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Forget the budget deficit, the coalition must deal with the jobs deficit

There are now five people chasing every vacancy in the UK.

There can be no doubting Iain Duncan-Smith's commitment to welfare reform. The Secretary of State for Work and Pensions has staked his political career on ambitious and costly plans to simplify the benefits system and make work pay. And though it has received less attention, his Department is also investing in the 'Work Programme', a scheme costing billions annually to improve people's job prospects and help them find work.

But in a year when the number of long-term unemployed workers alone outstrips job vacancies by 330,000, shouldn't we be asking whether these are the only, or indeed the right, priorities? The vast ranks of unemployed workers who are neither 'workshy' nor trapped in a cycle of benefit dependency (some would say the majority) are in for a hard time over the next few years. A quick look at the maths tells us why.

Long-term unemployment has doubled in the last two years to 797,000 while the number of job vacancies on Jobcentre Plus books has fallen to 467,000. There are now five people chasing every vacancy in the UK and our estimates based on Office for Budget Responsibility projections suggest this will shift only slightly to 4.6 people for every vacancy by the end of 2011.

These are not the only vacancies in the job market but they are the ones most likely to be secured by those with fewer skills or less experience - also those most at risk of being left behind in the wake of the recession. Though employment increased in the last quarter much of this can be accounted for by more part-time work and people choosing not to retire.

In today's climate, reforms to make work pay and improve people's job prospects are not wrong, they're just not enough. The Coalition government is relying on private sector growth to fill the jobs gap, with no alternative strategy if this doesn't work out.

A new report published by IPPR this week identifies a number of ways the government can help boost the jobs market without having to resort to expensive job subsidies. Small businesses will be central to sustaining the recovery, creating jobs in new and expanding sectors. Yet many say they can't find workers with the right skills and don't have the capacity to recruit. As well as helping people find work, welfare to work providers could
help stimulate growth by supporting businesses to expand or invest in workforce training, thus creating jobs and boosting productivity.

Similarly, unemployed workers could cover periods of staff training or absence, providing those out of work with new skills and preventing a drop in productivity for employers. This approach was used in Finland and Denmark during the recessions of the 1990s and helped businesses in these countries weather the downturn. In Denmark three out of every four unemployed people found permanent work in this way in the 1990s. Re-directing some existing skills funding and greater employer co-financing could pay for this.

Over the last year we have interviewed unemployed people who are frightened and angry at finding themselves out of work for no reason other than the highs and lows of the economy. We asked people what they want from the system. Their demands were modest. They want to know what jobs they can find locally both now and in the future, so that they can re-train if necessary. In national, standardised system such as the one we have in the UK, this kind of advice is surprisingly hard to find. They want job-specific training that makes it more likely they will find work. They want to know they will eventually find a job if they try hard enough.

But most of all they want to know that they and their families are not alone in being made to carry the burden of a financial crisis they had no role in creating. Unless more is done to create the jobs they need, they may take some convincing on this.

Claire McNeil is a researcher at the IPPR think tank.

Clare McNeil is a senior research fellow at IPPR.

Twitter: @claremcneil1

Photo: Getty Images
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How can Labour break the Osborne supremacy?

The Conservative hegemony is deeply embedded - but it can be broken, says Ken Spours.

The Conservative Party commands a majority not just in the House of Commons, but also in the wider political landscape. It holds the political loyalty of expanding and powerful voting constituencies, such as the retired population and private sector businesses and their workers. It is dominant in English politics outside the largest urban centres, and it has ambitions to consolidate its position in the South West and to move into the “Northern Powerhouse”. Most ambitiously, it aims to detach irreversibly the skilled working classes from allegiance to the Labour Party, something that was attempted by Thatcher in the 1980s. Its goal is the building of new political hegemonic bloc that might be termed the Osborne supremacy, after its chief strategist.

The new Conservative hegemony is not simply based on stealing Labour’s political clothes or co-opting the odd political figure, such as Andrew Adonis; it runs much deeper and has been more than a decade the making. While leading conservative thinkers have not seriously engaged with the work of Antonio Gramsci, they act as if they have done. They do this instinctively, although they also work hard at enacting political domination.

