Category Archives: Labour’s future
Youth unemployment has hovered around the million mark for nearly two years. The cost to our young people and our wider society is huge. ACEVO has estimated that the full cost of youth unemployment to the Exchequer is £2.9 billion a year; the cost to the wider economy through lost economic output is around £6.3 billion a year.
Government policy does not seem to be helping. The flagship Work Programme did not meet its minimum performance levels for getting young people into sustained work. The Youth Contract is considered to be ineffective: a recent survey by the Recruitment and Employers’ Confederation has found that none of its 200 respondents had made use of the Youth Contract wage subsidies.
But there are a growing number of businesses, councils and third sector organisations that are doing good work on youth unemployment at the local level. This is why Labour created the Youth Jobs Taskforce. The Taskforce brings together experts from business, enterprise, the third sector, academia, trade unions and leaders of the ten Labour local authorities with the highest youth unemployment rates in the country to work together to share best practice and create a policy framework to bring down youth unemployment.
Any youth employment strategy must understand what employers want from young people, as well as to understand what business can do to help resolve our youth unemployment crisis. This is why we have spoken to businesses and employer organisations across the country. These groups have included: the Confederation of British Industry, the British Chambers of Commerce, the Federation of Small Business, The Chartered Institute of Personnel and Development, the UK Commission of Education and Skills, Business in the Community, the Employers Education Task Force and the EEF.
This work complements other work being done by the Shadow Business and Education teams. The Skills Taskforce, led by Chris Husbands, is currently gathering views on vocational education and skills1. The Small Business Taskforce has also reviewed challenges facing small businesses2. Our work should also be viewed against the backdrop of Labour’s work on an industrial strategy that improves the supply of good jobs as well as the supply of skilled workers.
In this report, we summarise the business perspective on the current system of matching young people to jobs, whether through the education system or through back to work programmes. This report summarises what we have heard. The overwhelming conclusion is that the current system of matching young people to jobs does not work, discussed in the
first section below. But we have heard many impressive stories of businesses working directly with the community to fight youth unemployment. In the second section we draw on some examples to discuss what business can do now. The third section brings together suggestions from business for future policy: these include greater focus on vocational education, careers advice, and simpler national programmes.
Labour’s Youth Jobs Taskforce is convinced that any effective policy discussion must bring business on board. The final section sets out questions on what direction policy should take. We are keen to hear your thoughts on how we can build on the policy themes we have identified.
One in ten now can’t find the hours they need because this government has failed to get Britain moving
Liam Byrne MP, Labour’s Shadow Work and Pensions Secretary, commenting on today’s ONS report on underemployed workers in 2012, said:
“This government is creating a short-time Britain, just when we need all hands on deck. One in ten now can’t find the hours they need because this government has failed to get Britain moving.
“Millions are locked out of full-time work because the Work Programme is failing and George Osborne has throttled the recovery. Now we have a spiralling welfare bill that Britain’s strivers are having to pick up the tab for.”
- · Today’s ONS reports shows 10.5% of the workforce was underemployed in 2012.http://www.ons.gov.uk/ons/rel/mro/news-release/underemployed-workers-up-1-million-since-onset-of-downturn/underemp1112.html
- · The number of underemployed people has increased by 300,000 since 2010 (11% increase).
LIAM BYRNE – Welfare reform
Tuesday, 2nd October 2012
Speakers: Liam Byrne
ED: How typical are those views [that a large proportion of people claiming benefits are scroungers]?
LB: I think those views are quite widespread.
ED: Is that a problem for you in framing a policy? Have you lost.. has the system lost legitimacy?
LB: I think the truth is that social security today doesn’t enjoy widespread support but for many people, nor does it offer much security and those two things are linked. The truth is that the world of work has now changed very radically since social security was set up back in the 1940s and for many people in work they don’t actually feel that they get much out for the pressures that they have to contend with in everyday life so I think that fractures support and I think that’s why we do have to reinvent social security for modern times and the world of work today.
ED: Let’s take a couple of things that the coalition has done to try and, if you like, deal with some of those attitudes and let’s start with the tests, quite controversial tests for disability. Now there has always been, as I understand it, there has always been some kind of test to determine whether you are eligible forDLA; you can’t just walk in and say could I have it please, you have to get some sort of certification to do so. but there seems to have been a toughening up of those tests – do you support that?
