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Labour revisits old welfare ghosts with its jobs guarantee

4 January 2013

Dig out the bunting, fly the red flags in celebration, for finally we have a policy from the Labour party. Ed Miliband promised that 2013 would be the year he’d set out some ‘concrete steps‘ on key policy areas, and to that end he’s announced a jobs guarantee for the long-term unemployed.

Coffee House readers will already be familiar with this scheme, as Shadow Work and Pensions Secretary Liam Byrne discussed it in his interview on this site in December. But Miliband and Ed Balls have given the details today, with Balls writing an op-ed for PoliticsHome that says:

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 or buts.

Balls says that this scheme will drive down the welfare bill far more successfully than the 1 per cent cap on rises in benefit payments. But the plan has the power to annoy not just those on the right who will be unhappy that the funding source is a cut in tax relief on pension contributions for those earning over £150,000 from 50p to 20p, but also those on the left. Some in the Labour party will not take kindly to the idea that a claimant’s benefits will be stopped if they refused to take up the job offer: already Owen Jones has claimed the policy will ‘fuel idea long-term unemployed… are out of work because lazy’. Liam Byrne is more attuned than many in his party for the need for Labour to appear tough on welfare, though: and a job paid for by government isn’t exactly the cruellest of policies (regardless of whether raiding pensions yet again for a state-sponsored job which only lasts six months is a good way of managing the economy or indeed of driving down long-term unemployment).

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The funny thing is that this is precisely the sort of policy that James Purnell tried back when Labour was in government, only to get shot down by the powers that be. Labour is slowly catching up the ideas its more progressive figures were considering pre-2010.

P.S. It’s interesting that Balls attacks Tories for calling welfare claimants ‘scroungers’ in his PolHome piece. While George Osborne and Grant Shapps have angered Iain Duncan Smith with their imagery about benefit claimants dozing behind closed curtains and loafing on the sofa, it’s very difficult to find an instance where a Tory has actually used the unpleasant word ‘scrounger’. The only examples I can find in Hansard are Harriet Harman ticking off MPs on the other side of the Chamber for the use of the word (such as here and here, and here’s Glenda Jackson and John McDonnell making the same claim again) , which they then deny. And whenever ‘scrounger’ does pop up in a news report about Government policy, it appears to be a word added by a sub-editor, rather than a verbatim quote from a speech. Perhaps I’ve missed a big speech on ‘scroungers’ from a top Tory and CoffeeHousers can enlighten me on where it is that Tories have been calling benefit claimants scroungers?

UPDATE: One lead so far on the ‘scrounger’ hunt: Peter Lilley’s 1992 ‘little list’ speech. David Evans, then MP for Welwyn Hatfield, also used the word in the same year in a Commons debate.

And disappointingly, Cameron used it, too, in an interview with The Times in 2010, where he said: ‘There is no way of dealing with an 11% budget deficit just by hitting either the rich or the welfare scrounger.’ Many thanks to George Eaton for spotting that.

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Show comments
  • Brian Lovett

    Nothing new in any of this stuff. Six months on the dole then pressure to find work, six months in an adult training scheme or education. Placement in voluntary work and an extra £15 a week… Regular medical exams to establish work capability. Its been in place since the 80s and earlier. The only thing that has changed is the social malice and the demonisation of poor people.

  • Anthony Makara

    The Labour proposals are similar to ideas that I put forward several years ago, and are in theory, a step in the right direction. It is good that Labour have floated the idea of providing a guarantee of waged work, and have qualified that in stating that any such offer must be taken up. Such a scheme should have been built into the benefits system thirty years ago as a response long-term unemployment. The old Community Programme scheme of the Thatcher era was an attempt to tackle the problem but it failed because it lacked ambition and was not mandatory. Long-term unemployment can only be tackled through direct work experience and on-job training and it is proper that it should be fully waged. The failure of Labour’s ‘New Deal’ and the current government’s stuttering ‘Work Programme’ calls for a more radical approach. The work guarantee should act as the safety net that ends continual long-term unemployment and offers a genuine hands-on opportunity to retrain. The current government, rather than scoffing at Labour’s suggestion, should support cross-party consensus on this issue and set up a similar scheme before the next election.

