A Land of No Opportunity

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Will cutting housing benefits and Jobseeker’s Allowance for under-25s really create David Cameron’s proposed ‘land of opportunity’, or will it just push young people into further economic distress?

David Cameron has revealed that his party’s manifesto for the election in 2015 proposes to tackle the problem of  ‘Neets’ – young people not in education, employment or training.  According to the prime minister, ‘we should give young people a clear, positive choice: go to school. Go to college. Do an apprenticeship. Get a job. But just choose the dole? We’ve got to offer them something better than that.’

In his closing speech in Manchester, the PM promised to create a ‘land of opportunity’ by boosting business and reducing reliance on benefits.  Unsurprisingly, public reception has been less than favourable towards the new proposals arguing that in the wake of an economic crisis, now is not the right time to be sweeping the safety blanket from under the feet of the worst-off.

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Given the government’s awful track record of helping young people find jobs, the prime minister’s threat to ban the dole for under-25s will simply push hundreds of thousands of young people, including those with young families, even deeper into poverty.

Frances O'Grady
TUC general secretary

Despite the prime minister’s assurances that benefits will not be taken away from all ‘Neets’, and that those really in need will still have access to them, trade unions have cautioned that any cuts would affect the most vulnerable. Also, taking benefits away from those out of education and unemployed is not going to help them get jobs if the jobs aren’t there in the first place. The idea of lowering income tax may be a nice one but many young adults, including graduates, are pointing to the lack of job opportunities in the UK.  With this in mind it is hard to see how taking money from those who are out of work will actually create jobs for them and realise Cameron’s dream of a prosperous Britain and opportunities for all.

Economic Recovery

Britain’s bounce back from recession was among the weakest in Europe with only Portugal and Greece having lower economic growth in 2012. According to figures, just over 1 million of 16 to 25 year-olds (20%) are without work in the UK whereas the unemployment rate in Germany stands at less than 10 percent. Young Germans stand a much better chance of getting a job than the British arguably because in Germany the economy revolves around an industrial heartland of medium-sized manufacturing firms that is well-suited for trainees, apprentices and interns which ultimately gets them a foothold on the employment ladder.  Surely Cameron’s proposals for the 2015 elections should focus on expanding industry and creating jobs if he wants to see such a ‘land of opportunity’?

Let’s take a look at the figures in the UK: according to the Office for National Statistics, between April and July of this year the number of people out of work fell by 24,000 to 2.49 million and in August the number of people claiming Jobseeker’s Allowance fell by 32,600 to 1.42 million, the lowest level since February 2009.  Britain’s recovery in the past year or so may be stronger than previously expected but the economy remains fragile and continues to be weighed down by weak trade and business investment. It doesn’t seem like the right time to be removing the safety net from the generation who we expect to help build up the economy.

 Educational underachievement costs the UK economy an estimated £22 billion a year. We will not resolve this massive problem by forcing young people into unstable, low paying employment or inadequate training.

Sally Hunt
General Secretary of the University and College Union

As it stands, the young and jobless lose their benefits if they work for more than 16 hours a week, so the system supports them if they are not working but stops helping them when they are.  Many are actually better off when they are receiving the benefits than when they aren’t and it is therefore not surprising that lots of under-25s, including graduates, want to wait for something better rather than just accepting any job that comes their way. The conservative party also run the risk of hurting young single parents, since they account for an estimated 40 percent of housing benefit claims by under-25s.

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David Cameron asks us not to see the new Tory proposals as ‘callous’, whilst Michael Gove, Secretary of State for Education, says ‘it is always going to be the case that there are some people for whom you need not so much a nudge as a dunt [a firm blow or stroke]towards the workplace.’

The good news is that the move is unlikely to be introduced before the 2015 election, because the Liberal Democrats have already blocked proposals by Tory ministers to curb Housing Benefit for under-25s. However, even if the Tories do get re-elected, it looks as though David Cameron and his party will have to do a lot more than cut housing benefits and job-seeker’s allowance if they want Britain to fully recover from the recent years of recession.

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