LB: Well if you [inaudible] the position we started back in the 1980s when millions of people had been put on incapacity benefit when the manufacturing industry in this country went through those difficult times and what Labour did in office is say look, there does have to be a test introduced so we are not just looking at people’s disability we are looking at people’s ability. And when we introduced the test we said look, this is a new system, it’s going to be complicated, things are going to go wrong, we shall review it every year and make changes. So the principle of the test is absolutely right but the truth is that what is happening right now is just arranging a bureaucracy against disabled people – it is not putting a team behind them to help them get back into work. And that is why I have called for fast and fundamental reform of the test because the principle of the test is right but this is about making sure people get the right support, and crucially it is about supporting people getting back into a job where they can be playing in tax, not sitting out of work taking out benefit.
ED: Right, so it is the way they are doing it rather than the principle that you are opposed to then. What about the benefit cap. Interestingly when I spoke to those folks in Collyhurst they seemed to have no problem wit the cap at all. I know a lot of experts in this area feel the cap had a some what clunky, clumsy method of trying to restrain benefits spending, what is your view?
LB: My starting point is you have got to be better off in work, I mean that is why we supported tax credits and that is why we opposed the cuts I tax credit that means many people are actually now better off on benefits than they are in work. But the flipside of that is that there should be a cap on benefits and a bone of contention with the argument is that they have, in a clumsy and pretty politicised way, tried to set one national cap for the country whereas everybody knows that one cap for the whole of Britain would be pumped up by the very very high levels of rent and housing benefit that you see in London. So, we have said look come one, think about this carefully – it would make much more sense to have a different cap in different parts of the country and let’s try and take the politics out of that a bit. Let’s get an independent panel of wise experts who can look at this and say, what is the right level in different parts of the country so that no matter where you live you are better off in work?
ED: So again you are saying, support the principle but you will do it a different way?
ED: Have you got any ideas of your own about reforming welfare? We know Iain Duncan Smith has got a universal benefit – he is replacing a lot of the means tested benefit with this single universal credit. You have said you think the system should be somehow aimed at getting people into work – I don’t see any disagreement there with the Conservatives, the Conservatives want to get people into work as well, the coalition is clearly aiming at trying to get people into work – what are your bug ideas for welfare? Where do you take it, what do you d with it now in the 21stcentury?
LB: Well we have got to recognise that the world of work is now very very different to when the system was set up back in the ‘40s. So half of jobs inBritain today are either part-time, temporary or self-employed. Now to help people work in this more flexible life we have got to do things differently. The job-for-life has gone, women are now at work, we sold off lots of council houses and of course we are ageing. That means people need different things out of social security and that’s why we have said look, we have got to have a much bigger push to get young people into work – that’s why we have said there should be a bank bonus tax to focus on getting young people into jobs, and by the way if young people aren’t prepared to take those jobs there can’t be a life on benefits. Second we have said look, there has got to be new investment in areas like childcare because if we had as many people, as many mothers in particular, in work as they have for example inDenmark we would have a million more women in jobs and £4.5 billion in extra tax receipts each year. And I guess the final area that I’d sort of pick out is that we need to be much better organised in helping disabled people get back into work. One in four, one in five of our fellow citizens is disabled and in a world where things are becoming much more competitive we need to draw on every ounce of talent in our society so we need to be thinking much smarter about how we set the system up to help disabled people work.
ED: Okay, I hear you have got a few ideas there, perfectly arguable ideas, not terribly controversial I wouldn’t have thought, getting young people back into work and get helping women get into the labour market, I don’t think anyone is going to disagree with that.
LB: Well you say it is beyond argument but in fact it isn’t. I mean there isn’t much money going in to help young people get into jobs. There is a lot of new childcare has been cut.
ED: Right well we’ve got the phrase said, there isn’t much money going into it – ah that’s because there isn’t much money going into anything at the moment. My sort of final question to you is, do you accept that this is an area where, after five years, money needs to be found, to be saved or do you think this is an area where you can reform by putting more money in because that is the essence of it isn’t it?
