Labour’s Ill-thought out Welfare Plans.

Jobless young adults would lose their automatic right to some state benefits under a Labour Government to encourage them to find work, Ed Miliband will announce on Thursday.

The 18-21 age group would no longer qualify for Jobseeker’s Allowance (JSA) and income support if they had skills below Level 3. If they undertook training to try to reach that level, they would qualify for a £57-a-week allowance, the JSA rate for under-25s. It would be means-tested and paid only if their parents’ joint income were less than £42,000 a year. Unemployed young adults would normally be expected to live with their parents rather than claim housing benefit.

The “tough love” plan is aimed at tackling the problem of almost one million “Neets” – young people not in education, employment or training. It would affect about 100,000 people, seven out of 10 of the 18-21 group claiming JSA. Current benefit rules prevent them training while looking for work.

Labour claims the move would save at least £65m a year in lower benefit payments and much more in the long run, because a “Neet” costs the Government more than £2,000 a year for the rest of their working lives.

Although denying benefits is bound to cause controversy, Mr Miliband will describe the move as “progressive not punitive”. It would not apply to people with young children or disabilities, which prevent them preparing for work. He will say the present system is unjust for young people not at university because they get no state support if they do more than 16 hours a week of training or further education.

The proposal forms part of a blueprint published by the IPPR think tank on how to create a fairer society in an age of austerity. The “Condition of Britain” report will shape the policies on which Labour will fight next year’s general election.

Mr Miliband will also endorse the IPPR’s plan to restore the contributory principle to the heart of the welfare system. Under Labour, the higher rate £71-a-week JSA, currently paid to people who have been in work for two years, would kick in only after five years in work, but the level would be raised by between £20-£30 a week

Independent.

The Guardian notes,

The removal of JSA for those with skills below level 3 would affect seven out of 10 of the 18-to-21-year-olds currently claiming JSA, and initially save £65m.

Comments.

• Making the benefits of people under 21 dependent on their parents’ income is wrong in principle: it makes them…dependent on their parents and fails to respect them as adults. If they can vote why can’t they have the same rights as everybody else?
• Why are people NEETS? Is Labour proposing to massively expand real education, or to use the existing system of training ‘providers’, many of whom have contributed to the dire results of the Work Programme as we know it. And what happens to those who do have Level 3 qualifications? We await clarification on this.
• Unemployed young adults will be “expected” to live with their parents. This is to confine people to their family home. The reasons why this is not suitable for many people are too obvious to need citing – though apparently not something registered by the paternalistic ‘blue Labour’ advisers who have shaped this idea. This does not just apply to those with young children or with disabilities.

One could add that the contributory element seems appealing to those who would qualify, but what about those who do not?

On this point the Guardian says,

Miliband will reveal further plans to make welfare more conditional by linking benefit payments to national insurance contributions.

Under his plans, people would only be able to claim the higher rate JSA of £71 a week after they have paid National Insurance for five years, instead of the current two. The contributory element of the welfare system has been eroded in Britain and is much smaller than in most European economies.

So many people will be further pushed into poverty.

And for those already on benefits.

Are we to see  the real level of our benefits continue to erode well below the poverty line?

Will we still have to pay the ever rising cost of Council Tax?

Will full Housing Benefits be restored?

Miliband is silent.

Labour to Keep Benefit Cuts: Will They Keep a (renamed?) Work Programme?

This is a key part of Miliband’s speech on Welfare,

State benefits could rise by less than inflation each year under a Labour government because of the cap on welfare spending announced by Ed Miliband.

Until now, Labour has suggested it would restore the link between benefits and inflation if it regains power. It voted against  breaking the link in April, when the Coalition Government pegged the annual uprating to 1 per cent for the next three financial years up to 2015-16.

Is this clear? Well not entirely,

Labour sources told The Independent that a decision on whether to restore the link would  not be taken until much nearer the election. It would not be financed by extra borrowing. If the party were in government now, restoring it would be funded by bringing back a 50p top rate of tax on earnings over £150,000 a year, which was cut to 45p in April.

Katy Clark, a Labour MP, warned that “some of the most vulnerable,” including the disabled, would lose out if Mr Miliband’s benefit cap were not set high enough. “The devil will be in the detail,” she said.

