Labour unveils jobs guarantee for the long-term unemployed

Ed Balls announces new policy to be funded by reducing pension tax relief for those earning over £150,000.

Ever since the coalition began its programme of welfare cuts, Labour has argued that the best way to reduce the benefits bill is to get more people into work. Now, ahead of next Tuesday's debate on the Welfare Uprating Bill (which will enshrine in law George Osborne's pledge to cap benefit increases at 1 per cent for the next three years), the party is seeking to show how it would achieve that goal.

In one of the most significant Labour policy announcements since 2010, Ed Balls has said that the party would introduce a compulsory jobs guarantee for long-term unemployed adults to be funded by reducing tax relief on pension contributions for those earning over £150,000 from 50p to 20p. The guarantee would initially apply to those who have been out of work for 24 months, but over time Labour would seek to reduce this limit to 18 or 12 months. The party has already proposed a compulsory youth jobs guarantee (one component of Balls's "five point plan") to be funded through a £2bn tax on bank bonuses. The new policy would apply to the 129,400 adults over the age of 25 who have been unemployed for 24 months or more, an increase of 88 per cent since the same month last year and a rise of 146 per cent in the last two years. All would be paid at least the minimum wage.

In an article for PoliticsHome on a "one nation" approach to welfare reform (note Balls's adoption of his leader's favoured motif), the shadow chancellor writes:

Ed Miliband, Liam Byrne and I are today calling for a compulsory Jobs Guarantee for the long-term unemployed.

This is the One Nation jobs contract Labour would introduce right now: the government will ensure there is a job for every adult who is long-term unemployed, and people out of work will be obliged to take up those jobs or face losing benefits.

Our Jobs Guarantee for adults will build on the model of the Future Jobs Fund with government working with the private and voluntary sectors to ensure there is a job paying the minimum wage for every long-term unemployed person.

Labour's aim is to appear both compassionate - the long-term unemployed will not be left to languish on the dole - and tough - those who are out of work must take accept any job they are offered or lose their benefits ("no ifs or buts," says Balls).

As I said above, the policy would be funded by limiting pension tax relief for the highest earners, a change announced by the last government but reversed by the coalition before its scheduled introduction in April 2011. At present, additional rate taxpayers enjoy relief of 50 per cent (45 per cent from April) on their pension contributions. Balls's proposal would see their tax relief limited to the 20 per cent received by basic rate taxpayers, meeting the £1bn-a-year cost of the policy. He writes:

When times are tough it cannot be right that we subsidise the pension contributions of the top 2 per cent of earners at more than double the rate of people on average incomes paying the basic rate of tax. £1 billion a year would fund a compulsory jobs guarantee initially for all those out of work for 24 months or more – which we would seek to reduce to 18 or 12 months over time.

It's worth recalling that before the 2012 Budget, Danny Alexander called for the government to adopt a similar policy, noting that "If you look at the amount of money that we spend on pensions tax relief, which is very significant, the majority of that money goes to paying tax relief at the higher rate". However, rather than scrapping higher rate relief, George Osborne used his Autumn Statement to reduce the annual tax-free pension allowance from £50,000 to £40,000 (having already reduced it from £255,000) and the lifetime allowance from £1.5m to £1.25m (having already reduced it from £1.8m). As a result, basic rate taxpayers are still subsidising the pension contributions of the highest earners in the country. Balls's proposal is a neat way of reopening this particular coalition divide.

Labour can no longer be accused of lacking positive proposals but the coalition will continue to challenge the party to say how it would meet the cost of uprating benefits in line with inflation, rather than the 1 per cent increase proposed by Osborne. In an article for the Times (£) earlier this week, Nick Clegg wrote: "Labour must show how they’d pay for it. Would they cut hospital budgets? Schools? Defence?"

Balls and Miliband are fond of pointing out that the coalition is simultaneously reducing the top rate of income tax from 50p to 45p (worth an average of £107,500 to the country's 8,000 income millionaires) but they are reluctant to commit the revenue from a reintroduced top rate so early on in the parliament.

Ed Balls speaks at the Labour conference in Manchester last year. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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When the world seems dark and terrifying, we shouldn’t feel ashamed to dream of Utopia

Right now, the future seems dark and frightening and it is precisely now that we must continue to imagine other worlds and then plot ways to get there.

