There’s no epidemic of laziness. People desperately want to work - but here’s what’s holding them back
Creaking transport and sky-high childcare costs conspire to keep the young and not so young out of employment
Keir Starmer is about to be exposed, yet again, for a failure to think big. This week, Alan Milburn’s long-awaited report into why there are so many young people out of work and education will finally be published. He has already described to the press that he found a “system failure”, which leaves £25 spent on benefits supporting jobless youngsters for every £1 allocated to programmes to boost their chances of finding sustainable work.
Milburn, previously a cabinet minister in the Blair years and election advisor to Labour, praises the efforts Starmer has made this time round on education and health and the promise of a youth work guarantee. But his diagnosis will be damning: he says the support system for workers in early adulthood needs a complete reset.
The headlines will be dominated by a debate over what that “reset” should mean for welfare and benefits. There are some stark findings in the report, particularly around the link between disability benefit claims and long-term exclusion from work. Of those who claim a personal independence payment (PIP), for example, only one in four are in work by the age of 24. Being out of work in that crucial time period is known to be linked to lifelong worklessness.
The report also highlights that those who can and want to work (acknowledging some disabled claimants never will) could be put off getting stuck in because of the huge drops in income - up to £2,000 a month that can result when they transition into paid work. This is because there is a “cliff edge” where rising earnings mean entitlements slip away, even if a job is only temporary. Nobody would put themselves through forcible impoverishment. As the report will explain: “There is almost no intermediate step - no gradual build-up, no trial period that genuinely removes the fear of losing everything if a job does not work out.”
Those who say this is a failure of government policy are absolutely right, but this week you’ll sadly hear more noise from those who are wrong, with their diagnosis of a pandemic of laziness and a cultural tolerance of welfare dependency.
What’s not being discussed at all is how young people are the hardest hit by huge external barriers to employment, however hard they want to work. Take transport, for example.
In major cities like London this is easily overlooked, but for most areas of the country the lack of reliable, affordable transport is a huge infrastructure burden on working age people.
Car owners have higher levels of access to employment, but according to a parliamentary review of local transport published late last year, 22 per cent of households do not have access to a car: 40 per cent of those are low-income homes - the ones in most need of connectivity.
Lower skilled jobs themselves often require car access to out-of-town locations, but even the town centre roles are hard to reach when bus services have suffered route cuts of between 50 per cent and 80 per cent in less than 20 years.
Fifty-seven per cent of working-age people in England live in areas where it’s very hard to access a workplace within 45 minutes using public transport. Young people between 16 and 24 have the lowest car access among the population, and the cost of running one is rising weekly as geopolitical crises hit fuel costs at home. Meanwhile women and girls also reported they had not pursued some employment or training options due to safety of transport available to them. More than a third of women surveyed by the British Transport Police say they have been sexually harassed or abused on a train,
People do want to work. Lord Wolfson, the boss of Next, shared this week that his firm now receives 19 applications for every shop-floor opportunity, twice the number filed a handful of years ago. That’s not the sign of a nation that’s given up and taken a collective duvet decade. There are fewer jobs available, but people are clamouring. What if it’s not the welfare infrastructure that’s the biggest barrier to greater youth employment, but the way the rest of our infrastructure is failing too?
As you climb up the age brackets, new infrastructure problems arise. At the last election, both the Conservatives (still the official opposition, we must remember) and Labour committed to improve access to childcare by fully-funding 30 hours of term-time childcare per work for families with two parents in paid employment. But the funding provided has failed to keep up with the real costs of staffing nurseries effectively and the business costs of keeping them open in a cost of living crisis.
What happened next was entirely predictable: some smaller nursery settings closed, others ratcheted up their costs, often multiple times within the same year, putting huge pressure on already tight family budgets. Many have used “add on” costs to bridge the gap, which include payments for meals, nappies and other sundries are high prices. Some are now refusing to admit pre-school age children because the funding for that age group is lower, leaving parents with a year to cover between nursery and school age. Cheaper settings, including childminders, are also closing in record numbers.
Childcare is economic infrastructure. When the cost of working becomes too high, or childcare is too hard to find, it is impossible for two parents to sustain employment. Sky high rental payments (the average first-time buyer is now 34, and the average first-time mother is 29, so first children are often born into a private rented home) add to universal credit claims when two parents can no longer meet nursery fees.
Education Secretary Bridget Phillipson has this week written to the Competition and Markets Authority asking them to investigate the fees that nurseries are charging parents. The government wants costs reduced for parents, but the only way it can do this is find more money of its own to subsidise at a higher rate. Parents feel connected to their childcare providers; they trust them with the most precious thing in their own lives every single day. Phillipson may soon find they are on the side of the struggling staff, fighting to keep settings open in an impossible situation where every cost they incur is rising.
