Labour will not win the 2015 general election unless we are seen by the majority of British people to be the party of responsible welfare. Whether we like it or not, in 2010, too many people, particularly skilled working-class voters felt that Labour had lost its way on welfare. They felt that their hard-earned money was being used to subsidise households where no one was officially working – or indeed, had ever worked – while their own standard of living was declining. By 2015, Labour needs a simple, clear, costed manifesto commitment on eradicating long-term unemployment as the centrepiece of a responsible welfare policy agenda.
Although the New Labour government made an impressive start on Welfare to Work in 1997, introducing the New Deal programmes for young people, lone parents, over-25s and over-50s, and transforming the Employment Service and Benefits Agency into Job Centre Plus, our record at a time of significant employment growth could have been much better. Labour left office in 2010 with over five million people on out-of-work benefits, including two million people claiming incapacity benefit. The reasons why worklessness persisted are complex, but the overriding cause of long-term unemployment is that, the longer people remain out of work, the less and less attractive they become to employers as their occupational and interpersonal skills, motivation and health decline. In retrospect, government policy on worklessness needed to have focused programme support on people claiming incapacity benefit as well as job seeker’s allowance from the launch of the New Deal programmes, as people with long-term health issues and disabilities probably needed the most intensive support to find work.
Labour has made a start on this agenda with its new job guarantee scheme for those aged 25 or over who have been out of work for 24 months or more in addition to its ‘work or lose benefits’ policy targeted at 18-to-24-year-olds out of work for a year or more. These proposals are modelled on the successful Future Jobs Fund. However, in 2015 Labour needs to be bold and radical as a One Nation Government. The centrepiece of this responsible welfare agenda would be to guarantee every person of working age who has been on benefits for more than a year a paid job with training towards a recognised qualification for 12 months, ideally as an apprentice. We should aim to pay people the living wage rather than just the minimum wage, particularly as people who have been out of work are likely to have debts to pay off. The best way of helping a person who hasn’t worked for a long time or has never worked is to give them a proper job with appropriate support; once in a workplace, their confidence will improve and they will see the value of learning new skills that will help them do their job better, far more so than in a classroom. Most jobs in the private sector are never advertised, work is often found through personal contact, and networks decline rapidly when people are out of work, so supported employment is the best way of overcoming long-term worklessness.
Jobs could be created in the public, private and social enterprise sectors through incentives for micro-businesses and SMEs to take on an additional member of staff through employees’ national insurance waivers; major infrastructure programmes such as a major housebuilding programme, investment in green energy and renewable technology and public transport; and targeted training programmes aimed at occupations with skills shortages and growth potential such as health and social care, construction and engineering. After a year the aim would be for people to become permanent employees or to move on to a different job. As part of a ‘rights and responsibilities’ agenda, people who had been out of work for a considerable amount of time, once they have settled into a supported job, would be encouraged to give something back to society by volunteering in their community.
Critics will say that such a programme would be expensive, and they would be right, but it would be money well spent. The costs of worklessness are very high for individuals, their families and society as a whole. No one wants to be at home all day, in a cold flat or house, with nothing to do and no one to talk to. Being unemployed and receiving rejection after rejection is horrible and incredibly damaging for people’s self-esteem and confidence, and for their children’s life chances. People in supported employment would be paying taxes, the benefit bill would reduce, people’s health would improve and local shops and services would benefit from people being better-off.
Although public finances have been hit very hard, as a nation we still continue to spend billions of pounds through FE colleges, Job Centre Plus and European Social Fund programmes. We need to ask ourselves if this funding would be more effectively used by investing directly in job creation; the results from the work programme show the limitations of purely focusing on supply-side measures such as CV preparation and interview coaching. A future Labour government also should avoid having a myriad of different employment and regeneration schemes targeted on the same people and the same deprived areas, but through different central government departments; a far better approach would be to have one high-quality, well-funded national programme and to work closely with employers, Job Centre Plus and local authorities to tailor the design and delivery of the programme to local requirements. In some parts of the country, such as the north-east, Lancashire and areas of Wales, Cumbria and Cornwall, such a programme would be very difficult to deliver because of the weakness of the private sector economy, but would focus attention on the need to create economic growth in areas that have never really recovered from the collapse of stable industries.
Britain will not be a One Nation country until everyone of working age has a reason to get up in the morning. A guarantee of a paid job to everyone who has been out of work for more than a year would do more to create One Nation Britain than any other single policy decision of a future Labour government. Such a manifesto commitment would also demonstrate that Labour is serious about creating a responsible welfare state, where taxpayers’ money is used wisely and people cannot live a life on benefits.
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Sally Prentice is cabinet member for culture and leisure in Lambeth. She tweets @SallyPrentice
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