There are many cruel and routine lies we tell to children but perhaps the most indicative is this: if you tell anyone your wish, it won’t come true. This parable was probably invented by parents trying to avoid the trauma of not being able to give their children what they want but we carry it with us to adulthood, when it is repeated to us by our leaders. Don’t tell anyone the sort of world you would like to see – at best you’ll be disappointed and at worst you’ll be arrested.

“We want more.” This week, exhausted by the news, I dragged myself out of the house to a book fair, where I came across a new collection of utopian fiction by radical women. That was the first line and it stopped my breath in my throat. When basic survival seems like a stretch goal, caught as we are between the rich and the rising seas, hope feels like an unaffordable luxury. The precise words I used to the bookseller were, “Shut up and take my money.”

There has never been a more urgent time for utopian ideas, precisely because the concept of a better world has never felt further away. Right now, world leaders are deciding how many cities are going to sink before something is done to reduce carbon emissions. They are meeting in Paris, which very recently saw the opening scene of a new act in everyone’s least favourite dramatic franchise, “War in the Middle East”. We seem to be living in a dystopian trilogy scripted by a sadistic young-adult author and I very much hope that our plucky young heroes show up to save the day soon, even if there’s a clunky love triangle involved.

Dystopias are easy to construct: to paraphrase the novelist Kim Stanley Robinson, you might as well pick five news headlines at random, make a collage and there’s your plot. Utopias are harder. Utopias require that we do the difficult, necessary work of envisioning a better world. This is why imagination is the first, best weapon of radicals and progressives.

Utopian stories existed long before the word was coined by Thomas More in the 16th century to mean an ideal society, or “no-place”. Plato’s Republic has some claim to being the first but there are as many Utopias as there are communities that dreamed of a better life. The greatest age of utopian fiction was the turn of the last century and it is no accident that the early 21st century is a great age of dystopian fiction. The ideology of late-capitalist patriarchy has become so all-encompassing that it no longer looks like ideology. Fredric Jameson observed, “It is easier to imagine the end of the world than the end of capitalism” – and the reason for that is not that capitalism is the inevitable destiny of humankind but that we have spent our lives being told that even thinking about any other future makes us ridiculous.

Most leftists do have an idea of the sort of world they would prefer to see. We don’t say what we want for the same reason that we were told as children not to tell anyone else what we wished for – because it’ll be awkward and painful if we don’t get it.

When I think about Utopia, I think about my grandmother. My mother’s mother left school at 13, lived through the Maltese blockade and was obliged by religion and circumstance to marry young, suffocate all her dreams of education and adventure and spend her life taking care of a husband and six kids. Half a century later, I can choose when and whether to have children. I can choose to live independently from men. I regularly travel alone and there are no legal restrictions on getting any job I’m suited for.

The kind of independence many women my age can enjoy would have been almost unimaginable half a century ago – but somebody did imagine it and that is why we got here. A great many somebodies, over centuries of struggle and technological advancement, asked how the world could be different for women and set about making it happen.

Exactly a century ago, Charlotte Perkins Gilman’s novel Herland envisioned a society of women in which production was communal, motherhood was valued, relationships were equal and rape and violence were unknown. Reading Herland today, it is striking that for every proposition that came true – women are now allowed to divorce their husbands and participate fully in political life – there are two more that seem as far-fetched now as they did in 1915. Motherhood is still not valued as work. Women are still expected to organise our lives around the threat of sexual violence. But all that can change as long as we continue to ask for more.

For as long as I have been a feminist, I have been asked – usually by grumbling men – when, exactly, we will be satisfied; when women and girls will decide we have enough. The answer is contained in the question: because the instant that we do decide that we are satisfied, that there can never be a better world than this, is the instant that the future shuts down and change becomes impossible.

Utopia is the search for Utopia. It is the no-place by whose light you plot a course through a harsh and unnavigable present. By the time you reach the horizon, it is no longer the horizon but that doesn’t mean you stop going forwards.

Right now, the future seems dark and frightening and it is precisely now that we must continue to imagine other worlds and then plot ways to get there. In the midst of multiple global crises, the only truly ridiculous proposition is that things are going to stay exactly the same.

Human societies are going to change beyond recognition and from the conference table to the streets, our best shot at surviving that change starts when we have the courage to make impossible demands – to face down ridicule and say, “We want more.”

Laurie Penny is a contributing editor to the New Statesman. She is the author of five books, most recently Unspeakable Things.

This article first appeared in the 26 November 2015 issue of the New Statesman, Terror vs the State