Unemployment

Dressed with his effortless prose, Matthew Parris has a point (£) that proves why he is the leading commentator of the last two decades. Housing benefit reform is his subject and he urges his readers reject the legends that have accrued around the issue - not Boris, not Polly Toynbee, not shrill councils, not rapacious landlords and definitely not the government. No one, he says, has the numbers but there are several certainties: ‘The outcomes may not prove nearly as brutal as this week’s predictions. What (as I asked above) can we know? We know that comparisons with Paris are ludicrous. All of our big cities are speckled with very large-scale “social” housing of a type that is suited only to the income groups for which it was constructed.

This is the next of our posts with Reform looking ahead to the Spending Review. Earlier posts were on health, education, the first hundred days, welfare, the Civil Service, international experiences (New Zealand, Canada, Ireland), Hon Ruth Richardson’s recent speech, selling the case for cuts to the public and how to deliver retrenchment.  (And the next subject, defence expenditure, can be found here) The debate over spending cuts was taken out of Westminster to the ex-mining constituency of Cannock Chase, Staffordshire on Friday. For “Can Cannock Cope? Showcasing local champions and public sector reform in Cannock Chase”, Reform assembled heads of local public services and business leaders in front of an audience of 100 Cannock residents.

This is the fourth of our posts with Reform looking ahead to the Spending Review. The first three posts were on health, education, and the first hundred days. What is the budget? The welfare budget must be at the heart of the debate on how to restore the public finances. The Government spends more on welfare than anything else. In 2009 the bill for social protection was around £199 billion. This has almost doubled in real terms over the last 20 years from £104 billion in 1989. Social protection now represents 32.5 percent of all government expenditure or 14.2 per cent of GDP. Some welfare spending varies with economic conditions, with increasing unemployment, for example, leading to greater expenditure on assistance to support people back into work.

Sometimes hope lies in the details. Take this morning's press release from the DWP, for instance. On the surface, it is a response to today's encouraging employment figures. But what it really is is a new way of approaching the problem of worklessness in this country. And all because of its headline: "Figures reveal five million on out of work benefits as Grayling pledges to make work pay." This is, as far as I can remember, the first time that the total out-of-work claimant count has reached the summit of an official release. The last government always knew what the figure was, of course, but never drew much attention to it. Instead, we heard Brown mumbling on about "3 million new jobs," while wilfully ignoring the millions who had been overtaken by globalisation.

David Cameron’s Big Society re-launch continues after his American interlude. Today, he will introduce the national citizens’ service for 16 year olds, which was famously backed by Michael Caine during the election campaign. There is no military element to this national service; the aim is to unite different communities, ages and classes. As a leader in the Times puts it: ‘The bold aim is to turn a summer of potential drift and disaffection into one of purpose for youths from different backgrounds, working together to help people worse off than themselves, under the wing of various charities and social enterprises; and thereby, perhaps, to lay the ground for a less dislocated society in the future.

So much of the welfare debate is lost in jargon and the numbingly large and depressing numbers. John Bird, founder of The Big Issue, has just been on The Daily Politics and he condensed the specious waffle into plain but evocative sound bites. ‘You don’t have a broken society without a broken system. The usual suspects come in and advise Blair, Brown and now Cameron that what you need is money for the poor. The poor don’t need more money; the poor need more opportunity.’ Bird admitted that prison made him upwardly mobile. He left it being able to read, write and paint, and was given the confidence to pursue his entrepreneurial instinct.

Forget the hubbub about Gove's schools list, the most damaging story for the government this week could well be on the cover of today's FT.  Alex Barker does a great job of summarising it here. But the central point is that the Office for Budget Responsibility changed its forecasting methods just before the Budget, with the effect of reducing how many public sector jobs would be lost due to the government's measures. This isn't damning on its own: statisticians constantly tweak their forecasting methods. But when you consider that the OBR's new methods incorporated policies which haven't even been announced yet (including one which pre-empts the findings of John Hutton's pensions commission), then it starts to look more dubious.

In the midst of this ongoing row about employment numbers, it is worth noting that the OBR figures released today show that there’ll be 610 thousand fewer public sector jobs at the end of parliament than there are now. But the overall number of jobs in the economy will increase by 1.34 million. This means there’ll be 1.95 million more private sector workers at the time of the next election. As I wrote in the magazine last week, one of the aims of the Budget was to shift employment from the public sector to the private sector. The OBR’s numbers show that the Budget should do this. There are, at least, two reasons why Osborne wants to do this.

There’s nothing quiet about Iain Duncan Smith this morning. Echoing Norman Tebbitt’s infamous ‘On yer Bike’ comments of 1981, Duncan Smith has vowed to obliterate ‘welfare ghettos’. For once I agree with Ed Balls: Duncan Smith is going further than Tebbitt, much further. The government is planning to move the long-term unemployed out of sink estates and into other areas, possibly hundreds of miles away, where unemployment is negative. Incentives for work and promises of low regional taxes in Northern England, Wales and Scotland were included in the Budget to this effect. This may be manna from Heaven for Balls - the traditional candidate in the Labour leadership contest can evoke the spectre of Thatcher and ‘give us a job’.

Is Frank Field back? The Labour MP has spent much of his life talking about the poor. Judging by reports today, he might be offered a job chairing a commission on child poverty. This is good news but, as Mr Field has already said, there is not much point in him debating the finer points of poverty definitions. He would need to be given remit to suggest policy. What should those suggestions be? First, he should argue that we need to be a lot less self-indulgent about how we think about child poverty. It may be great to think of ourselves as tackling a major social ill, but the past government’s approach was not nearly as successful as it or its supporters liked to think.

Contrary to what you might think, it is actually quite hard to find someone on benefits who doesn’t want to work. When you ask a claimant whether they would like to, they will invariably say “Yes, I want a job.” At first, this seems like a strange answer: why do we have nearly 6 million people on benefits when so many of them want to work? The answer is simple when you ask a few more questions: they don’t want just any job. They envisage doing what they used to do or would like to try – but aren’t willing to look for anything else. Getting them to try any job in order to be in employment is the key issue for any party that wants to cut the welfare rolls.