Posts Tagged ‘long term unemployment’

Labour’s compulsory jobs guarantee offers hope for the long term unemployed

28/08/2013, 11:44:33 AM

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.


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