Peter Riddell: Political Briefing
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The prize is big. If the proportion of people in employment can be raised from the present 75 to 80 per cent there would be a drop of about one million in the number receiving benefits and public-expenditure savings of £10 billion a year. As Tony Blair put it last week: “I do not believe that we will be able to provide our pensions or public services in the future unless we raise significantly the proportion of people of working age in work.”
How to get people off benefit and into work is being examined by David Freud, a former financial journalist and investment banker, in a review for the Work and Pensions department, due around the end of the month.
Over the past ten years more than 2.5 million more people have jobs, thanks primarily to the strong economy but also, in part, to the various New Deal programmes to reduce youth and long-term unemployment. The percentage with jobs, the employment rate, has risen by 11 points for lone parents and by 9 points for the disabled. That has still left 4.9 million people of working age claiming out-of-work benefits: nearly half are on incapacity benefit. The potential has been paradoxically underlined by the economy’s ability in the past few years to create jobs for 500,000 to 600,000 people from Central and Eastern Europe. If them, why not Britons without jobs?
The Freud review is looking at four areas. First, and most important, is introducing greater conditionality. John Hutton, the Work and Pensions Secretary, has already asked why so little is asked of lone parents until their children turn 16, merely an annual or quarterly interview. One third of such lone parents move straight on to incapacity benefit when their youngest child turns 16. At present, more than half lone parents in Britain work, but the rate is 80 per cent in Sweden and Denmark. Part of the answer is tighter conditions, applying work tests when children are much younger. But much also depends on the planned nationwide extension of childcare facilities.
Secondly, as Mr Hutton will say in a speech in Australia tomorrow morning, more private and voluntary providers should be used to help in providing jobs. At present, the latter manage to place roughly 10 percentage points more people into jobs in employment zones than the public sector-led New Deal does elsewhere. These private and voluntary firms are paid in relation to outcomes, including whether people are still in work after 13 weeks. This could be extended. Mr Hutton is considering longer-term contracts to improve incentives and innovation.
Thirdly, such programmes are not cheap. There are big potential savings from the £50 billion annual budget for working-age benefits, but there are likely to be sizeable costs in getting people into work. The use of private-sector capital is being examined.
Fourthly, changes to the benefit system to create the right incentives. This covers the transition from benefits to tax credits, but is very much a matter for the Treasury and the Chancellor.
The implications are wideranging: for rights to benefit; for the role of the private and voluntary sectors as providers (also a David Cameron theme); and for the broader fiscal outlook as we try to raise the number of people in work to support a growing retired population. This is part of what David Willetts, the Conservative education spokesman, has highlighted as the politics of balancing the rights and interests of different generations.
Peter Riddell has been a leading political commentator and an Assistant Editor for The Times since 1991. He writes mainly, but not exclusively, about British politics and has published several books on British politics, including not one, but two, on Margaret Thatcher
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I have been on incapacity benefit for 5 years due to depression that started in my early twentys. I have always worked but my self confidence and motivation has all gone .
I was amazed how little help my jobcentre gave me for a start they have only one incapacity benefit advisor and offer me no help at all exept putting me touch with mental health charitys. I am a fully skilled motor mechanic and there is a big skills shortage of mechanics in cheltenham. With help iam sure i could work again but i feel Labour has just left me to rot .
Dave , cheltenham, uk
So was Enoch Powell right? Everyone appears to be getting sorted out in this country apart from the born and bred British.
If you travel to the Middle East particularly the likes of Kuwait and the UAE they have Kuwaitiaztion programs and Emeratization programs. Why? Because they are trying to get there own people off their backsides and into work. So what do the British do open the doors to the world give away the work and watch their own people rot. Well done Tony! How long will it be before we have to have Britishization programs to get our people back to work?
No I'm not a NF or BNP supporter BUT I do believe like the arabs do that in our country our own people, irrespective of race creed or colour, should come first, and if you break that PC crust that covers 'middle england' thousands of others do too.
Keith, Newcastle,
We are in the same position as J Griffiths Manchester and I agree with every word he says. It is easier to get a job if you are an immigrant than it is if you are over fifty and paid your taxes all your life. I'd love to be able to get in touch with him and any one else in that position actually. However, I would like to add that any jobs that this Government now wants to create will be the same as the last lot that they created at a level of poverty that is not deserved. I feel sorry for youngsters and everyone else in the minimum wage workforce nowadays and the minimum wage isn't going to benefit single mothers or their children. Unless these jobs are worth having they are not going to benefit anyone just as the last lot didn't.
judy, liverpool, england
New Labour recruited Frank Fields to "Think the unthinkable" but jolly soon sacked him when they realised his solution would lose them votes.
Now the country is awash with willing immigrant workers they will now face an impossible task in persuading people to come off the comfortable existence they have grown accustomed to.
A.B Parkinson, Barrow, Cumbria
I agree with Peter Bolt. I've paid NI for over 30 years, and been made redundant twice. Each time I stood on my own two feet whilst looking for work, rather than claiming benefits immediately, so I have 2 brief gaps in my contributions. These, plus my savings, are enough to disqualify me for any jobseeker's allowance whatsoever. Tomorrow I have an interview with a civil servant who's probably not applied for a job in years, who will explain to me how to find work. Each time I attend the jobcentre to jump through hoops for my stamp, I see 'single' parents and recent immigrants, all claiming benefits for themselves and their dependants.
