The long road from welfare to work

Will the government’s proposals to change the way training providers are paid really help solve the

In one of the upstairs rooms at the Rathbone training organisation's facilities in Oldham, Greater Manchester, Josh Duffy is leaning back on a chair that is too small and totting up the organisations that have tried to help him get a job. Rathbone is the sixth training provider with which Josh, who's just become a dad, has had contact since leaving school two years ago.

We count them up: first, there was North Lancs Training, where he studied construction. He left to go to Oldham College, where he was enrolled on a Level 1 bricklaying course. Then, after he decided that wasn't for him, a company called Work Solutions provided him with a mentor and some help writing a CV. "I didn't see them often. I didn't have much chance of getting a job. I was young and I had no experience," Josh explains.

After about six months without progress, he applied for plumbing. But that was with a private training provider and Josh couldn't afford the £2,500 fee. Next, he embarked on an "entry to employment" course with the YMCA. After eight weeks there, things seemed to be looking up. He had certificates in first aid, manual handling and safety, and the YMCA had moved him on to something called a "foundation modern apprenticeship" in retail, with a placement at an Ethel Austin clothing store. A couple of months down the line, he was told there wasn't any prospect of a job – the chain was cutting the hours of permanent staff and later went into administration.

So, Josh washed up at the door of Rathbone, which found him a work placement at a local store called B&M Bargains. Despite his ropey training history, the charity was prepared to give him a go, secure in the knowledge that it would be paid for its work. In future, it might have to think harder about doing this. The new Work and Pensions Secretary, Iain Duncan Smith, proposes that organisations delivering his welfare-to-work programme should be paid by results. That, according to Paul Fletcher, Rathbone's director of youth engagement, will leave them with tough decisions to make about whether to carry on doing what they do best – taking the most disaffected young people off the streets and setting them on their feet – or to focus on the easy-to-help and a healthy bank balance. There's nothing intrinsically wrong with payment by results, he tells me, it's just that it doesn't seem to have been adequately thought through.

“Principles are good, but the consequences for the financial balance sheet can be messy," Fletcher concedes. "The big question for organisations like ours is: do we start to be more selective and drive our performance in terms of who we are going to get paid for, or do we stick with our mission and risk not actually getting paid? The way a lot of providers will respond is by being selective at the front door. That means the most vulnerable and the most marginalised could end up going underground, losing their benefits and going into the black economy."

Revolving door

Duncan Smith's proposals are an extension of rules that began to be implemented under the last government. Under Labour's Flexible New Deal, providers were paid 20 per cent of their fee – typically about £1,400 in total – upfront, 30 per cent when clients had found a job and stuck at it for three months, and the rest after they'd been working six months. Now, it's likely that the full payment will not come in until they have stuck with a job for a year.

In some ways, what is happening is a fundamental shift in the way we deal with the young unemployed. Previously, the critical target of government programmes was to get people off the books of organisations such as Jobcentre Plus, so the end result was less important.

Julie Bird, the Rathbone tutor who brought Josh to the centre, sums up the old approach: "Everybody has targets to meet and as long as [the clients] are in some kind of training, it makes the statistics look good." The problem with this, she explains, is that these programmes become an end in themselves. Lots of people, like Josh, end up in a kind of revolving door, spat out by one provider, then sucked in by another. "There's quite a few in that situation," Bird says. "There's not always a guaranteed job at the end of it. Once the young person's off that book, there's no follow-up."

So well recognised is this phenomenon that there's even a word for it in the trade – "churn". There is no requirement for training organisations to monitor how many times their recruits have been around the course before, so there are no statistics to back up the sense that these short-term fixes haven't been working. Yet a major study on disengaged youth published in 2008 by the Nuffield Foundation and Rathbone estimated that four out of ten young people who were out of work were caught in a repeating cycle of short-term courses, casual employment and joblessness.

Rebuilding walls

Duncan Smith's payment-by-results plan is designed to deal with this. The question for the new government will be whether, by such a simple expedient as not paying the providers of back-to-work schemes until they deliver long-term results, it can reverse decades of labour-market casualisation and even the age-old tendency of the young to drift from one job, or one course, to another.

With youth unemployment hovering at the one million mark, and reports that there will be 70 applications for every graduate job this year, the issue looks unlikely to go away in the near future.

