The Staggers

The New Statesman’s rolling politics blog

Clegg comes unstuck on jobs scheme

The Deputy PM struggled to deny that the jobs scheme will be paid for by the working poor.

By George Eaton Published 25 November 2011 10:06

As expected, Nick Clegg has this morning announced the government's belated response to the youth unemployment crisis. The £1bn scheme (previewed by Gavin Kelly on his New Statesman blog yesteday) will see wage subsidies worth £2,275 offered to employers to take on 160,000 18- to 24-year-olds over the next three years.

If it sounds a lot like the Future Jobs Fund (FJF) set up by Labour and scrapped by the coalition, that's because it is. There are some differences. The scheme will not operate in the public sector and it provides a smaller job subsidy - £2,25 per job rather than the £6,000 subsidy offered by the FJF. But it still represents a significant U-turn by the coalition. As Gavin wrote on his blog yesterday, the government, confronted by the scandal of one million young people out of work, has been forced to swallow its "ideological opposition to wage subsidies".

The question, for a government that refuses to spend a penny of new money, is how will it be paid for? The Treasury has briefed that the money will be found by not uprating tax credits in line with inflation, a move that would penalise low and middle income earners. Asked to confirm that this was the case on the Today programme this morning, Clegg floundered. He insisted that "this £1bn isn't paid for by one particular tax change or one particular welfare change" but refused to deny that tax credits would bear the brunt. The Deputy PM went on to restate his belief that the majority of savings should come from those with "the broadest shoulders", pointing to the bank levy, the rise in capital gains tax and the crackdown on tax loopholes. But this only begs the question: why isn't the new scheme funded through such a measure? Rather than cutting tax credits, the government could have levied a wealth tax on the asset-rich.

Sounding ever more uncomfortable, Clegg fell back on the line that the full details would be in George Osborne's autumn statement next Tuesday. But, as we have learned, when forced to choose between squeezing the rich and squeezing the poor, the Chancellor squeezes the poor. Clegg's jobs scheme will be balanced on the backs of the least well-off.

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Tags: unemployment Nick Clegg

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19 comments

Sat, 2011-11-26 00:43 — Andrew Howarth

When the Lib Dems do something to help the less well off, as they do often because that is one of the reasons they and their supporters have got them elected, then we should welcome it.

Sat, 2011-11-26 09:42 — matthew fox (not verified)

@Andrew Howarth

Good joke, raising VAT, cutting the childcare working tax credit, increasing tuition fees and scrapping EMA's really helped the well off.

Sun, 2011-12-11 05:35 — Tom (not verified)

Now Clegg says he disagrees with Cameron. Will he resign? I doubt it.

Instead, this will be stretched out. The MSM will endlessly analyze every possible angle. Besides, if Clegg did resign, who would replace him?

Tue, 2011-12-06 12:49 — Chintoo

Clegg is a across between Blair and a cluckle brother.

I'm sure he wants to be Blair.

Fri, 2011-11-25 10:19 — Lee (not verified)

"will see wage subsidies worth £2,275 offered to employers to take on 160,000 18- to 24-year-olds over the next three years."

So if you're 25, don't expect to be able to get a job for 3 years?

Fri, 2011-11-25 10:21 — Livers (not verified)

Is this just another knee-jerk publicity stunt or a significant shift in thinking and policy?

The fact we even have to wonder, tells you a lot about the integrity, perceived or otherwise, of this government.

It would be really nice, just once, to get clear answers and be impressed by their ambition.

Lets wait for the weasel words in the Autumn statement, and then the analysis from journalists and commentators as usual then.

Fri, 2011-11-25 10:30 — rebeccabaez (not verified)

I too was very skeptical before entering into an online program from a High Speed Universities but have been very surprised at how much I have learned. They offers a wide variety of learning resources and very comprehensive study guides in all of their courses.

Fri, 2011-11-25 10:33 — Mike S (not verified)

Clegg was clearly lying through his teeth - something I would have thought he would have become familiar with by now.

Wed, 2011-12-07 14:06 — Jeff Bunga

@ Chintoo

I agree that Nick Clegg is doing a Blair, misleading the general public and sending his children to the same school.

Fri, 2011-11-25 13:49 — Richard (not verified)

""will see wage subsidies worth £2,275 offered to employers to take on 160,000 18- to 24-year-olds over the next three years."

So if you're 25, don't expect to be able to get a job for 3 years?"

To be honest unless you were looking to flip burgers or stack shelves it is not going to affect you. This wont create new jobs just make those companies that use unskilled youth labour anyway slightly better off.

Fri, 2011-11-25 14:38 — Sue Murphy (not verified)

It's not the same as FJF at all. FJF provided jobs paid at minimum wage (so a real wage) with guaranteed training. And had a success rate of about 50% - half of young people on the scheme went on into permanent employment or training. This scheme is a very watered down version.

Sat, 2011-11-26 23:04 — swatantra nandanwar

Govts can plan and say, but rarely can they do,because its the people tht ve to do.
And a lot of the poor and elderly and vulnerable are having to make do.

Sat, 2011-11-26 23:23 — Andrew Howarth

Matthew Fox - it's not a joke. If my daughter wants to go to university I will have no money to pay for it, and thanks to the Lib Dems I don't need to be able to afford it, because nothing has to be paid for in advance. The cost is to be paid afterwards by graduates based on their earnings, their ability to pay. The Lib Dems are doing a good job in a difficult economic situation.

Sat, 2011-11-26 23:52 — Freeman2

Andrew Howarth write, 'When the Lib Dems do something to help the less well off, as they do often...'

Sorry to disappoint you Andrew, but because Clegg was put up to do the announcing doesn't mean it is a 'Lib Dem' policy. It's a coalition government with the Tories. If we go down your line this would be just as appropriate don't you think:

'When the Tories do something to help the less well off, as they do often because that is one of the reasons they and their supporters have got them elected, then we should welcome it.'

Fri, 2011-11-25 17:44 — Ian5

I've felt for a number of years that the dramatic rise in University places has been little short of self funded unemployment. I don't know the figures, but is it possible the dramatic rise in youth unemployment is a consequence of the fees rise? So in actual fact the government might being making short term savings, £2,275 verses JSA or £9000 university fees?

Sat, 2011-12-10 16:58 — Barry Chuckle (not verified)

Nick clegg reminds us of our old brother.

Fri, 2011-11-25 20:33 — Tesco Shelf Stacker (not verified)

Just read that this £1billion youth contract that Nick Clegg has announced for 18-24 year olds will also mean that the entire EU will be able to access these subsidies too - due to EU legislation.

Fri, 2011-11-25 21:37 — matthew fox (not verified)

I wish Lib Dems would do the decent thing, and dump Clegg.