Unemployment

Much ado about the Guardian's scoop this evening: a leaked Treasury document which forecasts that up to 1.3 million jobs could be lost as a result of the spending cuts in the Budget.  Or, to put it in the words of the document itself: "100-120,000 public sector jobs and 120-140,000 private sector jobs assumed to be lost per annum for five years through cuts." You can expect Labour to get stuck into these numbers, and the fact that they were previously hidden from public view, with no uncertain relish.  Ed Balls has already described them as "chilling".  But it's worth making a couple of points, by way of context: i) There's job creation too. The Guardian goes onto report that "The Treasury is assuming that growth in the private sector will create 2.

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.

Expect Labour to make much of today's employment figures, which show that unemployment fell by 7,000 in the three months to last November.  Already, Yvette Cooper has claimed it as a success for "government investment".  While Gordon Brown will surely repeat that message in PMQs. But is it really testament to government action?  Or is it a result of a naturally improving economy (which, let's not forget, is taking longer in the UK than most other developed nations)?  Well, a study commissioned by the Spectator from Oxford Economics found that Brown's "investment" would "save" around 35,000 jobs in 2009 – but then destroy considerably more jobs from this year on.

This afternoon Jim Knight MP, the minister for welfare reform, proclaimed that the Government wants to turn the Jobcentre Plus network into a careers service for everyone. He said that welfare advisers, who currently try to help get people on benefits back into work, will start to “provide opportunities for progression” for anyone in a job – no matter whether the person is a banker or a bin man. This is a bad idea for a simple reason: it is far more important to help the unemployed back into work than give assistance to people who already have a job. The longer that someone is out of work, the worse their chances of getting back into it.

The Guardian reports this morning that, “One in five – two million – British children now live in households where neither parent has a job.” This is an incredibly worrying statistic. The evidence suggests that worklessness is corrosive and soul-destroying. A child growing up in a workless household will, for obvious reasons, tend to have limited ambitions and opportunity. Obviously, as the economy recovers this number should go down — the recent rise indicates that many of these parents have been laid off in recent months. But even before the credit crunch really kicked in, there were more than 1.8 million children living in workless households.

It's noteworthy enough when David Blanchflower - a member of the Bank of England's MPC until May this year - says that the government "isn't doing enough" to stem the unemployment crisis, as he does in an article for today's Guardian.  But his more specific points about the "lost generation" of unemployed young people are also worth highlighting. As Fraser blogged yesterday, this recession is taking a particular toll on those aged under 25.  Partially, this is down to school and university leavers being unable to find work.  But, as Blachflower points out, there's another effect at play - young people with jobs are the first in line to lose them, as firms make redundancies: "A policy of last in, first out is also operating.

Anyone listening to Lord Mandelson’s claim this morning that the Brown stimulus saved “at least” half a million jobs would have smelt a large, whiskered rat. The Treasury has tonight told The Telegraph that the 500,000 figure was a maximum estimate, not a minimum as Mandy claimed. Your baristas here at Coffee House have asked the Treasury to show us their study – not available, it seems. So we have submitted a Freedom of Information request for it. While we all hold our breath, it’s worth looking at this claim in more detail because it is a Brownie we are highly likely to hear again.