Fletcher has a different solution, which is gaining currency among many of those who work with the young unemployed. We should, he says, return to the glory days of Margaret Thatcher's Youth Training Scheme (YTS). One of Fletcher's first jobs was running such a scheme. "We rebuilt people's garden walls with old tradesmen passing on their skills, so there was job satisfaction and understanding," he says. "The key thing is, it's got to be perceived as real. At the time, I thought it was just OK, but with hindsight it was a good scheme."

YTS, he points out, was a 12-month placement – later extended to two years – with a non-means-tested allowance of around £30 a week – the same as today's education maintenance allowance, and in real terms about three times as high. Most of the participants progressed into real jobs.

Josh, after many false starts, has almost managed to do the same. He's just been told B&M Bargains is prepared to take him on as an apprentice. He talks with enthusiasm about his workplace, where he has been getting a £30 allowance for a 30-hour week since last November. "I'm looking after the furniture department. I build displays and do merchandising. It's great – I like hands-on work," he explains. As an apprentice, he'll still be on a low wage: "It's rubbish, but it's got to be done," he says, cheerfully. For him, finally, there should be a happy ending. It is much less clear how the legions of similarly unlucky or confused young people will fare under the new system.

The lost generation

Unemployment rose from 1.3 million to more than 3.4 million during Margaret Thatcher's premiership. Families were hardest hit in Northern Ireland, where unemployment reached 20 per cent, and in Scotland and the north-east, where the jobless rate was roughly 15 per cent.

In response to the persistently high rates of youth unemployment, Thatcher founded the Youth Training Scheme, a programme offering on-the-job training to 16- and 17-year-olds. The scheme was praised by some as an effective replacement for apprenticeships, but others argued that it enabled employers to exploit school leavers as cheap labour.

Many historians view the rise in unemployment as a regrettable but necessary consequence of the Tories' economic policies. Others, however, contend that the Thatcher government deliberately raised unemployment in order to destroy trade union militancy. Sir Alan Budd, who recently resigned as head of the Office for Budget Responsibility, said in 1992: "Raising unemployment was an extremely desirable way of reducing the strength of the working classes, if you like . . . What was engineered there in Marxist terms was a crisis of capitalism, which recreated a reserve army of labour and has allowed the capitalists to make high profits ever since."

George Eaton

This article first appeared in the 26 July 2010 issue of the New Statesman, Wanted: leader of the Labour party

BRIAN ADCOCK FOR NEW STATESMAN
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Divided Britain: how the EU referendum exposed Britain’s new culture war

The EU referendum exposed a gaping fault line in our society – and it’s not between left and right.

There are streets in Hampstead, the wealthy northern suburb of London, where the pro-EU posters outnumber cars. A red “Vote Remain” in one. A “Green Yes” in another. The red, white and blue flag of the official campaign sits happily next to a poster from the left-wing campaign Another Europe Is Possible proclaiming that the world already has too many borders.

If you were looking for an equivalent street in Hull, in the north of England, you would look for a long time. In the city centre when I visited one recent morning, the only outward evidence that there was a referendum going on was the special edition of Wetherspoon News plastered on the walls of the William Wilberforce pub in Trinity Wharf. Most of the customers agreed with the message from the chain’s founder, Tim Martin: Britain was better off outside the European Union.

“Far too much Hampstead and not enough Hull” – that was the accusation levelled at the Remain campaign by Andy Burnham in the final weeks of the campaign. He wasn’t talking about geography; Remain’s voice is persuasive to residents of Newland Avenue in Hull, where I drank a latte as I eavesdropped on a couple who were fretting that “racists” would vote to take Britain out of the EU.

Rather, Burnham was talking about an idea, the “Hampstead” that occupies a special place in right-wing demonology as a haven of wealthy liberals who have the temerity to vote in the interests of the poor. The playwright and novelist Michael Frayn, in his 1963 essay on the Festival of Britain, called them “the Herbivores”:

“. . . the radical middle classes, the do-gooders; the readers of the News Chronicle, the Guardian, and the Observer; the signers of petitions; the backbone of the BBC . . . who look out from the lush pastures which are their natural station in life with eyes full of sorrow for less fortunate creatures, guiltily conscious of their advantages, though not usually ceasing to eat the grass.”

