by John Stephenson
Prior to 2010, Tory commentators often protested in harmony with tabloid headlines denouncing New Labour’s welfare policies as weak. In retrospect it is often acknowledged that the party’s work capability assessment was poorly designed and allowed people to take advantage of state hand-outs. Individuals in genuine need of incapacity benefits were often shunned on to job seekers allowance, leading to a toilsome cycle of temporary work while the support they needed was overlooked.
However, on the back of the coalition’s failures over unemployment and in the midst of pressure to reveal further policy proposals, Labour’s compulsory jobs guarantee offers a real alternative to the Tory-led government’s strategy to get people back to work.
Under the scheme, Labour would guarantee every adult who has been unemployed for a period of 24 months or more a work placement, with an aim to eventually reduce this time period over the long-run. Such an approach is regarded by many economists as being superior to a standard liberal economy, so long as political considerations – such as the wider ramifications for the disabled and the ratios between public and private sector employment – are carefully controlled.
While the policy would undoubtedly be costly – coming at a fee of around £1 billion for the taxpayer – there is plenty of room for manoeuvre within the current chancellor’s budget. For instance, the party are keen to stress that such funds could be acquired by reversing the coalition’s decision to stop tax relief on top earners’ pension contributions being limited to 20%, a move which is said would save the government around £2 billion.
Senior figures within Labour, such as Ed Balls and Liam Byrne appreciate that work should pay more than benefits as a matter of principal. However, the proposals indicate that benefits would be capped according to geographical location, taking into account the higher living costs associated with areas such as London and Manchester.
In doing this it could potentially prevent the sharp-rise in homelessness predicted by charities and academic bodies alike, as a result of government plans to increase rents and limit social housing tenancies. In a 2012 report produced by the charity Crisis, Heriot-Watt university and the university of York, evidence suggested that “almost all aspects of the coalition government’s welfare reforms are considered to be problematic with respect to their implications for homelessness”.
However, while the plans would step away from the coalition’s one-size-fits-all cap, this is not to say they would be soft. As part of a more hard-line approach from the Labour Party, Balls has called for tougher scrutiny of claimants so as to better assess their particular circumstances. What’s more, individuals turning down offers of employment would potentially be denied further hand-outs.
Not only would this aid people in getting back into a working routine, it would also put more money into the pockets of those facing economic adversity, meaning a likely stimulation of the economy and an eventual reduction in the social costs of unemployment.
Additionally, it would address some of the more delicate problems detailed in Iain Duncan-Smith’s own social justice strategy, such as his concern over the rise in mental illness within the UK. Research conducted by the British Psychological Society shows that individuals undergoing a lengthy spell of unemployment are likely to experience “higher mean levels of strain and negative feelings” in comparison to their employed counterparts.
Such findings are concerning, especially considering the number of adults over the age of 25 out of work for 24 months or more has increased by around 146% in the last 2 years. Likewise, our younger generations are at considerable risk. As recently as May 2013, the ONS released figures stating the number of unemployed 16-24 year olds was as high as 973,000; having increased by 15000 since the previous quarter.
Young people can find themselves in a catch-22 situation, looking for first-time work while employers demand relevant skills and an array of references. A jobs guarantee would provide such experience and give them the communication skills and know-how to strike up contacts and further opportunities.
In the meantime, employment remains around the 2.5 million mark under a government with a work programme that has failed to meet any of its initial targets and still only gets 13% of its participants into paid employment. This alongside a new-fangled “Youth Contract” which failed to assist even 5000 young men and women in finding a job in the last year. Terrible really, when you consider their target was 53,000.
John Stephenson is a politics student at Lancaster university