Out of the suffering of the 1930s, Britain built a civilising society, based in large part on the important lesson that unemployment is rarely the fault of individual malingering but the structural consequence of governments allowing the free market to rule our lives. Labour leaders such as Clem Attlee learnt this when he worked among the poor and unemployed in the East End. Many Labour MPs in his government knew it from bitter personal experience. Popular revulsion swept away the outdated Poor Law that had stigmatised the unemployed with its brutal means-testing and demeaning forced labour. Benefits became rights and entitlements, not charity. The democratically accountable state became responsible for providing the entitlements of the unemployed, replacing the distribution of alms by charitable bodies.
Tragically today, as thousands again find that through no fault of their own they can lose their job and very quickly find everything they thought secure placed at risk, the government has forgotten the lessons of the 30s. As people look to it for assistance in a dismal economic climate, it seems perverse that the government’s answer is a welfare reform bill with a bloody-minded focus on New Labour’s twin obsessions of penalising the unemployed and privatising public services.
With 2 million unemployed and vacancies drying up, already 10 people are chasing every vacancy. Jobcentre staff have been commended for rising to the challenge of helping people through this difficult period. In fact in the government’s recent green paper, Jobcentre Plus was described as “one of the best back to work agencies in the world”.
This new bill would undermine this positive work. The “work for benefits” scheme contained in the legislation would force long-term unemployed people (disproportionately with disabilities, ethnic minorities and, increasingly, lone parents) to work for their benefits. This workfare scheme would oblige claimants to work for £1.73 an hour.
The government initially said the prime aim of the scheme was to offer work experience to assist people getting back into employment. Yet work experience schemes already exist on a voluntary basis, and a Works and Pensions Department study found evidence that workfare schemes do not increase the likelihood of finding work. Last week James Purnell, the work and pensions secretary, conceded that a central objective of workfare is to discourage fraudulent claims, yet benefit fraud is officially at its lowest level to date, with the investigation system successfully reducing fraud by 66% since 2001.
The bill also renews New Labour’s obsessional targeting of lone parents. As soon as a lone parent’s child reaches the age of three they will become a jobseeker and lose benefits unless they take part in work-related activities. This is despite the government acknowledging the widespread lack of both job opportunities and adequate childcare.
Privatisation dogma is also at the heart of the bill. Private companies and voluntary sector organisations are to be handed contracts for providing services to the unemployed, with jobcentres not allowed to bid. To date, 33 out of 34 contracts have gone to private sector companies, and so the reality is that the new contracts will be awarded to large private corporations.
These companies were attracted by the prospect of profit calculated according to the number of people they placed in work. Large-scale unemployment threatens their profit margin and so they are frantically renegotiating the terms of the deal, insisting on at least double as much money up front. Despite this, and despite leaked reports showing the public sector outperforming its private competitors two to one in getting people into work, the government charges on bullishly with its privatisation plans.
The welfare reform bill is just another example of a government that has lost its way, a government increasingly cut off from the real world of unemployment and deepening insecurity.