LB: I work on the assumption that we are going to inherit a dog’s breakfast in 2015. The national debt is going to be over £400 billion higher than it was at the last parliament. Savings are going to have to be made and I think there will be savings that are needed on welfare spending too and our challenge is how we spend that money differently to support more people in work.
ED: Give us, just finally, give us a clue as to one saving, one area where you think the big savings can be made?
LB: Well I think you have got to bring down the unemployment bill and you have got to bring down the housing benefit bill. The best way to do that is to get people into jobs.
ED: Right, and apart from getting people in to jobs because of course everybody would like that, they would like a big portion of motherhood and apple pie, if that doesn’t turn out to be easy, one last.. one area of saving? Middle class benefits, winter fuel allowance…
LB: Well there has always been a balance in the welfare state between universal benefits and targeted benefits and I’m afraid as part of Ed’s zero-based review that balance has got to be looked at. But the chief focus has got to be on getting as many people into jobs as possible – that’s good for living standards, it’s good for growth and it’s good for tax.
Monday 1st October 2012
Liam Byrne’s speech to Labour Party Annual Conference 2012
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Liam Byrne MP, Labour’s Shadow Secretary of State for Work and Pensions, said today at Labour Party Annual Conference 2012, delivered live via Skype from a Jobs Summit at Manchester College:
Conference, let me apologise for not being with you in the hall right now.
But sometimes you have to strike a balance between argument and action – and when it comes to youth unemployment what we need right now is action.
So I’m here with Tony Lloyd at the fantastic Manchester College.
Where we’ve brought employers, colleges, business with apprenticeships, and hundreds of young people to see what we can do to get young people in this city into jobs.
And what I’ve heard this morning is just wrong.
It’s wrong that young women like Nazish have been out of work six months, desperate for a job or apprenticeship.
It’s wrong that young men like Colm who’s 23 have been out of work since July.
This is the economics of the madhouse.
You know our welfare is rising by £29 billion
And yet people like Colm and Nazish and a million others just like them and hungry to work and are forced to stand idle.
Now as some of you know, I represent the constituency in Britain where youth unemployment is highest.
What I’ve realised is that the anger we feel about youth unemployment is the anger we feel when we see our values under attack.
We believe in the pride and dignity of work. That’s why we’re called the Labour Party.
We believe that we’re stronger when we pull together as a country. We don’t believe in the economics of you are on your own.
We believe in an economy that works for working people.
And we believe that when you see an injustice, you don’t just walk past it.
You roll up your sleeves and you do something about it.
Today every single one of those values is under attack and it’s our young people paying the price.
So we have to take a stand.
That’s why Labour are calling for a real jobs guarantee – paid for by sensible tax on bankers bonuses.
And, we have to organise the fightback.
We can’t and won’t stand on the sidelines and watch our young people take a kicking.
So today I’m very proud to launch our Youth Jobs Taskforce.
Just because we’re not in government doesn’t mean we can’t make a difference.
We run Wales, and London’s big boroughs and Britain’s big cities.
Right now it’s our councillors and local leaders who leading the charge for youth jobs: thinking, organising, making a difference to get young people work.
Today, these local leaders are coming together in a new coalition to galvanise action.
They are going to join forces with good people from our trade unions, from business, from enterprise, from civil society, and from our youth movement.
We want to make sure that the best ideas anywhere, become the way we do things everywhere.
We know how high the stakes have become.
The young people we serve are good people.
They don’t dress up in white tie and smash up restaurants.
And they don’t swear at policemen.
They are people who want to work hard and get on in life if only someone will let them.
And today we send an emphatic message: that we are on their side.
Let me just finish with a story.
You know Iain Duncan Smith likes to boast that he was once inspired in his reforming zeal to smash up the welfare state by what he saw in Easterhouse in Glasgow’s East End.
Well last week I too went to Easterhouse, together with the great Margaret Curran.
To meet a group of young people to talk about the future.
What they say inspires them, isn’t yet another Tory attack.
It’s investment in skills. In jobs. In chances.
Those young people are just like people we’re here with today.
They’re people who want to rebuild Britain.
And Labour is going to help them.
