Friday, 6 December 2013


Well, someones telling porkies. The ostensibly leftish Institute for Public Policy Research (IPPR) prepares a report advocating wholesale reform of benefits, training and education for young people with the stated aim of eliminating NEETs (young people not in employment, education or training). The IPPR are well connected. The report is flanked by puff pieces in both the leftish New Statesman and the right wing Spectator; it even gets a Guardian editorial in support.

Unfortunately the carefully crafted attempt to fashion a ‘debate’ in which the great and the good and the policy wonks were all agreeing with each other is rather knocked off course when the Daily Telegraph headline their report ‘Labour: We’ll scrap benefits for under 25’s’. That is crude and creates altogether the wrong impression. Labour’s new social security spokesperson, Rachel Reeves, is forced into a denial - to much gnashing of teeth from Blairite supporters of the report. Suspicion abounds that a Tory spoiling operation has deliberately wrecked the IPPR’s launch of a reasonable and progressive policy., actually. The Telegraph report was accurate. The IPPR report, coming from the heart of the Labour establishment (with no less than three articles in the New Statesman promoting it), fully warrants the headline. Rachel Reeves now says - or rather, tweets - that this is not her position. Polly Toynbee elaborates for her. Good. Because the proposals in the report are truly shocking.

The report does make some valid points. It is cruel and outrageous that people of any age, but especially young people, are obliged to claim JSA and then forbidden to try any form of training or education to improve their prospects of work, or indeed just to improve themselves. Instead they are required to undertake an endless, pointless search for jobs that either aren’t there or aren’t worth doing. It really is unacceptable that young disabled people find door after door closing in their faces as they try to get a an education, get laid, and do something useful and interesting with their lives.

Although it also has some curious omissions. Nowhere in the report does it ask why millions of young people in the UK and across the world can’t find work any more. What has changed? Nor does it ask whether there is any relationship between young people’s increasing poverty (a word that doesn’t feature in the report at all) and the burgeoning, blooming, exploding wealth of the world’s elites. Questions which might suggest some different answers.

But anyway, how does this sound for a solution? - let’s take all their money off young people and their families and give it to our friends in the government contracting industry. Doesn’t immediately grab you? The fairness, reasonableness and progressive nature of this proposal doesn’t leap off the page? Never mind, let’s wrap it up a bit.

And, fair dos, the IPPR do nice wrapping, or at least there’s a lot of it. Their basic proposals are:
  • a youth allowance, at a flat rate £56.80 a week to replace all income support, JSA and ESA for 18-24 year olds not in work, conditional on participation in purposeful training or intensive jobsearch. DLA or PIP and tax credits would be available as at present as well but not Housing Benefit in most cases. The allowance would be available to young people in further education as well as unemployed young people. However “given fiscal constraints and public scepticism about benefit expenditure” it would only be paid where parental income was less than £25,000 a year
  • a youth guarantee that, within six months, they will be provided with further education, vocational training, paid work experience or paid training. Deep in the technical bits of the report that no-one reads one discovers that ‘paid’ here means  £2.68 an hour, the ‘minimum wage’ for young ‘apprentices, or £67 for a 25 hour week. All accompanied by ‘intensive jobsearch’. All compulsory. Fall out with someone, miss an appointment and there’s nothing.

But given the grand ambitions the report claims to aspire to - no more NEETs - when you actually examine it, it’s all a bit vague. There’s supposed to be a guarantee of something but it’s not quite clear what. Faced with this, one approach to understanding what’s going on is to follow the money.

For instance, under the last Labour government one of the things they did that actually worked to a degree was the introduction of Education Maintenance Allowance (EMA) - paying young people a bit of real, extra, money - up to £30 a week -  if they stayed in education or training. How do we know this worked? Because young people, who have been asked about none of the IPPR’s proposed changes, said so. Withdrawal of EMA was one of the very first acts of the Tory government and first on the list of complaints in the riots and student protests of 2011. For EMA, the money went from government, direct to young people - and it helped, as money does.

In this case the whole programme of training and forced labour the IPPR proposes, and which partly replaces EMA, is to be funded by:
  • removing the additional components in young disabled people’s ESA - typically £43.35 a week - and its replacement by the proposed youth allowance of £56.80 only
  • removing all extra elements in young parents’ income support or JSA beyond the basic £56.80 - typically £14.95 a week
  • removing all benefit entitlement - the new youth allowance, housing benefit, everything - from young people under 21 whose parents earn over £25,000 a year between them.

So the money comes from young people, especially young disabled people, and their families.

Unsurprisingly the report doesn’t explain itself as bluntly as this but all these proposals are there. In addition, says the report, there would be further savings from a ‘shakeout’ of present income support and ESA claimants faced with ‘full conditionality’. In other words some young people with an illness or disability, or with children, would not be able to cope with demands for full time training, education or work experience and would drop out of claiming. What would happen to them? Why does this not amount to creating even more NEETs? That is beyond the ken of the IPPR, and therefore beyond all human knowing.

The total savings from these proposals are estimated at £1.97 billion (you won’t see this figure in the report just its constituent parts, possibly because the IPPR can’t add up but, not to worry, I’ve done it for them). That’s the amount at stake then, the amount which it is proposed to take away from young people and their families. Where does this money go to?

Some of it appears to go back to different young people - young people from low income families in further education, after their 18th birthday. But this is sleight of hand. Buried deep in the report (pp.40-41) is the proposal that when any young person begins to receive the youth allowance of £58.60 a week, their family will cease to receive child benefit and child tax credit for them. Amounts of child tax credit and child benefit can vary but in the majority of cases will be more than the £58.60 youth allowance, sometimes a lot more. So an apparent generosity, of which the report’s promoters make great play becomes a trap which will plunge more families into poverty.

If the claim that money is being re-routed to young people in education is bogus, what is it actually being spent on, under the IPPR’s plans? On the Youth Guarantee it seems. Who would provide the things that are guaranteed under the Youth Guarantee? Training, jobsearch, work experience, that sort of thing? Well, the IPPR a very keen on getting local authorities involved in co-ordinating here. Co-ordinating, yes but local authorities don’t remotely have the means or resources to actually provide all this. Who would actually provide the services that are guaranteed under the Youth Guarantee and get the money for doing so? Well, you know, colleges could do some of it, erm,  employers might,  erm ...


Silence is always suspicious. There is scarcely a word in the 50 pages of this report about the existence of an entire industry of government contractors - ATOS, Capita, A4E and the like - who thrive on these sorts of contracts. Funny that, because it was the IPPR who recommended the changes which resulted in the last Labour government’s  New Deal programmes which provided the point of entry into the warm embrace of state funding for these sorts of company.

So a Labour friendly think tank produces a report, promoted in Labour friendly media, which advocates a further massive cut in young people’s benefits and transferring most of the money to the private companies who got their first big contracts under the last Labour government. They fail in their initial attempt to bounce Ed Miliband’s Labour into supporting their proposals and get a fit of the sulks.

But this is an ongoing project and an ongoing battle. There is a lot of money to be made from welfare reform and the think tanks, consultancies and policy experts sense a change of regime coming. Expect to hear more of this type of proposal as the next election approaches. Don’t expect to hear from the millions of people whose lives are wrecked in the process - unless we get organised to make our voices heard.

Originally published 23rd November 2013 by Welfare News Service