If elected to power in 2015, Labour have said they will guarantee jobs for the long term unemployed. The scheme financed by restricting tax relief on the pensions of those earning £150,000 a year should cost according to Ed Balls, £1Bn and would be targeted at long term claimants over 25 years old. This comes a week before Labour plan to oppose proposals to cap a rise in benefits to 1%.
Any attempt to address unemployment should be welcomed, however I have reservations with this scheme as providing an incentive for businesses to take on unemployed people as staff fails to address issues that are often the central factor in unemployment that people lack the skills or inclination to be in employment. What is to say that this scheme will create long term jobs? It may be a cynical approach but I feel that the incentive to provide a job may fail to create full time meaningful employment opportunities. What is to say that businesses will not simply take unemployed people on a cyclical basis to have a subsidised member of staff while not actually helping people into employment.
Another concern I have with this policy is my belief Labour are playing to the crowd, the unemployment rate is lower now than when Gordon Brown was Prime Minister the current approach by the coalition government seems to be reducing unemployment.
A lack of experience often hold back those who are seeking employment, and if I remember the furore that met the Coalitions back to work scheme this scheme is very similar aside from the pay element. I would be very interested to hear your opinions on Labour’s proposal.