Starmer’s announcement of a handful of summertime cost of living measures, including reduced cost family days out, were a nod to the challenges that young and mid-adult voters are facing. Yet it has a touch of Rishi Sunak’s covid-era ‘Eat Out to Help Out’ about it: it sounds great in a speech, but doesn’t make much difference (though it could make things worse for the government). Those policies touch everybody but speak to nobody. For those trying to find £1,700 a month in nursery fees for two children, a day out isn’t going to make a lot of difference. If you can’t afford to feed your children, you’re not spending money on a day at the zoo.
The crisis in employment might be pinching our young people the hardest but its fingers are on everyone’s skin. When there are 19 good quality applications for every single shop job, we are all suffering. Milburn’s report is a useful starting point for a conversation that needs to be much bigger. The “system reset” we need isn’t just about benefits, disability and job services, it’s the way our whole economy operates. Burnham needs a big vision to challenge Starmer - one that’s wide and deep enough to take in everything that’s stopping us working and living the way we deserve. ■
About the author: Hannah Fearn is a freelance journalist specialising in social affairs. She was comment editor of The Independent for seven years, and has previously worked for The Guardian, Times Higher Education and Inside Housing. She has a special interest in inequality, poverty, housing, education and life chances. Zoë Grünewald is away.
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Hannah you are so right. Part of the problem is there is no vision, no joined up thinking and quit frankly no thinking at all by our political classes. They are like headless chickens in the absence of real leadership.
Take Starmer this week. All we needed to hear was that our Police force will be ordered to put the care of a man lying on the floor to be put first! And to put those Police officers on immediate suspension and sack the Hampshire commissioner for that poor response. It’s called leadership! Do bloody well lead Kier.
But I digress. Hannah what you have written is the truth. But it’s a symptom and not the cause.
The true cause of our nations crumbling fabric is a lack of money. In particular a lack of tax take. Insufficient money is being earned by our economy. So our successive governments have been underfunded.
Yes, government can make better choices and stop the haemorrhaging of money but even that’s not the real problem. For example the selling off of all our utilities have caused our government to miss out on all that profit over the last 40 years! And when our Banks went bust in 2008 why did we give them back! We should still be receiving the profits from the ones we all bailed out?
But even so, it’s still not the crux. The crux is that the puny tax take by our successive governments has been insufficient for decades because our own commerce that drives the productive economy is underperforming because it too is underfunded on a daily basis NOT because there isn’t enough money out there. It’s because that money isn’t being SPENT in sufficient amounts to give the real amount of taxation we all need! It’s all about cash flow and its velocity.
There is apparently £19 trillion pounds Sterling out there in the aether. ( this amount has to be based on population numbers and need).
If all that money was to be SPENT just once, not many billions of times, just once in one whole year, nit in one day but one year, it should bring in £3.8 trillion pounds in VAT alone!!!!!
Hannah, we only take £1.1 trillion pounds from ALL taxation now. Our government spends around £1.5 trillion pounds and clearly as your piece here clearly shows that spending is insufficient.
Because our economy is underperforming because the turnover of money is insufficient! Not because it’s not out there, it’s simply because it’s not being SPENT by those holding too much of it UNSPENT idle unused and hoarded outside our daily productive economy.
As money goes to the rich, as they get richer, we all get poorer as a result. As money gets sidelined by Banks and wealth and pension funds or by banks abroad that effect takes trillions of pounds out and away from our daily economy. It gets sidelined and unused and unspent.
This imbalance has caused our economy to be underfunded.
So much so that we have to borrow so much money that we should have been paid and received in our economy. And who do we borrow it from? The very people who are allowed to keep hold of money forever it seems!
For the last 26 years our government has treated the economy like a household budget so they too have been doing the same! Borrowing back money that should have been freely SPENT back without the cost of borrowing.
This has lead the rich who hold this money and lend it back to get even richer from NOT SPENDING it back so they don’t.
Unspent money isn’t even taxed! There is no tax on unspent money.
And when you consider the misunderstood tax system you can see another missed opportunity.
Taxation, all taxation is triggered by SPENDING.
When an employer SPENDS on the wages of an employee, income tax and NIC is paid. When we SPEND money VAT and duty are triggered. And when we are told to SPEND on tax it too is paid. Council tax, car tax, inheritance tax are just that.
So if our government gets more tax the more our money is SPENT then wouldn’t you think then, that’s the way to GROWTH!!!!???
We need those people who hitherto haven’t SPENT their money to start SPENDING it! We do! Must if us SPEND all our money each month. We have to just to survive. The majority are held to ransom by the few who withhold money from our daily productive economic goose that lays the golden eggs!
This clusterfuck is a direct result of brain dead politicians. Who obviously lack the vision the ability and the knowledge to run a nation. And those advising them are similarly inept and our civil service are misled and misleading all at once.
Whether we like it if not. Money has to return constantly via SPENDING. Money isn’t for keeping. Stuff you buy with it is for that. We all have to fairly exchange money to exchange work for work. So it’s a double sided contract. The rich are able to keep money and not return it, not to change it and that makes us devoid of it.
Ironically if it were to be spent then we can all be richer from all that tsunami of SPENDING.
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