Today, Labour announced that if the party wins the next election every young person out of work for more than 12 months will be given a paid starter job, and that every adult aged 25 or over claiming Jobseeker’s Allowance (JSA) for two years or more will be given the same support. A Labour government would work with employers to help fund paid work with training for six months. It would mean paid jobs for more than 50,000 young people nationwide – including the 370 in Barnsley who have been left on the dole for over a year by this government (across Barnsley, long-term youth unemployment is up 106 per cent since January 2011).
But this would also be a tough contract – those who can work will be required to take up the jobs on offer or lose their benefits. A life on benefits will simply not be an option. The Compulsory Jobs Guarantee scheme will be in Labour’s election manifesto and funded for whole of next Parliament through a repeat of Labour’s successful tax on bank bonuses and restricting pensions tax relief for people earning over £150,000 – the top one per cent – to the same rate as basic rate taxpayers. It is absolutely right that those at the very top contribute to delivering a recovery for the many.
In a response obviously written before Labour’s announcement, the Tories claim this funding has already been allocated, only to look ridiculous once we published the detail which states clearly that the Compulsory Jobs Guarantee is the only policy which will be funded by the bank bonus tax and the proposed changes to pension tax relief. This will be a central part of Labour’s package to get people in to work and bring down the benefits bill. The cost of long-term youth unemployment is £350m a year. It’s unacceptable that taxpayers face such huge costs to pay for the government’s failure to get young people off benefits and into jobs.
Labour will bring welfare spending under control by moving people from benefits and into work and this will run in parallel with other important initiatives, including a Basic Skills Test to assess every new Jobseeker’s Allowance claimant within six weeks of claiming benefits. Anyone who doesn’t have basic English, maths or IT skills will have to take up training or risk losing their benefits.
The Tories can’t and won’t take the action necessary to help us to earn our way out of the cost-of-living crisis. They can’t because they can’t admit that for ordinary Britons there is no real recovery. Having declared that “Plan A” was a success and that the “good news will keep on coming”, David Cameron is in denial about the cost-of-living crisis that is engulfing the country – with families on average £1,600 a year worse off since he came to power. Indeed, when it was put to Treasury minister David Gauke on the radio that “the idea had merit”, his out-of-touch reply was that the government’s “record on unemployment is a good one”. It was British Chambers of Commerce economist David Kern who today in fact said, “Any scheme that helps young people to work is a good scheme.”
The government won’t take action because it only stands up for a privileged few. Having delivered a £3bn tax cut for millionaires, the Tories think that the top one per cent of earners not only need that tax cut but that they should get tax relief on pension contributions at more than twice the rate that the average taxpayer does. Moreover, the Tories announced a further £12bn of welfare cuts if re-elected. This comes from a party that introduced a bedroom tax for the disabled, whilst they continue to bankrolled by donations from the mega-rich and the hedge funds.
Of course, the Tories and the Lib Dems refuse to repeat Labour’s successful tax on bank bonuses which raised £3.4bn in 2010. We know that bank bonuses are actually higher this year than last year: bonuses at Barclays are up ten per cent at £2.4bn, they are up eight per cent at Lloyds at £395m, HSBC bonuses are up six per cent at £2.3bn, and the RBS bonus pool this year is £588m. But what is the government doing about it? Ministers are currently busy campaigning in Brussels against an EU cap on bankers’ bonuses.
On the backfoot this week, they tried to question Labour’s figures. Yet they still refuse to accept our proposal to let the OBR independently audit our plans. What are they afraid of? That Conservative scaremongering about Labour spending will be exposed as untrue?
Labour will take tough decisions to get the deficit down fairly, while making work pay and spreading opportunities for all, in particular for our young people. As a country we simply cannot afford to be wasting the talents of thousands of young people and leaving them stuck on the dole for years on end. It’s bad for them, it’s bad for our economy and it’s bad for taxpayers who have to pay the bill.
Once again this week highlights the battleground for the next general election. The Tories (backed by the Lib Dems) will stand up for the top one per cent and will die in a ditch to defend the bankers. A future Labour government would take real action to restore what Ed Miliband has called “the Promise of Britain” – that we must ensure once again that the next generation have better opportunities, not worse ones, than the last.
Michael Dugher is shadow minister for the Cabinet Office, vice-chair of the Labour Party, and MP for Barnsley East.