Because we’re the party that knows how futures are really built.
It’s built by people like those behind me here in Manchester today – and a million more like them all over the United Kingdom.
They might have a do-nothing Government.
But they’re going to have a do-what-it-takes Labour Party.
So thanks for listening.
I’ll let you know how we get on a bit later.
If you’d like to get involved in the taskforce, drop me a line: we’d love to have your help.
And I’ll catch up with you later this afternoon.
My speech to Progress Annual Conference on Saturday 12 May.
Here’s the links to my speeches to Labour party conference this week. First, my speech as chair of the Policy Review on what we’re heard going round the country this last year. The video is here. We’ve also made a short film about the Policy Review. It’s here
Here’s the link to my Progress interview on the new centre-ground which is emerging in British politics. Other the last few months, more and more reports have started to emerge in think-tanks and elsewhere that begin to chart its nature…I’ll post a few links over the next few days
Here’s the link to an excellent new book pulling together some of the debate about blue/new Labour:
Edited by Maurice Glasman, Jonathan Rutherford, Marc Stears and Stuart White.
Forward by Ed Miliband.
The ebook asks some fundamental questions about the condition of the country and the predicament of Labour following its defeat in the May 2010 general election. Out of this work we begin shaping a new story for Labour for the decade ahead.
It was a shame that David Cameron didn’t really join in the debate about rising levels of inequality at Davos – many others did.
The Harvard Business Review has a good summary of the dilemma now vexing business leaders; spiralling inequality may hit growth rates – but how does business balance its obligations to shareholders? The Economist too ran a discussion about how rising levels of inequality are threatening the pace of economic growth around the world.
Ken Rogoff, author of the incredibly good, This Times Its Different summarised the underlying problem well in an interview with Bloomberg;
“Corporate profits are strong, the labor share of income has been falling, it is a global problem’
This, as I’ve argued before, is one of the problems we confront in the UK. Rising productivity, rising rates of return, but a falling share of national income heading into pay packets. As a result, wage growth is flat, and in the face of higher of prices, standards of living are falling.
This week, we heard the problem for the UK is about to get worse. We not only had the shock of a 0.5% fall in economic growth – and we should be careful about reading too much into one quarter’s number – but we also heard the governor of the Bank of England warn that living standards were in the for the biggest squeeze since the 1920s.
It seems the British public didn’t the governor to break to the news to them. The public is well aware that the coalition’s plan to cut the deficit by too much, too soon is bad news for the outlook ahead.
On the 28th January a report by GfK NOP Ltd reported that this month, U.K. consumer confidence plunged the most since 1994 as an increase in sales tax hurt shoppers’ appetite for spending. Bloomberg reported;
The index of sentiment fell 8 points from December to minus 29, the lowest since March 2009, the research group said in a statement in London today.
A report for life insurer Scottish Provident confirmed that more than a third of Brits believe their standard of living is set to decline further.
The growth figures, the governor’s forecasts and the global outlook all underline one point; that if we want to help the squeezed middle, we need a plan for jobs; a Plan B, as my colleague Ed Balls put it so well this week.
A good perspective on why this is just so important came from the Lane Kenworthy commenting on a US debate now gathering steam about how America gets back to full employment.
Here’s Lane Kenworthy in the Boston Review on whether America needs full employment. He argues the US probably could get to good outcomes without it but not rising wages for the squeezed middle:
The post–World War II experiences of the rich democracies suggest three routes to rising working- and middle-class wages. One is an environment in which firms face only moderate competition in product markets and limited pressure from shareholders, allowing them to pass on a significant share of growth to their employees.
This characterized the period from the late 1940s through the mid 1970s, but it’s now long gone. The second is strong unions. I see little hope of that in America’s future. The third is full employment.
Is there any alternative? One possibility might be to use the Earned Income Tax Credit to subsidize wages. We could extend it higher in the income distribution (currently it phases out at about $45,000), reduce its connection to children (currently it’s minuscule for households with no kids), and index it to average wages (it’s now indexed to inflation).
I would prefer the full employment path that Pollin envisions, in which wage growth comes from firms rather than taxpayers.
So, there you have it. If we the hard-working majority in our country to get richer, we need a plan for work.