For Hampstead then, read swaths of Islington, Hackney, Brighton, Bristol, Cambridge, Edinburgh and Oxford today – all areas that were most strongly in favour of Remain and where Jeremy Corbyn is popular. But Remain never found a tone that won over the other half of Labour England; the campaign struck as duff a note among the diminishing band of pensioners on Hampstead’s remaining council estates as it did on Hull’s Orchard Park Estate.

The rift between “Hampstead and Hull”, in the sense that Andy Burnham meant it, is one that has stealthily divided Britain for years, but it has been brought into sharp focus by the debate over Europe.

Academics use various kinds of shorthand for it: the beer drinkers v the wine drinkers, or the cosmopolitans v the “left behind”. “It’s not just that [Britain] is div­ided between people who buy organic and people who buy own-brand,” says Philip Cowley, a professor of politics at Queen Mary University of London, “but between people who wouldn’t understand how anyone could buy own-brand and people who wouldn’t buy organic if you put a gun to their head.” Equating political preferences with shopping habits might sound flippant, but on 21 June the retail research company Verdict estimated that “half of Waitrose shoppers backed a Remain vote, against just over a third of Morrisons customers”.

The referendum has shown that there is another chasm in British politics, beyond left and right, beyond social conservatism v liberalism, and beyond arguments about the size of the state. The new culture war is about class, and income, and education, but also about culture, race, nationalism and optimism about the future (or lack of it). This divide explains why Ukip’s message has been seductive to former Labour voters and to Tories, and why Boris Johnson, an Old Etonian, led a campaign that purported to despise “elites” and “experts” and spoke of “wanting our country back”.

***

At the start of the campaign, the question that most accurately predicted whether you would back Remain or Leave was consistently: “Are you a graduate?” (Those who answered yes were much more likely to vote in favour of staying in the EU.) Stronger In never found a way to change that and win over those who left education at 18 or earlier. Pollsters also suggested that the much-vaunted Euroscepticism of older voters reflects generations where only one in ten people went to university.

This fissure has been growing for the best part of a decade and a half, but Britain’s first-past-the-post system, which deters newcomers and maintains entrenched parties, has provided a degree of insulation to Labour that its European cousins have lacked. Yet even here in the UK the mid-Noughties brought the brief rise of the British National Party, powered by voter defections from Labour in its strongholds in east London and Yorkshire, as well as the election of the Greens’ first MP on the back of progressive disillusionment with the governments of Tony Blair and Gordon Brown.

In office, both Blair and Brown calculated, wrongly, that Labour’s core vote had “nowhere else to go”. In opposition under Ed Miliband, the party calculated, again wrongly, that discontent with immigration, and the rise of Ukip powered by that discontent, was a problem for the Conservative Party alone.

In a 2014 pamphlet for the Fabian Society, ­Revolt on the Left, the activist Marcus Roberts, the academic Rob Ford and the analyst Ian Warren warned that Labour had “few reasons to cheer about the Ukip insurgency and plenty to worry about”. When the votes were cast in the general election the following year, that prediction turned out to be dispiritingly accurate. Defections from Labour to Ukip led to Labour losing seats to the Conservatives in Gower, Southampton Itchen, Telford and Plymouth Moor View.

For the most part, however, first-past-the-post papered over the cracks in Labour’s broad coalition: cracks that, in the harsh light of the EU referendum, have become obvious. The divide isn’t simply one of class, or income. The social profile and culture of voters in Cumbria are no different from that of voters on the other side of the border – but Scots in the Borders backed a Remain vote while their English peers in the border areas opted for Brexit. Inhospitality towards Brexit proved a stronger indication of city status than a mere cathedral: Vote Leave generally found Britain’s great cities more difficult terrain than the surrounding towns and countryside.

The problem of the fracturing vote is particularly acute for the Labour Party, which for much of the 20th century was able to rely on the Herbivores. In concert with Frayn’s “less fortunate creatures”, they have been enough to guarantee Labour close to 250 seats in the House of Commons and roughly one-third of the popular vote, even in difficult years. But Britain’s EU referendum placed Hampstead and Hull on opposing sides for the first time in modern British political history.

It was Tony Blair who, in his final speech to the Trades Union Congress as Labour leader in September 2006, said that the new debate in politics was not left against right, but “open v closed” – openness to immigration, to diversity, to the idea of Europe. Driven by their commitment to openness, Blair’s outriders dreamed of reshaping Labour as a mirror of the US Democrats – though, ironically, it was Ed Miliband, who repudiated much of Blair’s approach and politics, who achieved this.

