I can’t fault the sentiment contained in a piece which has appeared under Andy Burnham’s name this morning about the crisis of having a million young people not in education, employment or training (Neets), and what the government plans to do about it. Writing in the Times, the Prime Minister or his ghostwriter has it spot on with the words:
Today, the welfare system provides an assessment, a payment and after that, a goodbye. Too often there is no support, no offer of skills and no opportunity to get a job.
The piece goes on to hint that welfare benefits will be slashed for young people who rather enjoy the benefits system as it is and don’t want to play ball. It doesn’t, however, quite spell this out, merely saying that new opportunities will be ‘matched by an expectation that young people will take up the opportunities made available to them’.
Burnham has the same set of MPs who crushed Starmer’s efforts to trim the ballooning PIP bill
We have, of course, heard this sort of thing many times before. Pretty well every government announces it, but the benefits bill continues to mushroom. What should make us fear that the same will happen this time?
Firstly, that Burnham has inherited a government which, under his predecessor Keir Starmer, seemed determined to do all it could to deter businesses from creating new jobs for young people. We had the hike in Employers’ National Insurance Contributions, which was especially harsh on people who employ large numbers of part-time staff, as it lowered the threshold at which contributions become due from £9,100 a year to just £5,000. The result was that the growth in employment which had been evident until Labour took power was reversed, with 178,000 payrolled jobs lost in the 12 months following Labour’s election victory.
Then we had the Employment Rights Act, which makes it much harder for businesses to get rid of employees who turn out to be unsatisfactory. That means fewer businesses are prepared to take the risk of taking on young people without an employment history. Labour also has a manifesto commitment to do away with the lower bands of the National Minimum Wage for workers aged below 21 and so to pay every adult the same, regardless of age. That would remove the incentive for employers to take on young, untrained employees.
Burnham tells us that every young person ‘will be guaranteed a high-quality technical pathway’, but who is going to be offering those opportunities given that high energy costs are destroying the industrial sector? Ever since Harold Wilson, Labour prime ministers have been trying to bask in the ‘white heat of technology’, but there is not much white heat being produced in our blast furnaces any more.
The other question is whether Labour’s backbenchers will let Burnham undertake any reform which cuts benefits. The Prime Minister may consider himself a new broom, but he has the same set of MPs who crushed Starmer’s efforts to trim the ballooning bill for Personal Independence Payments (PIP) by a modest £5 billion. If they wouldn’t let him call a day on the PIP scam, what is the chance they will vote for a much more serious round of cuts or any kind of compulsion on young people to take up work experience placements?
I rather fear this will end up like so many initiatives before it: with a few half-hearted work placements ending in even fewer permanent jobs and little interruption in the growth of the benefits bill as ‘compassionate’ Labour MPs refuse to do anything to take away the welfare punch bowl. Burnham is going to have to work pretty hard to achieve a better outcome.
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