I'm an ex IT professional, but I've reluctantly given up hope of getting back into IT. I'm over 50, so apparently I'm a less desirable employee than some kid who doesn't even know the meaning of the phrase 'work ethic'. And a brief look at the job ads should convince anyone that there aren't many proper jobs with decent pay anymore.
j griffiths, manchester, england
We have lost the word responsibility and exchanged it for entitled, in the welfare state those unemployed are "entitled" to something to which a number have never contributed much towards, the wealth of the nation.
Having lived for the last 4 years on a dire council estate in manchester, I have regularly encountered the wonders of the welfare state, namely feral children and the dustbin mentality (whereby anywhere is one).
If we can remove the word entitled and enter responsibility we may one day cure the malaise festering in the many sink estates around the country.
William Simpson, Cambridge,
Please send Tony Blair to Montana and he can run for the US Senate. He is sure to be elected. We love him.
Raymond, Seattle, WA> USA
Its all the usual stuff and nonsense. The real issue is low pay and always has been. the jobs weren't created for eastern europeans, they live 10-15 per house thus cutting living costs. They do the jobs that an ordinary Britsh couple or more relevant single person cant take as it would leave them destitute. Tax credits and other benefits are a form of state support to make jobs look attractive when a living wage is not genuinely on offer. Mr. Brown would love us all to live in squalid, overcrowded conditions for £% or so an hour and support his cheap labour economy. Theres the rub. Furthermore I have claimed Incap.Ben. for 2 years now following a serious injury and have had NO help whatsoever from the DWP despite being highly motivated and getting myself re-trained ( via charities) for my eventual return to work. So-called State help is a disgrace, its non existent.All I ever get told is that theres no money available, yet the CSA has just awarded itself a massive incompetence bonus.
Mick Roberts, Warrington,
Lone parents, a check needs to be done on how alone they are.
I also have a friend who has a business where employees have asked for their hours to be cut so that they could claim low income benefit. Nice one Mr Brown, you encouraged people not to work.
Regards
Dave Madley, Alicante, Spain
What we need is a review of everyone on benefit, years ago people had to queue up at the "dole" counter to collect money, a few were hived of for screening and maybe offered jobs. It is now too easy to claim benefit, get your money paid into the bank and work on the side. The government has made a rod for it's own back. I know people who are fit and claiming disability benefit. One of them was encouraged to claim it during Thatchers term and has been on it since finding it easier than working. He did not initially want to go on benefit. Give people a bounty for advising the DWP of possible cheats and see what happens.
The other problem is over qualifying jobs, "degrees for nurses" what nonsense and many more like it.
regards
Dave Madley, Alicante, Spain
Inteligent and capable young people, though not the academic elite, used to get jobs on leaving school at 16 or 18. Now that type of person invariably has to go through some form of higher or further education, saddling them with big debts, and taking the most productive teenagers and young adults out of the economy.
Malcolm McLean, Bradford, UK
I would go as far as to say that for the first time ever in our Social History children have become a major source of income for families more accurately described as "undeserving".
Peter Bolt, Redditch, UK
The repercussions are wider. The possibility is that a good proportion of the people who have come from Abroad to take jobs here will actually stay on so the knock-on effect will be on our children. It must seem so attractive to have this call on the world pool of employment and skills but it boils down to the fact that whatever skills or qualifications our children manage to amass will be quite useless against the background of pay competition allied to expectation. It is so unfair when a government raises the life expectancy of its people, the general conditions and expectations, only to then seek to constrain aspiration through a jobs market that will invariably look to cost benefit. If you have a house and family and are established in a community then the calls on your income are bound to be higher as opposed to one who lives in a suitcase and whose work location is incidental as they have no ties. Ability then becomes a rather different animal, militates against stability.
Malcolm Turner, Alsager, England
Britons are without jobs simply because many of them will not work for the lousy pay and in the crappy working conditions that cash-starved immigrants from the new EU are quite content to live with. Given a choice of a) welfare benefit b) similarly paid physical work, only a complete idiot would chose b), whereas folks from C&EEU are still happy with the 2x wage difference compared to what they would be earning at home for the same kind of work (the question, though, is for how much longer).
marcin, Warsaw, Poland
The Government seems obsessed with sending everybody to university to get a degree. Those with a degree, however worthless, do not want jobs that they then see as beneath them (in the service industry, manual jobs etc). Many on benefit receive more than those that work to support themselves and their families. Because of this there are thousands of vacancies that the 'graduates' and workshy do not want. Fortunately there are some people that want to do these jobs, they are just from a foreign country.
David Leslie, Perth, Scotland
I retired from UK management on a pension 22 years ago and have been working ever since in the Middle East and Asia. I have always protested that I could find no work in the UK after the age of 50, but my friends tell me that I did not look hard enough - but as far as I could see there was no financial incentive to return home at all. It is of course quite possible that I am out-of-date and incompetent, but I suspect that there is a social disconnect somewhere in the UK system where competent managers, engineers and scientists are deliberately retired early and then excluded from posts where their experience would be useful. One problem is that many good managers argue too much, find it difficult to implement illogical political decisions and are excluded from managing the civil service. The question is whether the UK is using our educated resources wisely. I think not!
Brian Lewis, Manila, Philippines