Local solutions are the key to full employment

Labour is learning from countries where local services are trusted to match job seekers with vacancies.

In the pages of this week’s New Statesman the ever excellent Ian Mulheirn takes a look at this government’s employment policy. Needless to say it’s not a roaring success.

For proof, you need look no further than Wednesday’s unemployment figures. For the second month in a row, the number of people actually in work fell; that means our economy has quite simply stopped created jobs and is starting to lose them. Unemployment rose. Long term unemployment rose – and we now live in a country where one in five people out of work has been on the dole for more than two years. Yet in spite of the obvious need Ministers continue to resist Labour’s calls for a Compulsory Jobs Guarantee to end the prospect of a life on the dole.

Instead Iain Duncan Smith presses on with a Work Programme that doesn’t work, leaving more and more people getting further and further away from the labour market. And what’s more he has failed the very test he set himself his during fleeting reinvention as a compassionate conservative.

Back in Easterhouse the future Secretary of State for Work and Pensions told the world that, “A nation that leaves its vulnerable behind, diminishes its own future.” But after three years of power he isn’t bringing unemployment down on Britain’s poorest communities, he’s watching it rise.

Today, three quarters of the British estates most blighted by unemployed have seen worklessness rise since May 2010, and in two thirds long term unemployment has continued to spiral out of control.

Yet for all the promises they made in Opposition, this government has done nothing to re-skill the unemployed for the jobs that do exist. And the truth is skills are more important than ever – in today’s global market place, low skilled British workers are competing with workers paid twelve times less. The result is more than half of those without a skill are out of work, and the number is rising.

More and more of our low-skilled or no-skilled workers now live in Britain’s poorest communities. In fact, some of Britain’s poorest communities are home to five times more unskilled workers than Britain’s richest communities, and the truth is Ministers are allowing them to fall further and further behind.

The answer to the problem of poor places - as I argued in my speech to IPPR North last night – can be found in countries that are localising back to work services so workers can be better connected with local jobs, saving the state a fortune in benefit payments along the way. In times as tough as these we certainly shouldn’t be afraid to borrow the best ideas from our friends and neighbours.

In Germany, their more localised approach has contributed to saving billions of euros in welfare payments by driving up the employment rate. Local jobcentres work closely with surrounding schools and have deep roots in the local labour market which allows them to engage with employers far beyond the traditional low skill, low pay sectors.

Whilst in Canada, localised delivery of back to work programmes give local government the flexibility to establish their own priorities and to develop programmes to achieve them. Provinces and territories control how the funding is allocated in order to meet the needs of their particular labour markets, which in turn gives them the opportunity to apply local expertise to skills development, allocating targeted wage subsidies, and creating Job Creation Partnerships, to help provide useful work experience that leads to sustained employment

But it’s not just on foreign shores that decision makers are changing things on the ground with a more localised approach. Here in the UK, Labour authorities are already leading the way. Places like Glasgow, Wales, Newham and Liverpool are seeing Labour leaders innovate in a way that DWP officials in Whitehall cannot, by using local expertise to tackle unemployment head on. That’s how we start on the path back to full employment – and that’s how we rebuild Britain.

For Labour, that goal of full employment has always been the foundation for getting our country back on its feet. It was for Atlee’s Labour. It was for New Labour. It will be once more for One Nation Labour. Today the goal of full employment is important for a very simple reason. The faster we return to full employment, the faster we can pay down our debt. And the faster we can put the “something for something” back in to social security.

The Tories’ problem isn’t just that they are failing, but that they lost a belief in full employment many years ago, and never rediscovered it. That means more money spent on unemployment, so there is less to go around for working people and less for care.

After three years of failure we’ve got to find new ways to break out of this viscous circle. Seventy years ago, we set out a new path to full employment. Just as the Beveridge Report is a still a good roadmap for today, so too is the 1944 White Paper on Full Employment. It teaches us to be radical reformers to bring down the costs of social security; building exports; supporting public investment; fanning consumer demand – and taking determined action on jobs. It is a long road, but tackling poor places would be a big first step to getting our country back to full employment.

Next year we celebrate the 70th anniversary of the white paper on full employment. We should mark that anniversary not with empty words but with big plans. Plans to rebuild the path to full employment for new times. Plans which could help us modernise our social security system, rebuild trust, and crucially put its finances back on an even keel for the future.

Liam Byrne is Labour MP for Birmingham Hodge Hill, cofounder of the UK-China Young Leaders Roundtable and author of Turning to Face the East: How Britain Prospers in the Asian Century.

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PMQs review: Jeremy Corbyn turns "the nasty party" back on Theresa May

The Labour leader exploited Conservative splits over disability benefits.

It didn't take long for Theresa May to herald the Conservatives' Copeland by-election victory at PMQs (and one couldn't blame her). But Jeremy Corbyn swiftly brought her down to earth. The Labour leader denounced the government for "sneaking out" its decision to overrule a court judgement calling for Personal Independence Payments (PIPs) to be extended to those with severe mental health problems.

Rather than merely expressing his own outrage, Corbyn drew on that of others. He smartly quoted Tory backbencher Heidi Allen, one of the tax credit rebels, who has called on May to "think agan" and "honour" the court's rulings. The Prime Minister protested that the government was merely returning PIPs to their "original intention" and was already spending more than ever on those with mental health conditions. But Corbyn had more ammunition, denouncing Conservative policy chair George Freeman for his suggestion that those "taking pills" for anxiety aren't "really disabled". After May branded Labour "the nasty party" in her conference speech, Corbyn suggested that the Tories were once again worthy of her epithet.

May emphasised that Freeman had apologised and, as so often, warned that the "extra support" promised by Labour would be impossible without the "strong economy" guaranteed by the Conservatives. "The one thing we know about Labour is that they would bankrupt Britain," she declared. Unlike on previous occasions, Corbyn had a ready riposte, reminding the Tories that they had increased the national debt by more than every previous Labour government.

But May saved her jibe of choice for the end, recalling shadow cabinet minister Cat Smith's assertion that the Copeland result was an "incredible achivement" for her party. "I think that word actually sums up the Right Honourable Gentleman's leadership. In-cred-ible," May concluded, with a rather surreal Thatcher-esque flourish.

Yet many economists and EU experts say the same of her Brexit plan. Having repeatedly hailed the UK's "strong economy" (which has so far proved resilient), May had better hope that single market withdrawal does not wreck it. But on Brexit, as on disability benefits, it is Conservative rebels, not Corbyn, who will determine her fate.

George Eaton is political editor of the New Statesman.