    I add a link to my CH piece on this matter below:

  • David B

    I note the hit is to be on private sector pensions. Why not cap all public sector and political pensions to a maximum of £50K. But both Ed’s would not be so daft to do that to themselves

  • Peter Hearn

    Why doesn’t Labour ever consider reducing the costs of doing business in the UK as a solution to unemployment? Lower employers’ NI contributions would be a good start, followed by the abolition of business rates. That’d give the small shop in the High Street a fighting chance for starters.

    Government sponsored jobs (or more accurately, high-earner sponsored jobs) will do nothing to ease the plight of the long-term unemployed. Their problems are often deep-seated, but an economy which is hoovering up all available spare labour gives little excuse for anyone other than the genuinely sick to avoid working for a living.

    At that point, it’s fairly easy to cut welfare down to size.

    • David B

      Why because it would reduce the size of the state and just like Sir Humphery they will never reduce the size of the state. After all less civil servants means less union members which means less political levies!

  • Noa

    So, no addressing the fundamental problems of increasing debt, mass immigration and open borders. Just the same old class warfare as Labour kicks the cans down the road to oh.. 2020?

    Sadly this intellectually bankrupt rubbish will suffice for their moronic voter base, represented so ably by the pre-pubescents, Owen and Purnell.

  • Andy

    Typical Labour Party cobblers. They have zero understanding of economics and even less understanding of human nature.


    Isabel, another piece on unemployment where you fail to mention immigration as a cause.

    • George_Arseborne

      Where were the British or so called English when the Romans immigrants developed this Island that you are Enjoying today. Fascist like you should go to hell. Take note you are an immigrant as well

      • Noa

        If you hadn’t written this noxious and untrue comment we would not have had the demonstrable proof that you are an ignorant marxist bigot.

        • George_Arseborne

          I will not blame you for being Ignorant about the history of this nation. Take GCSE History. It will be refreshing and clears you from ignorance mate

          • Noa

            Regrettably it appears that little can be done about either your profound historical ignorance, your basic illiteracy or your inability to express your derived opinions in an objective manner even approaching originality.

          • Colonel Mustard

            And I will not blame you for being ignorant of the language of this nation when lecturing us about its history or for your insulting the indigenous people as “so called English” – we are English and have been for about eleven hundred years. Besides, you provide a useful demonstration of the true meaning of New Labour’s electoral gambit.

            PS I am not really “enjoying” this Island today.

      • Fergus Pickering

        What are you talking about arseborne? We’re talking about people from countries of inferior civilisation who came here in the last five minutes. I don’t think the Romans fit the bill. Oh, and stop using fascist as an all-purpose insult for people who do not agree with you, you horrible paedophile rapist.

        • George_Arseborne

          Your last sentence is a typical description of who you are Mr. Prickering. I know people like you and Noa a.k.a. Ark are annoyed with this piece of history. Go back to siberia where you originate

          • Colonel Mustard

            The most recent studies prove that the Roman invasion made very little difference to the ethnicity of the British people affected by it. Likewise the Anglo-Saxon, Norse and Norman arrivals. Most multi-generational English people (75-95%) have a majority of DNA going back to prehistoric times with from +5% representing Norse influence. The English are indigenous to this Island and any attempt to portray them otherwise is both false and offensive.

            None of those waves of invasion and immigration can be legitimately trotted out as a form of relativist equivalence to the recent stunt pulled by New Labour, which was to deliberately flood the country with immigrants for party political advantage and at the same time to push hard ideological multi-cultural policies which were not a matter of choice or consent by the English.

            • George_Arseborne

              Good research young man. where did the Anglo-Saxon, Norse migrated from? In the history of England , did the Romans make some impact in the development of England? Do some research Boy

              • Colonel Mustard

                I am not a young man and calling me “boy” does not empower you. The reality of your ignorant, semi-literate taunts stand by their own lack of merit. The country continued to be England after those migrations enriched it.

                I’ve done my research. You, however, still need to work on the English language.

