Saturday, 26 January 2013

Labour need to answer key questions on its new approach to the long-term unemployed.

Labour's attempt this month to sound tough on benefits for the long-term unemployed is worrying. They are adopting a carrot and stick approach. Britain,  Ed Balls says, "needs real welfare reform that is tough, fair and that works." It is sadly familiar language.

Labour says it will offer a "job guarantee" to the long term unemployed. Government will "ensure" there is a job for each adult who is long-term unemployed, and people will be obliged to take this job or risk losing their benefits. It sounds fair, a guaranteed job. But where would this job come from?

There are currently around 130,000 adults over the age of 25 who have been out of work for 24 months or more. According to official figures unemployment now stands at 7.7% of the work force.  But unemployment is unevenly distributed across the UK. In the worst affected areas such as Ladywood and Hodge Hill in Birmingham it is as high as 10 - 11.7 %.  Unemployment in Birmingham is greatest in the inner city areas. In one ward it stands at almost 30%. Finding jobs in these areas is particularly difficult.

The West Midlands has one of the highest economic inactivity rates in England. In February last year West Midlands business leaders urged the Government to promote a “culture of entrepreneurism” and to encourage banks to lend to industry – and warned they could not create jobs without state support.

Last year Channel 4 News uncovered data showing that the 'welfare to work' company A4e had been able to secure sustainable employment for only 3.5% of job seekers under the government's work programme. This flag-ship programme clearly isn't working. In November, Jonty Olliff-Cooper, director of policy and strategy at A4E, blamed the coalition for the failure of the company to meet targets suggesting that there "isn't enough money to tackle long-term unemployment."

There are no easy or quick fixes to finding work for the long term jobless. It requires sustainable investment to create real jobs and it requires the development of skills to match them.  It needs jobs created in areas of need. 

Joblessness is complex. There is no simple solution to matching job opportunities with required skills and to locate businesses in areas of high unemployment.  A family cannot move simply to regions of higher employment. Costs of housing and child care and moving away from family support are all barriers. Unemployment and poor job opportunities are economically structural rather than behavioural. Building real jobs needs investment, but banks are still failing to lend to start up businesses or to provide businesses with the funds they need to grow. 

Labour's guarantee of a job is great but it might be more difficult to achieve than the headline suggests. Building real jobs will take time and investment. And there is one nagging question Labour needs to answer about its new 'tough'  approach. What happens to those who fail to get a job? 

According to the new policy their benefits will be cut. But then what? Is Ed Balls willing to watch as they lose their homes and their children fall deeper into poverty? Labour's carrot and stick approach begs more questions than it answers.

Postscript

I sometimes wonder when I listen to discussion about 'the unemployed' and 'getting tough', or about 'strivers' and 'shirkers'  whether we appreciate fully the seismic impact of the financial crisis on British businesses and jobs. In the space of 12 months in 2008/09 a staggering 220,000 companies went out of business with the loss of 1 million jobs.  What is needed is investment and the creation of new jobs. What is not needed is cuts in spending that will further contract the economy and increase the deficit in public finances through loss of tax revenue. The way out of recession is to get people back to work productively, spending in the high street and paying taxes. 


1 comment:

  1. Exactly. And this is why I found that little disclaimer in Michael Meacher's otherwise impressive speech on Atos and the disabled so worrying. He says:

    "Is it reasonable to pressurise seriously disabled persons into work so ruthlessly when there are 2.5 million unemployed, and when on average eight persons chase every vacancy, unless they are provided with the active and extensive support they obviously need to get and hold down work, which is certainly not the case currently?"
    http://www.michaelmeacher.info/weblog/2013/01/my-speech-on-atos-work-capability-assessments/

    It is that weasly "unless". He is *still* not condemning the Unum biopsychosocial disability-denying dogma that insists even a cancer victim with less than a year to live, MUST STILL WORK. Albeit with the right "support", which, in light still of more sanctions for Labour's mandatory jobs scheme, will only amount to the continued harrassment of individuals whose doctors and consultants have recommended should refrain from *all* work.


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