Miliband also said this,

“Overcoming worklessness, rewarding work and tackling low pay, investing in the future and recognising contribution: these are the Labour ways to reform our social security system.

“We have always been against the denial of opportunity that comes from not having work. And against the denial of responsibility by those who could work and don’t do so. This country needs to be a nation where people who can work, do. Not a country where people who can work are on benefits.”

Now what are they going to about the failing Work Programme?

To remind us all, Richard Johnson said in the Guardian that the work and pensions select committee found this.

The committee acknowledges that the WP simplified the sector. It has shifted things to payment by results, supposedly reducing risk to the public purse. The contractors are highly variable in quality. Their performance is improving, for some jobseekers anyway, but they are running the service with massive caseloads. “Creaming and parking” (helping the jobseekers that are easier to find work for and ignoring the hard ones) is endemic. Specialist services, to address complex jobseeker needs such as disability or homelessness, are underused, and specialist subcontractors get a raw deal. The WP also fails to engage adequately with employers and has a poor relationship with Jobcentre Plus.

The fundamental flaw is laid bare in the £248m that the committee says the Treasury is clawing back for underspend on the WP in 2012-13 – money that was allocated and that contractors haven’t earned.

The initial WP concept (as set out by Lord Freud, now responsible for the rollout of universal credit) was based on the simple notion that it costs a shedload of money to keep people on benefits – more than £100m a day. Surely, it is better to invest in welfare-to-work programmes to reduce the benefit bill through moving people into work. If the Treasury can’t find the additional cash for extra welfare-to-work programmes, then get private sector firms to fund it and pay them back out of the benefit savings they generate.

Some people, even after years of unemployment, find their own job. Money spent helping this “deadweight” will be wasted. Some people, however, are at risk of getting stuck on benefits and never moving off them. The higher the levels of disadvantage, the more complex their needs are likely to be, and the more expensive any solutions. But the jobseekers that cost more to help will be the ones that deliver a greater return in reduced long-term benefit liability.

It appears that this link between programme investment and savings has been forgotten. The payments made to WP contractors, as noted by the committee, are ineffectively targeted. The contractors are not incentivised to risk spending on jobseekers who appear hard to help. With limited overall funding, contractors are trying to protect themselves by disinvesting in the programme, running with caseloads of up to 180 jobseekers per adviser. This creates a vicious cycle, with high caseloads meaning low outcomes, meaning further disinvestment.

The £248m underspend gleefully recouped by the Treasury represents a massively increased risk to the public purse. It indicates lower levels of “off-flow” from benefits to employment, which will push up the benefit bill in future years. With those mostly likely to be parked on the WP representing the biggest risk. The programme is applying a sticking plaster, counting the unused splints, and leaving the patient crippled.

We would add that that

• The Work Programme is simply not finding people jobs.
• It offers no real training.
• The companies that run it form a lobby to grab more public money regardless of results.
• It creates an army of people unhappy with their treatment (sanctions, bullying, absence of courses).
• It is bloody useless.

The worst thing that Labour could do is to offer a new version of the Work Programme.
We need work creation, not another system of outdoor relief for the unemployment business.

Miliband and Welfare Reform.

Ed Miliband on Welfare Reform:

This is one of the hardest issues for our party because all of us know in our communities people who are in genuine need and who worry about the impact of new medical tests, or changes to rules on them.

At the same time, let’s be honest, we also know there are those for whom the benefits system has become a trap.

That is not in their interests or the interests of us a society and we are right when we say it must be challenged.

Reforming our benefits system is not about stereotyping everybody out of work, it’s about transforming their lives.

Real help matched with real responsibility.

That is why on welfare, I will look closely at whatever the government comes forward with: not arbitrary cuts to benefits but a genuine plan to make sure that those in need are protected and that those who can work have the help they need to ensure they do so.

Work is a central part of life. But it is not all that matters.

We all care about making a living, but we don’t just care about that.

 

More Here.

What does this mean?

One indication could show us.

There are rumours that our old friend James Purnell – the man who began the whole miserable process of ‘welfare reform’ – may seek a post in the Shadow Cabinet. In the same role?

We shall be watching developments like ‘awks.