Full employment first

Liam Byrne MP

Once upon a time, Britain was prepared to give the Tories the benefit of the doubt. They said they cared about poverty; they promised a welfare revolution and they pledged, ‘we’re all in this together’. Now, three long years on, the verdict is in: we have a cost of living crisis, a million young people out of work, long term unemployment at record highs, disabled people living in a climate of fear, child poverty up, inequality up, living standards hammered. What began with speeches in Easterhouse has ended with a the spectacle of a Tory minister, Michael Gove, attacking the poor for having the temerity to turn up at a food-bank.

We can’t go on like this. We need a better way. But let’s be honest. We won’t win the argument or build a new consensus with a promise to roll back the clock. The vast majority of people in this country believe the welfare state is one of our proudest creations. It is the proudest badge of a civilised society. But the vast majority believe the benefits system doesn’t work for modern times. If we want a new consensus as surely we must, then we’ll need a new system.

So we must be the reformers – reformers that stay true to our values. For the Labour Party, that has to start with work, ambition and compassion, dignity and duty. These are the ideals that make us different to the Conservatives. And these are the ideals which should inspire us to rebuild a 21st Britain as a country of full employment.

Our cardinal principle is this: full employment first.

The gains are simply huge. New House of Commons Library research has shown that if the UK were to its employment rate for the over 50s, mums and young people, to the levels of our competitors we could add £5billion to the public purse in direct taxes alone.

So what we need is a new blueprint for rebuilding our social security system for the 21st century. That means getting Britain back to work, better off in work, and properly insured for when things go wrong. As I set out in my pamphlet for the Fabian Society ‘The Road Back to Full Employment’, there are five radical steps we need to be taking.

First, we need to tackle the youth jobs crisis. This is not an impossible task – in Germany, the youth unemployment rate is nearly a third of ours. We need to transform the journey from the classroom to a career, with a new Fast-track to Work for young people, and create a gold standard vocational qualifications system, backed by a jobs guarantee like the future jobs fund, paid for by a tax on bankers’ bonuses.

Next, we need to address long-term unemployment – something that the Work Programme is miserably failing to do. So I think we need a radical new approach that recognises local government strength, transferring funds from the Work Programme to create a Local Works programme, organised by councils and jobcentres in the places where unemployment is worst.

That needs to be combined with a revolutionary guarantee that no-one need go jobless for more than 24 months – with two year time limits on JSA – restoring hope for over 120,000 long term unemployed – and backed by £1bn of investment. We’ll invest in chances. But we’ll insist too that people take them.

But we also need to make sure that families are genuinely better of in work. And that’s why a Labour Government in 2015 will take action to rescue Universal Credit, promote a living wage and improve childcare.

And finally, we need to ‘put the Beveridge back into Social Security’, with extra help for those who’ve paid in most and by learning the lessons from Australian-style comprehensive, universal insurance for disability.

More than fifty years ago, my hero Clement Atlee made his final broadcast to a war-weary nation hungry to win the peace. ‘We call to another great adventure. The adventure of civilisation. Where ‘all may help to create and share in an increasing material prosperity, free from the fear of want’.

As we finish our plans to rebuild social security – social security for a One Nation Britain – those are fine words to guide us.

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For a fuller exploration of the ideas in this article, read ‘The Road to Full Employment‘, a Fabian policy report authored by Liam Byrne MP.