At the 2015 election Labour’s coalition was drawn from the young, ethnic minorities and the well educated: the groups that powered Barack Obama’s two election wins in 2008 and 2012. The party was repudiated in the Midlands, went backwards in Wales and was all but wiped out in the east of England. (Scotland was another matter altogether.) Its best results came in Britain’s big cities and university towns.

The Remain campaign gave Labour a glimpse of how Miliband’s manifesto might have fared without the reassuring imprimatur of a red rosette. Britain Stronger In Europe has been rejected in the Midlands and struggled in the east of England. But it also failed to inspire passion in Sunderland, Oldham and Hull – all areas that, for now, return Labour MPs.

***

In appearance, Hull’s city centre is built on blood and sandstone, dotted with memorials to a lost empire and postwar replacements for bombed buildings, all ringed by suburban housing built by the private sector in the 1930s and the state in the 1950s and 1960s. It could be Bristol without the excessive hills, or a smaller Glasgow with a different accent. Unlike in Glasgow or Bristol, however, the residents of Hull are largely hostile to the European Union. Unlike Glasgow and Bristol, Hull is a post-imperial city that has yet to experience a post-colonial second act.

The William Wilberforce is named after a native son who helped destroy the British slave trade, the engine of Hull’s prosperity in the 18th century. The destruction of another local industry – fishing – drives resentment among the pub’s ageing clientele, who were there for breakfast and a bit of company when I visited. They blame its demise squarely on the EU.

Although the Labour Party now has only one MP in Scotland, the back rooms of the labour movement host an outsized Scottish contingent. For that reason – and the continuing threat that the loss of Labour’s seats in Scotland poses to the party’s chances of winning a majority at Westminster – the Scottish independence referendum of 2014 loomed large for Labour throughout the EU campaign.

From the outset, Britain Stronger In struggled to replicate the success of the Scottish No campaign, in part because the price of victory was one that Labour regarded as too high to pay a second time. In Glasgow, in the week before the Scottish referendum, everyone knew where Labour stood on independence – consequently, many voters were already planning to take revenge. The proprietor of one café told me that Labour was “finished in this city, for ever”.

Predictions of this sort were thin on the ground in Hull. Alan Johnson, the head of Labour’s EU campaign, is one of the three Labour MPs whom Hull sent to Westminster in 2015. But even late in the campaign, in his own constituency, I found uncertainty about the party’s official position on the referendum. For that reason, if nothing else, it didn’t have the feeling of a city preparing to break with a half-century-plus of Labour rule, as Glasgow did in 2014. In Scotland, most people I spoke to believed that they were on the brink of independence, which made the eventual result a big blow.

Only among Hull’s pro-European minority could I find any conviction that Britain might actually leave the EU. In September 2014 Kenneth Clarke remarked that Ukip’s supporters were “largely . . . the disappointed elderly, the grumpy old men, people who’ve had a bit of a hard time in life”. To listen to Hull’s Leave voters is to hear tales of the same frustrated potential: they feel that politicians of all stripes have lives entirely removed from theirs. In their defence, they are right – just 4 per cent of MPs in 2010 were from working-class backgrounds.

As for Ken Clarke, he has carved out a second career as every left-winger’s favourite Tory, but that tone of indifference towards the “disappointed lives” of globalisation’s casualties recalls his younger days as a rising star of Margaret Thatcher’s government.

Hull’s residents have been dismissed, first as the regrettable but inevitable consequence of Thatcherite economics, and now as small-minded opponents of social progress and racial diversity. Unsurprisingly, people who feel that their wishes have been ignored and in some cases actively squashed by successive governments of left and right did not expect to wake up on the morning of 24 June to discover that this time, their votes really had changed something.

Equally unsurprisingly, the Remain campaign’s warnings of economic collapse lacked force for people for whom the world’s end had been and gone.

In Glasgow in 2014 Scottish independence was a question of identity in itself, whereas in Hull, hostility towards Europe is the by-product of other identities that feel beleaguered or under threat: fishing, Englishness and whiteness, for the most part.