 Adaptiveness through a conservative ‘double shuffle’

A major source of the new Conservative hegemony has been its fundamental intellectual political thinking and its adaptive nature. The intellectual foundations were laid in the decades of Keysianism when free market thinkers, notably Hayak and Friedman, pioneered neo-liberal thinking that would burst onto the political scene in Reagan/Thatcher era.  Despite setbacks, following the exhaustion of the Thatcherite political project in the 1990s, it has sprung back to life again in a more malleable form. Its strengths lie not only in its roots in a neo-liberal economy and state, but in a conservative ‘double shuffle’: the combining of neo-Thatcherite economics and social and civil liberalism, represented by a highly flexible and cordial relationship between Osborne and Cameron.  

 Right intellectual and political resources

The Conservative Party has also mobilised an integrated set of highly effective political and intellectual resources that are constantly seeking new avenues of economic, technological, political and social development, able to appropriate the language of the Left and to summon and frame popular common sense. These include well-resourced Right think tanks such as Policy Exchange; campaigning attack organisations, notably, the Taxpayers Alliance; a stratum of websites (e.g. ConservativeHome) and bloggers linked to the more established rightwing press that provide easy outlets for key ideas and stories. Moreover, a modernized Conservative Parliamentary Party provides essential political leadership and is highly receptive to new ideas.

 Very Machiavellian - conservative coercion and consensus

No longer restrained by the Liberal Democrats, the Conservatives have also opted for a strategy of coercion to erode the remaining political bastions of the Left with proposed legislation against trade unions, attacks on charities with social missions, reform of the Human Rights Act, and measures to make it more difficult for trade unionists to affiliate to the Labour Party. Coupled with proposed boundary changes and English Votes for English Laws (Evel) in the House of Commons, these are aimed at crippling the organisational capacity of Labour and the wider Left.  It is these twin strategies of consensus and coercion that they anticipate will cohere and expand the Conservative political bloc – a set of economic, political and social alliances underpinned by new institutional ‘facts on the ground’ that aims to irrevocably shift the centre of political gravity.

The strengths and limits of the Conservative political bloc

In 2015 the conservative political bloc constitutes an extensive and well-organised array of ‘ramparts and earthworks’ geared to fighting successful political and ideological ‘wars of position’ and occasional “wars of manoeuvre”. This contrasts sharply with the ramshackle political and ideological trenches of Labour and the Left, which could be characterised as fragmented and in a state of serious disrepair.

The terrain of the Conservative bloc is not impregnable, however, having potential fault lines and weaknesses that might be exploited by a committed and skillful adversary. These include an ideological approach to austerity and shrinking the state that will hit their voting blocs; Europe; a social ‘holding pattern’ and dependence on the older voter that fails to tap into the dynamism of a younger and increasingly estranged generation and, crucially, vulnerability to a new economic crisis because the underlying systemic issues remain unresolved.

 Is the Left capable of building an alternative political bloc?

The answer is not straightforward.  On the one hand, Corbynism is focused on building and energizing a committed core and historically may be recognized as having saved the Labour Party from collapse after a catastrophic defeat in May. The Core may be the foundation of an effective counter bloc, but cannot represent it.  A counter-hegemony will need to be built by reaching out around new vision of a productive economy; a more democratic state that balances national leadership and local discretion (a more democratic version of the Northern Powerhouse); a new social alliance that really articulates the idea of ‘one nation’ and an ability to represent these ideas and visions in everyday, common-sense language. 

 If the Conservatives instinctively understand political hegemony Labour politicians, with one or two notable exceptions, behave as though they have little or no understanding of what is actually going on.  If they hope to win in future this has to change and a good start would be a collective sober analysis of the Conservative’s political and ideological achievements.

This is an extract from The Osborne Supremacy, a new pamphlet by Compass.

Ken Spours is a Professor at the IoE and was Convener of the Compass Education Inquiry. The final report of the Compass Education Inquiry, Big Education can be downloaded here.