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Labour's plan to make benefit claimants take skills tests is smart policy

By seeking to ensure that all jobseekers acquire English and maths skills, the party is tackling one of the long-term causes of unemployment and of low pay.

A street cleaner passes the Jobcentre Plus office on January 18, 2012 in Bath. Photograph: Getty Images.

Rachel Reeves's first major speech as shadow work and pensions secretary has been long anticipated. Back in November there was a memorable furore when the Telegraph reported that Labour was planning to "scrap benefits for under-25s" as part of its new approach to social security (Ed Miliband has told shadow ministers not to use the term "welfare"). The claim was quickly denied by Reeves, with angered activists told to wait for her speech in January, but it still aroused the suspicion of the left. Then on Saturday, in a story headlined "Youth Dole Axe", the Sun claimed that Reeves was set to announce plans to "take away" benefits from the young, prompting another wave of Twitter outrage.

Today, Reeves finally has a chance to speak for herself and will announce a policy far more sophisticated than the Sun's story implied (it is puzzling how some on the left, who consistently criticise tabloid reporting, are nevertheless prepared to believe their accounts of Labour policy). In her speech at IPPR, Reeves will detail Labour's plan to introduce a "Basic Skills Test" for all new claimants of Jobseeker's Allowance within six weeks of them signing on. Those who are deemed to lack basic maths, English and IT skills will be required to take up part-time training or lose their benefits (the party estimates that it will affect around 25,000 a month). No one will be automatically stripped of their benefits and the policy will apply to all jobseekers, not just the under-25s (proving the inaccuracy of those earlier reports). Reeves will say: "We all know that basic skills are essential in today’'s jobs market, but the shocking levels of English and maths among too many jobseekers are holding them back from getting work.  This traps too many jobseekers in a vicious cycle between low-paid work and benefits.

"Government plans in this area just aren'’t enough. They’'re now asking jobseekers who exit the failed Work Programme to take up literacy and numeracy training, three whole years after those people first make a claim for benefits.

"A Labour government will introduce a Basic Skills Test to assess all new claimants for Job Seekers Allowance within six weeks of claiming benefits. Those who don’t have the skills they need for a job will have to take up training alongside their jobsearch or lose their benefits. Labour’s Basic Skills Test will give the long-term unemployed a better chance of finding a job and will help us to earn our way out of the cost-of-living crisis."

There are some on the left who will bridle at the conditionality (accept training or lose your benefits) but the policy deserves to be welcomed by those genuinely committed to supporting the jobless. Too often in the past, jobseekers without basic skills have been left to stagnate on the dole, or accept insecure, low-paid employment (leaving them cycling between welfare and work). Nearly one in ten people claiming JSA lack basic literacy skills, while more than one in ten lack basic numeracy skills (making them twice as likely as those in work to not have these skills). Half are unable to complete basic word processing and spreadsheet tasks and nearly half lack basic emails skills (which may prove problematic if the online-only Universal Credit is ever fully introduced). Government research found that a third of people claiming Jobseeker's Allowance had claimed the benefit at least three times before and that nearly 20 per cent of those with repeat claims had problems with literacy or numeracy.

By ensuring that all jobseekers acquire basic skills, Labour is seeking to tackle one of the long-term causes of unemployment and of low pay. The policy is a natural companion to the previously-announced jobs guarantee, which would ensure that all young people out of work for more than a year and all adults out of work for more than two are offered a job paying at least the minimum wage.

The Tories are protesting that the new "Basic Skills Test" is just a "weak version" of a policy announced by George Osborne at last year's Autumn Statement. A Conservative spokesman said: "Labour are copying a Conservative policy that already exists and that is superior to the one they are proposing.

"After 13 years of Labour running our education system, many young people looking for work do not have the English and Maths skills they need to get a job. That's why, starting in some areas at first, anyone aged 18 to 21 signing on without these basic skills will be required to undertake training from day one or lose their benefits. And we are making the long-term changes needed to fix the system by requiring all young people who have not achieved a proper qualification in English and Maths at 16 to continue studying these subjects until age 19.

"Without basic English or Maths, there is a limited chance any young person will be able to stay off welfare. David Cameron's long-term economic plan will give young people the skills they need to get on in life and have a more financially secure future." 

But Labour is pointing out that the coalition's policy is merely a pilot for 18-21-year-olds, rather than an offer of training for all adults without basic skills. By combining such "tough love" measures with plans to abolish the coalition's most pernicious measures, such as the bedroom tax and the national benefit cap (replacing it with one regionally-weighted), Reeves is outlining a balanced welfare policy that both the left and the public can support. 

Elsewhere in her speech, she will again pledge to reform the system so that it gives greater weight to "contribution". This is a return to the Beveridgean principle that those who put more in, get more out. In an article last year, Reeves's predecessor, Liam Byrne, pledged to to examine a higher rate of Jobseeker's Allowance for those who have contributed more. He wrote: 

I think social security should offer more for those that chipped in most either caring or paying in National Insurance. Our most experienced workers and carers have earned an extra hand. We should make sure there something better for when they need it. That’s why we’re looking at just how we put the something for something bargain at the heart of social security reform, starting with a new deal for the over 50s.

This might sound attractive, but one concern among some in Labour is that, to to be affordable, higher benefits for some must mean lower benefits for others. As one Blue Labour figure told me, "our main welfare policy could actually prove more expensive". Unless the party makes it clear who will pick up the bill, the Tories will be able to charge it with promising more of the "unfunded spending" that "got us into this mess". I'm told that Reeves will be offering detailed proposals around contribution, and on pensions, in speeches later this year.