          • Noa

            Your version of English ‘history’, besides being a profound lie, is a new labour construct based on marxist racial propaganda, used to promote and justify mass third world immigration and the destruction of a thousand years of cultural and racial unity.
            You may take great satisfaction from that and the future inter-ethnic and racial wars that will be its inevitable consequence.
            I do not.

  • andagain

    Balls says that this scheme will drive down the welfare bill far more
    successfully than the 1 per cent cap on rises in benefit payments.

    Then why does it need funding?

    • Dimoto

      Balls is yet another Oxford PPE grad.
      The laws of thermodynamics are an alien planet to him.

  • HooksLaw

    You may be disappointed with Cameron using the word scrounger, but in the context he is just quoting it as it is commonly referred to and was pointing out that public sector numbers and pay would have to be restricted.

    ‘Scrounging’ means getting something with no intention of repaying and in the context of benefits there is indeed a group of people who play or indeed cheat the system to ensure they subsist quite happily.

    Ball’s alleged policy is not the first time labour have pretended they mean this particular kind of business. It does not fool me.
    The big lie of course is Balls’ reference to One Nation.

    • Wessex Man

      why do you always seek to lecture us as if we were children? To Cameron anyone outside of his elite are either scroungers, plebs or drones to pay taxes to keep him in the manner to which he has grown accustomed.

  • Hobbes

    The level of spin surrounding the welfare budget and associated salary subsidy by government is absolutely unreal. Case in point – Headline states benefits rise 20% over 5 years compared to 12% salary increase. What this doesn’t tell you is that in absolute terms a 20% rise in JSA is the princely sum of ~8 pounds a week. Nor when they discuss the “balooning” benefit bill do they mention the -vast- majority of the funds are going out in the State Pension, if memory serves the pension uses up a higher proportion of the budget than every in AND out of work benefit combined.

    Then there’s the tax credits, a means of socialising paying low wage low skilled workers whilst at the same time privatising the fruits of that labour market (namely company profits).

    None of it works. None of it. A truly radical solution would be to pay everyone, regardless of earnings or status a subsistence sum (which is then subject to tax as per the usual NI/IT contributions), ditch the -entirety- of the DWP *and* the Tax Credit system, and raise the personal allowance to £15,000. The combined savings from not chasing the utterly trivial numbers of “scroungers” and not persecuting genuine jobseekers, as well as removing subsidy for the low paid (and resultant market correction in salary) would solve the bulk of the problem in one stroke.

    • Geoff103

      This is a concept called CBI – Citizen’s Basic Income. Theoretically it has great merit but as soon as the media, politicians on the left and plenty of other people in the commentariat discovered it meant paying it to *everyone* including, horror of horrors, millionaires, middle-class high earners, everyone earning over, say, £50k a year etc there’d be calls to means test it and we’d back somewhere very similar to where we are now.

      And that’s even before we understand the costs involved or agree a level for CBI.

      • Hobbes

        As far as costs involved go, that would largely depend on the complexity. There’s a very good argument for scrapping means testing on various benefits (as is being done with the pension), largely because the money saved on administration feeds into a potentially more stable and more useful benefit level.

        In regards to millionaires and so recieving it, I make a point of saying it goes inside the taxation system, so for someone on the top levels of income tax they’ll only be getting a fraction of it (if we wanted to go the whole hog we could set an arbitrary cutoff threshold of say 250k p/a, at which point your CBI is removed).

        There are some key arguments which go heavily in favour of CBI if you consider that as we move to ever more efficient levels of industrialisation and possible autonomation of low skilled work, there’s going to become an “ingrained” level of unemployment, that is to say there’s quite simply not going to be enough jobs globally, and the jobs that remain will become increasingly specialised. Accepting that unemployment is no longer a stigma but a functioning part of the economy would probably pave the way for a much more efficient and sustainable benefit system.

        Additionally the state pension could be folded into the CBI so what you’d have is a single system of sustenance income, possibly with an age and/or disability premium for the vulnerable and the elderly, you’d wind up with something that doesn’t waste untold billions in administration and checking and error correction and what not.

