practice rather than strong legislation. The labour market in the UK is characterised by relatively high labour participation, yet traditionally high youth unemployment and rising inactivity among prime-aged men and minimum protection during unemployment spells.
