by Stephen Timms
Ed Miliband has set out the central challenge his government will need to address: “This country is too unequal. And we need to change it.” Our task is to make this change in a radically different landscape then when Labour took office in 1997.
Ed has acknowledged that inequality will have to be tackled in a period when there won’t be much extra money around. The government’s oft-proclaimed economic plan has fallen disastrously short of its deficit reduction target. We were promised the deficit would be ended in this Parliament. In fact, it won’t even be halved. That means we will be able to shift spending priorities, and to alter regulation, but big new spending programmes – beyond a small number of key priorities with specified funding – will not be on the cards for some years.
With the tools that will be at our disposal, we will need to tackle seriously long term unemployment, especially among the young; to raise real wages; and to tilt the balance of power in favour of the consumer, the citizen and the worker.
Everything points strongly to devolving power. There is, of course, strong impetus in this direction from the Scottish referendum. Powerful economic arguments for devolution were set out in Andrew Adonis’s growth review in July. And the work I have been doing on employment support points to a much more localised approach too.
Andrew Adonis’s review calls for a “bold and simple offer of devolution”, ending the excessive centralisation which has held back economic growth in England. He argues that: “spending on economic development is trapped in departmental siloes that do not sufficiently reflect economic realities”.
His case is well illustrated by the poor performance of the coalition’s approach to employment support. Hundreds of millions of pounds have been spent on the government’s Work Programme, and hundreds of millions of pounds have been spent on skills support – for example by increasing the number of apprenticeships. But there has been a complete disjunction between the policies directing them. The programmes have worked at cross purposes.
They have been overseen by two huge Whitehall departments with different agendas. For example, the criteria set out by the Department for Business, Innovation and Skills make it almost impossible for an unemployed person on the DWP’s Work Programme to start an apprenticeship.