        As for the level per week, enough to ensure an acceptable, albeit basic standard of living, something to bear in mind is that a lot of the money going out in CBI would be put back into the economy through various forms, so it’s not like money going into the ether (and if cutoff was set at 250k earnings, that removes the people who would most likely simply hive it away in savings).

        • Geoff103

          Once you put a ceiling on who may receive a CBI, you’ve conceded the principle.

          As I said it’s a fine, theoretical idea. But it simply won’t work while so many people are motivated by envy and some by spite.

          As soon as you define the ceiling, then there’ll be agitation not to uprate with inflation as time passes. In a year of financial crisis, there’ll be calls to reduce it.

          Then, there’ll be all the cries of faux outrage from those on minimum wage complaining that the chap working next door on twice the wage gets the same CBI and so on and so on. All encouraged by every passing politician (especially those of the Left) who will be unable to resist climbing on the band wagon in support of ‘hard working families’ against high earners who don’t ‘deserve’ or ‘need it’.

          We already see this with universal benefits in the guise of winter fuel payments and bus passes, etc for pensioners – all of which are not really benefits dependent on circumstance but the return for years of NI contributions made because the system can’t or won’t pay a proper State Pension to obviate the need for these little ‘extras’.

          We’re in the middle of another argument about the ceiling imposed for Child Benefit, another universal benefit that might be considered a proxy for a CBI to the young.

          This ‘outrage’ is seen most vividly and speciously with what is termed ‘Mick Jagger’s Bus Pass’ on the grounds that he and his ilk are so wealthy they don’t need one. Well of course, they don’t but you can bet your bottom dollar that they don’t use it either so what’s the point of stripping it away?

          No. Great idea. Unworkable in a State where the people vote and can be driven by populist anger.

          • Hobbes

            Unfortunately I’m inclined to agree. It’s not so much the fact of the vote, it’s that the vote currently is swayed by who has the best soundbite. Our politicians, starting with New Labour have entered an era where it’s all style and little substance, and we the populace pay for it.

            • Geoff103

              So, we share our realism or, as the unkind would say, cynicism.

  • Chris lancashire

    More, much more of this from Miliband/Balls please. Absolute tripe that nobody believes –
    1. Governments don’t create sustainable wealth creating long term jobs.
    2. Many believe (myself included) that a majority of long term unemployed don’t want a job.
    3. Absolutely nobody believes that a Labour Government would take benefits off anybody – whatever they did or didn’t do.
    4. Instead of using any money generated from reduced pension tax relief (seems reasonable to me) on useless make-work schemes how about reducing Labour’s defecit?

  • Magnolia

    The definition of a scrounger is a person who borrows from or lives off others.
    Surely we are all scroungers because the country’s debt keeps rising ever upwards?
    Will Labour tell us how they plan to reduce Britain’s scrounging in the round?

    • HooksLaw

      We pay interest on our nations borrowings so are not ‘scroungers’

      • Magnolia

        I think you are confusing scrounging with sponging.
        As long as we have a balance of payments problem, then we are relying on others for our standard of living as a country.
        We are living off the bond markets largess.

      • Noa

        Creditors call in the markers, eventually. Or they go bankrupt.

        Which do you think will happen?

  • Colonel Mustard

    Will “New” New Labour’s ‘one nation’ approach to welfare reform mean the same thing as “Old” New Labour’s ‘one nation’ approach to devolution? I mean will it allow the Scots, Irish and Welsh to opt out of any benefits reform they think is too irksome for them whilst allowing the ‘one nation’ government to force it down unrepresented English throats, for their own good and whether they like it or not – as with tuition fees, prescription charges and hospital parking?

    • Colonel Mustard

      Of course I meant ‘one nation’ tuition fees, prescription charges and hospital parking, as in ‘one nation’ equality and fairness.

  • Dominic Allkins

    Sometimes, I’m afraid, it is necessary to call a spade a spade; not a piece of earth moving apparatus.

    Many of those on long-term benefits are scroungers. Not all, but a significant proportion.

    Welfare should never, ever, be a replacement for work. It should be a short-term safety net. That’s it.

    • treborc

      sadly you need real jobs not a 25 hour work experience for six months and then back to the JSA.

