Ed Miliband looks to get tough on Generation Y

Labour's reform proposals may be radical, but only in the sense of the state retreating from helping young people.

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The Labour leader's new reform programme looks tough for the young. Photo: Getty

Ed Miliband proposed today that under a Labour government jobless young people will have to get on to a training course rather than claim benefits. Tony Blair set the same aspiration in 1997 when describing his government’s New Deal. "There will be and should be,” he said, “no option of an inactive life on benefit." The coalition government takes a similar view, often coming in for criticism of the extent of conditionality that it enforces before people can continue to receive benefits.

Yet Labour is describing its proposals as a radical attempt at social renewal rather than getting tough with young people. It might claim that what is different about its proposals compared to the coalition or the Blair era is that the condition they are putting on benefits for young people is an enabling one not a punitive one, i.e. the point is to incentivise young people to get “proper training” (the phrase used by the Labour leader today) not merely to go to CV clinics or undertake unpaid work experience. But that claim requires Labour to prove that a training course is more likely to provide relevant skills that an employer cares about than what the Coalition is putting on offer. This is far from obvious.
 
Ed Miliband also said that Labour will end the "perversity" whereby those in training lose their benefits. The coalition is ahead of him. The so-called 16 hour rule, by which a jobless person is deemed no longer to be seeking work if they are in training for more than 16 hours per week, has already gone in relation to traineeships. Young people can be on a traineeship for up to 30 hours per week and retain their benefits.
 
Part of the problem I’m identifying is created by political rhetoric. What Labour is proposing has to by this stage be described as radical, so people say, rather than an adaptation of what has gone before. Yet when it’s so obviously the latter rather than the former this is rather self-defeating.
 
Where the proposals do mark a more significant departure is in what they tell us about Labour’s view on, if you like, the constitutional status of young people. In addition to making the payment of benefits to young people conditional on being in training, Labour would also adjust the amount of the payment in line with parental income. Young people from rich backgrounds will get nothing at all. Only those from poorer backgrounds will get the full amount. In other words, young people even past the age of 18 are no longer to be considered independent of their parents.
 
Ed Miliband suggested in his speech that he is merely proposing the same treatment for young people in training as for those in higher education but he has got that wrong. Young people in higher education receive financial assistance for paying loans as well as for paying at least a portion of their living costs regardless of parental income; and they are responsible for paying back those loans themselves. Their families may provide them with help on top of this but the point is that the state does not assume that their families will do so; by contrast Labour would assume that young people in training will be helped out financially by their parents. This does not treat young people in training the same versus those in higher education, it treats them substantially worse.
 
The single proposal in the speech on enhancing the contributory principle in welfare delivers one final jolt to young people. Ed Miliband said that a Labour government would enhance the additional amount of job seeker’s allowance that is available to those with a contributions record but that record will have to be five years long rather than the current 2 years. In other words, anyone with a two-year record of contributions would miss out on any contributory job seeker’s allowance and will have to work for a further 3 years before they are entitled to it. This disproportionately impacts on younger people because they will be less likely, merely by virtue of age, to have worked for five years.
 
The overall message to young people feels in the end quite far from an enabling one: rely on your parents for financial help, and work for at least five years before we deem you to be a "contributor". Is this radical? Well, perhaps, but only in the sense that these proposals mark a retreat of the state from helping young people with the expectation that the family, and indeed the individual, have to bear more responsibility. Will that lead to social renewal? It depends on the rest of the package. For the moment it looks like a tough new deal for Generation Y without much in return.

Emran Mian is Director of the Social Market Foundation

Emran Mian is director of the Social Market Foundation