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Issue of the day: Welfare to work
Party spokesmen debate their plans to reform the welfare state.
Labour: Work and pensions secretary Alan Johnson
When this government entered office in 1997, unemployment had reached three million, the numbers on Incapacity Benefit had trebled since 1979, and long term youth unemployment had topped 300,000. The number of people written off on Income Support had also doubled since 1992; one in five families had no-one in work and one in three children were growing up in poverty.
Moving people from welfare to work therefore became an immediate priority, and is one of our greatest success stories. Employment now stands at record levels and unemployment at a 30 year low. There are two million more people in work than in 1997: Britain is working again.
This success has been possible through our transformation of the welfare state. We have created an active system, built the principle of individual rights and responsibilities, and are ready to meet the challenges of the 21st century. We are now able to deliver help and support tailored to the specific needs of those groups that were previously excluded from the labour market such as the disabled, lone parents and those from ethnic minorities.
The creation of Jobcentre Plus lies at the heart of our strategy. For the first time, we are able to deliver integrated benefit and labour market services in one place for all people of working age.
We have achieved a lot, but we still have more to do, not least in tackling inactivity. The employment rate for lone parents has already increased by nine percentage points to 54 per cent, and the numbers of people flowing onto incapacity-related benefits have now peaked.
Britain is now a world leader in delivering people from welfare into work, enabling the greatest number of people to realise their potential and reducing the huge social and economic waste of unemployment.
Conservatives: Shadow work and pensions secretary David Willetts
Much of the government's increase in spending has gone to the New Deal – Labour's flagship employment policy. Ministers claim the New Deal is a great success story but that assumes nobody would have got a job but for the New Deal. The New Deal has cost over £4.6 billion so far, and, unfortunately, it has not had a significant affect on helping people into sustained jobs.
Over a million people have now left the New Deal for Young People but of these, only 38 per cent have moved into sustained unsubsidised jobs. The government assume that 13 weeks in work counts as a sustained job. A far higher proportion of young people leaving the NDYP return onto the benefits system or disappear altogether to 'unknown' destinations. The record of the New Deal 25+ is even worse – just 23 per cent of those leaving the programme go into sustained jobs
The increase in Incapacity Benefits claimants has been one feature of the much larger challenge of the rise in economic inactivity. Ministers have so far largely ignored this area despite the scale of the problem. In total, almost eight million of working age are now economically inactive.
We welcome the fact that official unemployment is down, but the New Deal has proved an expensive failure.
There is a better way. We would replace the New Deal with new schemes operated by organisations that have detailed knowledge and experience of helping the disadvantaged to find work. We would create incentives for both the voluntary and private sectors to take over the delivery of employment services. We would offer far greater flexibility than under the New Deal, allowing contractors to give the help they feel is best to meet the needs of each jobseeker.
A priority of these new schemes would be to offer more help for the disadvantaged. Disabled people and lone parents would be given particular encouragement to move into work. We want to make sure that we help people into jobs that are genuinely sustainable and that last.
From a job can flow a structured life and greater skills just as much as enhanced income or self-esteem. Our approach would give people these opportunities.
Liberal Democrats: Work and disability spokesman Paul Holmes
With the launch of the first of the New Deal programmes in 1998, Tony Blair pledged "to break a culture where people think there is no hope and they have no prospects in life". The New Deal has largely failed to achieve its aims. Less than half of New Deal leavers have achieved sustainable employment, and those with the greatest barriers to employment are receiving the least funding.
We cannot afford to continue to ignore the plight of those who face the greatest difficulty in gaining work, including the 1.2 million disabled people who want to work. It is unjust to them, and is an appalling waste of the nation's human capital.
The Liberal Democrats would develop a more flexible and intensive programme to help those experiencing severe difficulties gaining employment, particularly disabled people, lone parents, ethnic minorities and the over-50s. Individual Work Scheme advisers would maintain links with those jobseekers who are hardest to help, to support them during their first few months of employment.
Liberal Democrats would replace the New Deal's sanctions with incentives that encourage participants to abide by employment schemes, as has already been shown by work in some Employment Zone experiments.
When Blair promised to "break" a culture characterised by lack of opportunity, he embarked upon an aggressive and ineffective welfare policy reminiscent of the disastrous 1834 Poor Law. Blaming the "undeserving poor" and the "feckless unemployed" for the reality of economic cycles, structural economic change and the "barriers" of disability was a Victorian mistake that both Thatcher and New Labour were wrong to copy.
The above texts are edited versions of articles which first appeared in The House Magazine.
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