A sad day for welfare

July 4, 1997

I TURNED with interest to Richard Layard's prescription for the unemployment problem (THES, June ).

As your analysis rightly points out, Professor Layard has been in the background of the welfare reform debate for the past 15 years, always subscribing to the opinion that the unemployed are, somehow, responsible for their plight. Indeed, Layard argued in the early 1980s that the jobcentres, instead of offering help to jobseekers, increased long-term unemployment by reducing sanctions against the "workshy".

Layard's solution to unemployment, as ever, was a combination of active labour market policies (workfare) and a means of inducing (or bribing) employers to take the unemployed through a wage subsidy. Employers would have it both ways, the stick of state coercion and the carrot of cheap labour.

Layard argued that such an approach would prevent inflation, but even the Conservative-dominated, House of Lords select committee on unemployment, in 1982, saw through this panacea arguing that the substitution "risks" of this approach were "too great" and anyway "any incentive to employers to increase their workforce artificially would run counter to the country's long-term interests".

Despite this rebuttal, Layard's ideas appear to have gained popularity and are now dressed in the new Labour language of "active help". It was no surprise then, that the guru claimed in The THES that the current UK welfare system allows people to scrounge off the state and "live in a grey kind of existence" - all at the expense of the taxpayer. It was also no surprise to learn that Layard has been drafted into the Blair machine alongside the likes of Geoff Mulgan and Frank Field, who also hold the opinion that any form of welfare assistance creates a "yob culture".

It is a sad day for employment policy when Layard's ideas are allowed to dominate the debate. There is no evidence that the unemployed are necessarily workshy or require policing and compulsion. Has Layard ever left the safe enclosures of economic modelling and read any of the recent Whitehall reports on jobseeking, or actually spoken to the unemployed? Most of them want jobs with prospects.

Instead of spending the windfall tax on compounding an employer-led, low-skill equilibrium, the "welfare-to-work guru" should design long-term policies which encourage growth in the right sectors. Why, for instance, are only 1.5 per cent of modern apprenticeships - the existing "high-skills" route for 18 to 24-year-olds - delivering trainees in information technology and telecommunications, at the same time as 13 per cent of MAs are in business administration, 7 per cent in hairdressing and 6 per cent in hotel and catering? We need life-long learning not short-term NVQ-style, churning. Attacking welfare is not the solution.

Martin Jones

Research fellowUniversity of Manchester

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