Labour’s Job Plans, Concerns After Some Serious Thought.
“Shadow Chancellor Ed Balls unveiled the scheme, saying that there would be pension tax relief cuts to raise the £1bn to pay for the initiative, which would help just under 130,000 people.
Plans would involve the government subsidising companies to take on staff from those enrolled in the scheme for six month periods, which would help claimants find permanent work or fall back on jobseeker’s benefits.
Initially the scheme would be for the long-term unemployed but, if it proved a success, would then be extended for those out of work for a year.
Mr Balls said in a statement, “A One Nation approach to welfare reform means government has a responsibility to help people into work and support those who cannot.
“But those who can work must be required to take up jobs or lose benefits as a result – no ifs nor buts. Britain needs real welfare reform that it tough, fair and that works.” “From here.
Now we have consistently demanded real jobs for the unemployed. *
Indeed it is one of our demands.
But as Chris Dillow says,
You can rely on the Labour party to live down to its reputation as a party of capitalism.
First, the fact that it will be compulsory for the long-term unemployed to take up the jobs panders to a mistaken “divide and rule” rhetoric that distinguishes between skivers and strivers. As Neil says, the party is – yet again – “running scared of the Daily Mail”.
Secondly, the policy will, as Liam Byrne says, “provide subsidy” to private sector employers to hire the long-term unemployed.Labour will, in effect, give taxpayers’ money to Tesco so it can employ more shelf-stackers.
And herein lies the economic problem with the scheme. At the margin, employers will prefer to hire a subsidized long-term unemployed person rather than an unsubsidized short-term unemployed one. In this sense, Labour’s plan improves job prospects for the long-term unemployed, at the expense of the short-term unemployed, and has a deadweight cost of paying companies to do what they would have done anyway*.
Labour’s plan thus falls far short of more sensible “employer of last resort”-style policies to combat unemployment. It accepts capitalism as it is, and fails to confront the fact that capitalism is unable to provide work for all.
The plans also avoid a number of other issues.
- Will it be the existing set of companies running the ‘Work Programme’ who decide on the fate of the out-of-work required to take up these jobs?
- What exactly be these posts?
- What guarantees will the unemployed have if their work turns out to exploitative and they want to complain?
- How will labour change the Universal credit scheme will is already going to condemn many low-paid workers to deeper and and deeper poverty?
- What will happen to those who refuse to take up a job? Starve in the streets?
The scheme is one step in the right direction – talking our real work,.
We have to remember that the Liberal-Tory Coalition want the long-term unemployed to work for free, to the benefit of private companies and, oops, the ‘social sector’.
But there is a step in the wrong direction putting the unemployed again at the mercy of the ‘Unemployment Business.”
* These are the demands of Ipswich Unemployed Action (from ‘About’ section above).
- Raise our Benefits to a living level.
- We want the minimum wage for any ‘voluntary’ work they make us do.
- There should be an independent appeal and monitoring system – open to all – for anyone on the Work Programme,
- We want real training, not the sham courses we have now.
- No to Workfare.
- Above all we want to be treated as human beings – not things the DWP, Providers, and Government Ministers can claim rights over. We should have rights, and we want them now!
- We want real jobs, not endless ‘job-searching’.
- And now, we want the Work Programme closed down!