The Taxpayers Alliance has caught the headlines today, with its proposal on 'Work for the Dole'. And they are right that we do have a growing problem of far too many people stuck on benefit for far too long. To tackle the living standards crisis and bring down the social security bill, we need to get the long-term unemployed back to work.
And, as the Taxpayers' Alliance report points out, the government's Work Programme has not delivered. Introduced in June 2011, it is designed to tackle long term unemployment, but long term unemployment has continued to rise. It is now at the highest level since 1996. The programme made a faltering start, and data on its first two years were published in the summer. It missed all three of the minimum performance standards set for it.
But our solution is different to the one proposed by the Taxpayers' Alliance. Labour is committed to introducing a Jobs Guarantee, funded by a bankers' bonus tax and restricting pension tax relief for those on the highest incomes.
Our offer will be this. We will guarantee a choice of job offers to two groups of people:
- 18-24 year olds who have been in receipt of Jobseekers Allowance for a year; 28,000 people were in this position at the time of the General Election - now, over 70,000 are;
- Over 25s who have been in receipt of Jobseekers Allowance for over two years; there were some 40,000 people in this position at the election; now its 180,000, and the figure has almost doubled in the past year.
The jobs will last for at least six months, be for at least 25 hours per week - with the balance of the week being available for supported job search - and be paid at least at the rate of the national minimum wage. As in the current Jobs Growth Wales initiative, most of the jobs provided will be in the private sector. We will also pay the full wage costs for posts in local authorities or charities to ensure that there are sufficient jobs to deliver the guarantee. In some cases, there will be an alternative offer of a training place.
Once the offers have been made to a jobseeker, that person's Jobseekers Allowance will stop for six months - and hopefully for longer. Our view is that unemployed people are entitled to the opportunity to work, and we will ensure that that opportunity is provided to them, but that - once it has been - they have the responsibility to take it up.
We have been working with the Work Programme providers' trade body, ERSA, to assess what the guarantee will mean for the replacement for the Work Programme, which will need to be up and running in early 2016. For example, the new programme will only run for 12 months - or six months in the case of young people - instead of two years, because the guarantee will then kick in. We also want to see a programme running in smaller geographical areas than the Work Programme has done. That way, we will be able to deliver co-operation with local authorities; bring in skills funding to help; re-engage excellent voluntary sector organisations which have been squeezed out by the Work Programme; and reduce confusion for employers.
We will also scrap the secrecy which has bedevilled Tory programmes, and end the absurd ban imposed by the coalition government on providers publishing any information on their own performance.
Our Jobs Guarantee plan is based on the success of Labour's Future Jobs Fund. It reduced youth unemployment in the teeth of the recession before the 2010 election. During the 2010 election campaign, the Tories were asked what they would do about the Future Jobs Fund. They said they would evaluate it first and then decide its future. It was one of their earliest broken promises - they scrapped the fund as soon as they got into Government. But the evaluation went ahead anyway, and it was published late last year. Its on the DWP website, and it confirms what a great job it did. It calculates, for example, that, of the gross cost of the scheme, over half came back to the Exchequer in additional tax and national insurance and reduced benefit payments.
The Taxpayers' Alliance is right about one thing - Tory programmes aren't working. They are out of touch. Its time for a new approach. Getting people back to work will, for Labour, be a top priority, raising living standards and bringing down the social security bill. And our Jobs Guarantee will be the key to doing it.
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