Monday, March 05, 2007

Welfare to work

Jim Murphy discusses the review, just published, of the government's welfare to work policies, here.

The review itself was conducted by a businessman, Sir David Freud, and its main recommendation is that, erm, businesses should be given contracts to get people off benefit and into work. He couldn't find any evidence that the private sector was better at doing this than the public sector, but thought it was worth a go nonetheless. You can read the report in its full 144 page glory here.

Ministers are happy enough with getting alternative providers involved, but are more preoccupied with conditionality - that is to say the extra responsibilities that should be put on people who are not working to find jobs, in exchange for the extra rights of getting support. As Jim says "we all need to be committed to doing our bit."

I'm all for everyone doing their bit, but it's worth being aware of who isn't pulling their weight. If, instead of listening to advisers from the 'business community', the government listened to people who are in and out of low paid work, then they would know what the barriers to work actually are - wages which are too low for people to be better off in real terms in work, no training or opportunities to progress once in work, no option to work flexibly to fit in with caring or other needs, discrimination by employers against people with a history of mental health problems and a lack of affordable childcare. Whether or not support to get a job comes from the public, private or voluntary sector is not a big deal, providing it is tailored to people's needs.

If employers, public, private and voluntary sector, paid people enough that they weren't in poverty even when working full or part-time, offered them training and support in work, let them work flexible hours, didn't discriminate against potential employees and if they or the government provided a lot more free or heavily subsidised childcare, then many people who are currently in receipt of benefits would be able to work, and the government would not have to spend billions on subsidising low wages and now in providing training and support for people in work for up to three years.

Rising levels of employment over the past ten years have been as a result of structural changes to the labour market, and yet this lazy right-wing idea that unemployment is caused by people behaving unreasonably continues to dominate the debate. At the moment, unemployed people are seen as the problem and businesses as providing the ideas for the solution, the truth is almost exactly the opposite way round.


At 7:19 pm , Anonymous David Duff said...

"wages which are too low for people to be better off in real terms in work"

Or, to put it another way, benefits which are so high that wages look like a poor option!

At 8:56 pm , Anonymous angus said...

I see the report-on the basis of no evidence-describes unemployment in Britain as basically 'frictional'.

You don't exactly get that impression from looking at the considerable surplus of registered unemployed over the number of job vacancies that exists even at a national level, never mind in certain areas. At the moment the New Deal is-to a considerable extent-a revolving door between low paid temporary work and short term unemployment that helps keep down the 'long term unemployment' figures.

Here's a radical idea. To reduce unemployment, the government might think about putting serious resources into *creating more jobs* in the public and private sectors, not least through a proper regional policy. Unemployment as an issue needs to be put back on the political agenda.

At 11:38 am , Anonymous David Duff said...

"Here's a radical idea. To reduce unemployment, the government might think about putting serious resources into *creating more jobs* in the public and private sectors, not least through a proper regional policy."

Here's an even more radical idea: cut business taxes and red tape so that more people will have a go at starting their own businesses and thus employ others. Of course, if you really want *more* litter wardens, council tax inspectors, 'Elf 'n' Safety' Jobsworths, etc, etc, all on good salaries and pensions for life, so be it, but don't be surprised when we go broke!

At 11:48 am , Blogger donpaskini said...

Actually, more help for people to start up businesses or be self-employed is something that I think should happen. It's something which has particularly been identified as a priority by some black and minority ethnic people in poverty. Self-employment has the advantage over working for many employers that people are able to manage their time and have more control over their lives and working patterns.

Your point about lowering benefits is still a stupid one, though.

At 11:22 pm , Anonymous angus said...

David Duff,

yes I do think more public service jobs at decent wages would be socially beneficial.

On the 'going broke' thing...cutting business taxes from their present levels (outside the world of Reaganomics) would cost the government money.

As my point about regional policy implied I'd rather we cut business taxes in a targeted way to create more private sector or self-employed jobs in areas of high unemployment. Yes, it would cost money.

At 11:35 pm , Anonymous angus said...

actually I'm in favour of *raising* the present national rate of tax on corporate profits to increase the government revenue base but discounting tax rates where it assists regional development

At 9:42 am , Anonymous David Duff said...

"I'm in favour of *raising* the present national rate of tax on corporate profits"

That's a 'brill' idea! Then, when all the multi-nationals depart these shores for countries where the tax and red tape burden is much less, there will be zillions of unemployed people thrown onto the streets who can be taken on as traffic wardens, diversity inspectors and such like and their pay and pensions can be paid for by, er, ... (Let's start again, shall we?)

At 5:15 pm , Anonymous angus said...

At the moment the UK has one of, if not the, lowest corporation tax rates in the western world. There ought to be some scope to raise it without creating the mass disinvestment you envisage.

Duff by name...


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