The onslaught against working families continues

The government's response to youth unemployment will squeeze the "squeezed middle" even further.

If today's report proves correct then tomorrow Nick Clegg will announce a further blow for low-to-middle income families in order to pay for a new programme for the young unemployed.

Let's start with the better, latter, half of that sentence. The new programme will, according to insiders, walk and talk like Labour's "Future Jobs Fund", which offered incentives to employers to take on 18-24 year olds who had been out of work for more than 6 months. In case it has passed you by, this is the very programme that David Cameron likes to mock as being profligate and ineffective. Hence the new coalition version of it will under no circumstances be called by the same name (no doubt some Whitehall wag would have proposed the moniker "the fund for future jobs" -- but I'm guessing coalition ministers will have screened that out).

We'll find out tomorrow what the scheme looks like but if, as seems likely, the coalition has decided to swallow its ideological opposition to wage subsidies going to firms in order to encourage them to take on the young unemployed, then that is to be welcomed -- though it is scandalous that it's taken youth unemployment to reach 1 million to bring this about.

Now let's turn to how the nastier element of tomorrow's promised announcement: how it is to be paid for. Assuming the FT hasn't got it wrong, then the money will be found by the decision not to uprate tax-credits in line with inflation. Which is odd, iniquitous, and revealing all at the same time.

 

It's a bit odd because the Treasury has already banked the savings from freezing the working tax credit for the next three years. Which leaves the other big area of spending: child tax-credit. But here the coalition has sought to burnish their progressive credentials by announcing that they will over index the child element for the next few years (in an attempt to demonstrate some commitment to the child poverty target). Doubtless HM Treasury will have some wheeze up its sleeve for changing the indexing system for this child tax-credits - perhaps by uprating in line with earnings for this year, not inflation. But if this is the case they will face the charge they have broken with the spirit of the key spending commitment they have made on helping families with low-income children.

It's iniquitous because this will hit precisely those families who have already been on the end of the most severe squeeze of their lives. This April they already saw a major hit to support for childcare paid out via the tax credit system. This, along with other changes to tax-credits, mean that a single parent on £28k with two kids is losing £1,300 this year; or a couple with two kids on a joint income in the high £30ks is losing £2800 this year. And these cuts are a mere warm up for more than £1bn of further reductions to tax-credits that have already been announced and will commence in April 2012 - all of them targeted at the same families.

And let's not forget yesterday's news that median wages have plummeted 3.5% in real terms this year, far more for the low paid. So families whose wages are falling at a rapid rate, who have already been severely hit by April's budget cuts, and will be made poorer still in April 2012, are about to be told that they are first in line to take a cut to pay for a new programme.

Which is why this decision is also revealing. It demonstrates very clearly the knee-jerk response of ministers when pressed to find resources for a new funding pressure: take it from families getting tax-credits.

To be clear, I'm all for more action to deal with youth unemployment -- indeed, I suspect that I'd want something more ambitious than what is likely to be announced tomorrow. And that, of course, has got to be paid for. But not by low-to-middle income families.

It's not as if there are no alternatives. Labour will pursue their line that this should be funded through a tax on bankers' bonuses - and for all its well rehearsed feel, this will still strike a chord with many. But if the coalition didn't want to turn to the City there are other principled alternatives. The £7bn-£8bn spent on higher rate pension tax relief? Or stopping affluent pensioners receiving winter fuel allowance?

If this goes ahead, then don't let anyone say there was no alternative. Youth unemployment could be tackled without a further unnecessary squeeze on low-to-middle income Britain.

 

Gavin Kelly is a former adviser to Downing Street and the Treasury. He tweets @GavinJKelly1.

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The rise of the green mayor – Sadiq Khan and the politics of clean energy

At an event at Tate Modern, Sadiq Khan pledged to clean up London's act.

On Thursday night, deep in the bowls of Tate Modern’s turbine hall, London Mayor Sadiq Khan renewed his promise to make the capital a world leader in clean energy and air. Yet his focus was as much on people as power plants – in particular, the need for local authorities to lead where central governments will not.

Khan was there to introduce the screening of a new documentary, From the Ashes, about the demise of the American coal industry. As he noted, Britain continues to battle against the legacy of fossil fuels: “In London today we burn very little coal but we are facing new air pollution challenges brought about for different reasons." 

At a time when the world's leaders are struggling to keep international agreements on climate change afloat, what can mayors do? Khan has pledged to buy only hybrid and zero-emissions buses from next year, and is working towards London becoming a zero carbon city.

Khan has, of course, also gained heroic status for being a bête noire of climate-change-denier-in-chief Donald Trump. On the US president's withdrawal from the Paris Agreement, Khan quipped: “If only he had withdrawn from Twitter.” He had more favourable things to say about the former mayor of New York and climate change activist Michael Bloomberg, who Khan said hailed from “the second greatest city in the world.”

Yet behind his humour was a serious point. Local authorities are having to pick up where both countries' central governments are leaving a void – in improving our air and supporting renewable technology and jobs. Most concerning of all, perhaps, is the way that interest groups representing business are slashing away at the regulations which protect public health, and claiming it as a virtue.

In the UK, documents leaked to Greenpeace’s energy desk show that a government-backed initiative considered proposals for reducing EU rules on fire-safety on the very day of the Grenfell Tower fire. The director of this Red Tape Initiative, Nick Tyrone, told the Guardian that these proposals were rejected. Yet government attempts to water down other EU regulations, such as the energy efficiency directive, still stand.

In America, this blame-game is even more highly charged. Republicans have sworn to replace what they describe as Obama’s “war on coal” with a war on regulation. “I am taking historic steps to lift the restrictions on American energy, to reverse government intrusion, and to cancel job-killing regulations,” Trump announced in March. While he has vowed “to promote clean air and clear water,” he has almost simultaneously signed an order to unravel the Clean Water Rule.

This rhetoric is hurting the very people it claims to protect: miners. From the Ashes shows the many ways that the industry harms wider public health, from water contamination, to air pollution. It also makes a strong case that the American coal industry is in terminal decline, regardless of possibile interventions from government or carbon capture.

Charities like Bloomberg can only do so much to pick up the pieces. The foundation, which helped fund the film, now not only helps support job training programs in coal communities after the Trump administration pulled their funding, but in recent weeks it also promised $15m to UN efforts to tackle climate change – again to help cover Trump's withdrawal from Paris Agreement. “I'm a bit worried about how many cards we're going to have to keep adding to the end of the film”, joked Antha Williams, a Bloomberg representative at the screening, with gallows humour.

Hope also lies with local governments and mayors. The publication of the mayor’s own environment strategy is coming “soon”. Speaking in panel discussion after the film, his deputy mayor for environment and energy, Shirley Rodrigues, described the move to a cleaner future as "an inevitable transition".

Confronting the troubled legacies of our fossil fuel past will not be easy. "We have our own experiences here of our coal mining communities being devastated by the closure of their mines," said Khan. But clean air begins with clean politics; maintaining old ways at the price of health is not one any government must pay. 

'From The Ashes' will premiere on National Geograhpic in the United Kingdom at 9pm on Tuesday, June 27th.

India Bourke is an environment writer and editorial assistant at the New Statesman.

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