"Jobs must be our number one focus"

Barack Obama's words ring true in the UK, too, as 2,250 fresh job losses are announced.

Employment -- or, more accurately, the lack of it -- was at the forefront of the international news agenda today when Barack Obama focused on joblessness in his first State of the Union address. As he said:

People are out of work. They are hurting. They need our help. And I want a jobs bill on my desk without delay. Jobs must be our number one focus in 2010.

The words ring true on this side of the Atlantic, too. Perhaps less widely reported than the Obama speech were two bleak pieces of news for British workers.

Shop Direct, a home shopping group, said that it is to close three call centres in Sunderland, Burnley and Newtown in Powys, at a cost of 1,500 jobs. Toyota also announced that it will axe up to 750 jobs from its main UK factory, the Burnaston plant near Derby. These are large-scale losses in communities where jobs were already in scarce supply.

And the picture for those communities particularly hard hit by the recession looks set to darken further. A recent report by the Institute for Public Policy Research explains:

It appears that those areas where there has been the largest increase in unemployment have above-average reliance on employment in manufacturing, in particular in those low value-added manufacturing industries that are most vulnerable to competition from low-cost companies in emerging economies elsewhere in the world. Unemployment was already high in these areas because companies were closing and cutting costs as a result of this competition. The recession has accelerated the process.

Other analysis shows that housing-led regeneration efforts in northern city-regions have been adversely affected by the recession and that some city-regions are likely to be badly hit when the government starts to cut public spending. For deprived communities in the northern city-regions, this could, therefore, represent a "triple whammy".

Figures earlier this week showed that the economy has returned to growth (just), and last week that unemployment did not rise as much as predicted (largely because more people are working part-time).

Amid these tentative signs of recovery, today's announcements were further evidence that the reverberations of the recession will continue to be felt for many months to come. Short-term help for these communities is vital, but even more important is long-term regeneration to fill the gaping hole left by the decline of UK manufacturing.

Both of the main political parties would do well to follow Obama's lead and place jobs at the centre of the agenda.

 

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Samira Shackle is a freelance journalist, who tweets @samirashackle. She was formerly a staff writer for the New Statesman.

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Theresa May's U-Turn may have just traded one problem for another

The problems of the policy have been moved, not eradicated. 

That didn’t take long. Theresa May has U-Turned on her plan to make people personally liable for the costs of social care until they have just £100,000 worth of assets, including property, left.

As the average home is valued at £317,000, in practice, that meant that most property owners would have to remortgage their house in order to pay for the cost of their social care. That upwards of 75 per cent of baby boomers – the largest group in the UK, both in terms of raw numbers and their higher tendency to vote – own their homes made the proposal politically toxic.

(The political pain is more acute when you remember that, on the whole, the properties owned by the elderly are worth more than those owned by the young. Why? Because most first-time buyers purchase small flats and most retirees are in large family homes.)

The proposal would have meant that while people who in old age fall foul of long-term degenerative illnesses like Alzheimers would in practice face an inheritance tax threshold of £100,000, people who die suddenly would face one of £1m, ten times higher than that paid by those requiring longer-term care. Small wonder the proposal was swiftly dubbed a “dementia tax”.

The Conservatives are now proposing “an absolute limit on the amount people have to pay for their care costs”. The actual amount is TBD, and will be the subject of a consultation should the Tories win the election. May went further, laying out the following guarantees:

“We are proposing the right funding model for social care.  We will make sure nobody has to sell their family home to pay for care.  We will make sure there’s an absolute limit on what people need to pay. And you will never have to go below £100,000 of your savings, so you will always have something to pass on to your family.”

There are a couple of problems here. The proposed policy already had a cap of sorts –on the amount you were allowed to have left over from meeting your own care costs, ie, under £100,000. Although the system – effectively an inheritance tax by lottery – displeased practically everyone and spooked elderly voters, it was at least progressive, in that the lottery was paid by people with assets above £100,000.

Under the new proposal, the lottery remains in place – if you die quickly or don’t require expensive social care, you get to keep all your assets, large or small – but the losers are the poorest pensioners. (Put simply, if there is a cap on costs at £25,000, then people with assets below that in value will see them swallowed up, but people with assets above that value will have them protected.)  That is compounded still further if home-owners are allowed to retain their homes.

So it’s still a dementia tax – it’s just a regressive dementia tax.

It also means that the Conservatives have traded going into the election’s final weeks facing accusations that they will force people to sell their own homes for going into the election facing questions over what a “reasonable” cap on care costs is, and you don’t have to be very imaginative to see how that could cause them trouble.

They’ve U-Turned alright, but they may simply have swerved away from one collision into another.  

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

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