Fabian's Blog

The cost of the Coalition's cuts are too high for jobs....

Thursday 24th June 2010 2:16 PM

So much for 'progressive austerity' and 'fair' cutbacks to public expenditure. What we have heard up to now is a programme of cuts that is going to deal a devastating blow to the jobs market. We all know about the potential rise in unemployment caused by the cutbacks - the Chartered Institute of Personnel and development recently predicted a rise to close to the 3 million mark with 'no significant reduction' until at least 2015. While increasing the demand through attacking the public sector this government is also failing on the supply front: the Centre for Cities recently warned of a growing crisis in private sector job creation. In Yorkshire alone, as the Yorkshire Post reported on 6th June, this equates to a jobs 'deficit' of over 69,000.

It is hardly surprising that this 'deficit' exists when you consider the first victims of the Coalition's cutbacks were job creation schemes which the previous government introduced. Young people in particular have fallen victim to the Coalition's 'slash and burn' cutback mania. The Future Jobs Fund was one of the first things to go and before people dismiss this then they should look at the statistics: for example, between October 2009 and January 2010 alone 8,660 benefit claimants started a job created by the Future Jobs Fund. The ambitious goal of the FJF was to create 111,000 jobs by March 2011 but the Trades Union Congress estimates it could have created as many as 205,000. Many of those new jobs would have also been in so-called 'green industries' and would have helped to undertake the necessary structural remoulding of our economy.

Connexions, the service that offered not just career but also crucial health and emotional support to younger people, also looks set to suffer as its grant from the Department for Education is cut. Austerity for the Conservatives and their Liberal Democrat partners means mortgaging the future of our young people. People who criticise these programmes for so-called low returns fail to take account of the social implications of a high number of long-term unemployed both for wider society and the individuals involved and really they should consider the positive impact that having a job will have had on the lives of all those who benefitted from the Future Jobs Fund.

Pathways to Work, a scheme looking to encourage people on incapacity benefit into the workplace, has also fallen under the axe. Despite the criticism, there was a reduction of the numbers on incapacity benefit between 2006 and 2009 from 2.76 to 2.63 million. Obviously, the issues facing people on incapacity benefit are complex; for example, an estimated 40% of those claiming the benefit are affected by mental health issues. Complex problems require complex solutions, (for example, tackling the root causes of people's incapacity), however, at least Pathways tried to tackle the problem in a positive way through job creation.

The current course of this government is one that will exacerbate long-term problems like youth unemployment, because its zeal to drive through cuts is not as it claims to be guided by the 'economically rational', but is in fact the product of its ideological zealotry when it comes to reducing the role of the state. Making more people redundant and cutting back job creation is a noxious mix which can only ensure the 'Big Society' is one that is scarred in exactly the same way whole communities were in the 1980s. The Labour Party will strongly oppose this and will argue that the right way to reduce the nation's debt is certainly not by using the 'scorched earth' tactics employed on the Coalition Government benches. Rather, it is through investing in people, ensuring they have the right skills and showing the unemployed that work is always the best option which will ensure that the recovery gathers strength. Slashing the public sector now will only create a downward spiral from which it will be much harder to recover and the by-product will be ever-deepening misery for those thrown on the scrapheap with nowhere else to turn for properly remunerated work.