In Hampstead, a vote for Remain feels more like a statement about the world as you see it. One woman, who walks off before I can probe further, tells me: “Of course I’m voting to stay In. I buy Fairtrade.”

***

Immigration, not the European Union, is the issue that moves voters in Hull. “Britain is full” was the most frequent explanation they gave for an Out vote. Knowing that immigration, rather than the abstract question of sovereignty, would be crucial to winning the contest, Vote Leave tried from the beginning to make it a referendum on border control. Leave’s main theme: the threat of Turkey joining the European Union and, with it, the prospect of all 75 million Turks gaining the right to live and work in Britain.

Although Turkey’s chances of joining the EU are somewhere only just north of its hopes of launching a manned mission to Mars, the tactic worked: according to an ­Ipsos MORI poll released on the morning of 16 June, 45 per cent of Britons believed that Turkey will be fast-tracked into the Union.

That same morning, Nigel Farage posed in front of a poster showing refugees – mostly from Syria and most of them non-white – on the border between Croatia and Slovenia, with a slogan warning that uncontrolled immigration was leaving Britain at “breaking point”. But the row over the poster came to an unpleasant halt just a few hours later as news began to break that Jo Cox, the Labour MP for Batley and Spen, had been shot and stabbed on her way out of a constituency surgery. She died of her injuries a little over an hour later. On 19 June Thomas Mair, who was arrested in connection with the killing, gave his name at Westminster Magistrates’ Court as “Death to traitors, freedom for Britain”.

The circumstances of the killing felt familiar. A little after midnight on 5 June 1968, Robert Kennedy was returning to the Ambassador Hotel in Los Angeles in high spirits. He had just won a crucial victory in the California primary and was well placed to secure the Democratic nomination to run in that year’s presidential election. Going through the kitchen in order to avoid cheering crowds and get straight to his press conference, he was ambushed by a man called Sirhan Sirhan, who fired six shots from a revolver. Kennedy was rushed to hospital, where he died early the following morning.

Five months later Richard Nixon was elected president. The American right held on to the White House for 20 years out of the next 25. Jo Cox’s killing, amid the nativist howling from Farage et al, felt like the beginning of a similar chapter of right-wing advance in the UK.

Labour’s problem, and that of its social-democratic cousins throughout Europe, is the same as the American left’s was in the 1960s. Its founding coalition – of trade unions, the socially concerned middle classes and minorities, ethnic and cultural – is united (barely) on economic issues but irrevocably split on questions of identity. Outside crisis-stricken Greece and Spain, the left looks trapped in permanent opposition, with no politician able to reconsolidate its old base and take power again.

***

When I arrive in Hull, preparations are under way for a vigil in Jo Cox’s honour, but it is the nation of Turkey that is weighing on the minds of undecided voters. On Park Street, residents are divided. Those who have exercised their right to buy and are concerned about their mortgages are flirting with an Out vote but are terrified about negative equity. Those who remain in social housing or the private rented sector are untouched by stories of soaring mortgages. To many residents, the Treasury’s dire warnings seem to be the concerns of people from a different planet, not merely another part of the country. As Rachel, a woman in her mid-fifties who lives alone, puts it: “They say I’d lose four grand a month. I don’t know who they think is earning four grand a month but it certainly isn’t me.”

As Vote Leave knew, the promise that an Out vote will allow people to “take control” always had a particular appeal for those with precious little control – of their rent, of next week’s shift, of whether or not they will be able to afford to turn the heating on next week. Never mind that the control envisaged by Vote Leave would be exercised by the conservative right: the campaign found a message that was able to resonate across class and region, at least to an extent that could yet create a force to be reckoned with under first-past-the-post in Britain.

Four grand a month isn’t a bad salary, even in leafy Hampstead, but in that prosperous corner of north London fears of an Out vote, and what will come after, gained a tight purchase. The worry was coupled with resentment, too, over what would come, should the Outers triumph.

The great risk for the left is that herbivorous resentment is already curdling into contempt towards the people of Hull and the other bastions of Brexitism. That contempt threatens the commodity on which Labour has always relied to get Hull and Hampstead to vote and work together – solidarity. The referendum leaves the Conservatives divided at Westminster. That will give little comfort to Labour if the long-term outcome of the vote is to leave its own ranks divided outside it.

 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics. 

This article first appeared in the 23 June 2016 issue of the New Statesman, Divided Britain