      Of course the fact is you need to get the people who want to work and the young into work then you can deal with the rest.

      But now we are hearing labour will not put i this into it’s agenda or manifesto, so is this just the start of the politics frenzy before the next election.

      I’m sorry but I lost the use of my legs a few years ago after an accident and I’ve been seeking work now for years, labour or the Tories do not know what to do with me except cut and more cuts, find me a job.

      • Dominic Allkins

        Hi treborc

        Firstly I’m sorry to hear that about your accident and it’s impact on your life. It must have been (and I imagine probably still is) horrendous for you. You certainly do not fall into the ‘Scrounger’ category. From what you’ve said I can only draw the conclusion that you would much rather be in work than on benefits – but that at least the benefits are the safety net they should be.

        I hope that you find a job. I have no idea about your skills or knowledge but have you tried learning programming skills. With a good brain and common sense going that route and becoming self-employed may be the route. Just a thought. At least you wouldn’t be reliant on the useless politicians.

        Regarding you other points, you are right a six month 25hr work experience is not what is needed. It wouldn’t suit most employers looking for people with skills and getting what is essentially a bung from government to take on someone without skills won’t make that much difference. As an employer I’d rather pay for someone with the skills.

        You’re also bang on about getting people who want to work sorted first. At the low end of the payscale though this policy won’t make any difference because of the high marginal taxes faced by those just getting back into work. If you’re going to give the money to anyone, give it directly to people who make an effort themselves to get a job to help them through the higher marginal taxes.

        Better still though is to stop taking money out of the economy in the form of yet more taxes. Leave it in the pockets of those who will spend it more prudently than the Government and the economy will grow. We’re beyond the peak of the Laffer Curve now and any further taxes are just a drag on the economy.

        I hope things work out for treborc. I genuinely do.

  • Guest

    Surely it’s not specifically the word scrounger; as you say George Osborne’s Autumn Statement comments imply “scrounging” without using that particular word? They absolutely do imply that people are scrounging imo

  • Archimedes

    Why would an employer choose to employ someone on the minimum wage, when they can have the government pay for someone to work for them on the minimum wage? So, over the course of a natural cycle, wouldn’t this create a great deal more long term unemployed individuals? Not only increasing the state employment subsidy, but also increasing the welfare bill by ensuring that those unemployed individuals looking for low skilled work are unable to get it, because it’s substantially cheaper for an employer to get a low skilled individual on loan from the state.

    Oh, and that’s the best case scenario, because the alternative is that it doesn’t work.

  • chan chan

    I wish Owen Jones was unemployed, I really do. The country would be much better off.

    • Kyoto

      He is unemployed. Just on a better benefits package than most.

      • chan chan

        Ah, indeed…

  • chan chan

    Absurd beyond belief. Don’t these commies ever learn? Of course not, that would be too easy…

    • treborc

      If they were commies I’d understand it , these morons are supposed to be socialist, sadly this lot we have today would not know how to work them selves.

  • lee taylor

    More non-jobs to fix the unemployment figures.
    Any spare cash should be spent on imploving skills with better training and education through better trained and educated teachers and more on the job appentices.

    • Dimoto

      No, more client votes. They think.

      Of the (say) 2.6M unemployed, Many are “late middle-aged” and not too interested, another cohort are content with the “benefits lifestyle” and a job is the last thing they want, and another cohort are normal people between jobs who won’t want a “government guarantee job” (stigma attached).
      That leaves the usual Labour drones looking for a cover for their non-jobs, and a few hundred thousand near unemployable victims of the education establishment. And unemployment is still falling.
      More tosh really, isn’t it ?

      And Ms Hardman, don’t try too hard seeking a Tory quote on “scroungers”, they may avoid it like the plague, but it is common parlance amongst the (non-Westminster) rest of the population.

  • McRobbie

    Wonder what jobs balls will hand out, maybe he’ll take some employed and make them unemployed to free up some posts? He wouldn’t create non jobs would he? That’s just not the left wing way!

  • LB

    Just wait until people discover funding welfare claimants means they don’t get their state pension.

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