A conference organised in London by the TUC on July 5 heard a wide range of speakers stress the importance of job creation. David Hunt MP, then Employment Secretary, set out a five point plan, highlighting low inflation, enterprise and self-employment, low social costs, investment in youth training and help for the long term unemployed. TUC General Secretary, John Monks, said competitiveness cannot be achieved by low wages, low skills and low performance and called for a modern training levy, perhaps imposed on employers if the Investors in People standard is not met.
CBI Director General, Howard Davies, outlined a nine-point plan, including tax relief to encourage employer-funded childcare and anti-discrimination measures to combat high unemployment in minority ethnic communities. But he warned against damaging short-term expansion which would risk a return to high inflation. Contact John Richards, TUC, on 071 636 4030
OECD REPORT
The Paris-based Organisation for Economic Co-operation and Development published a report on the long term causes of unemployment in June, highlighting the plight of the 35 million people in OECD countries registered as unemployed along with perhaps another 15 million who have given up looking or are unwillingly working part-time. Its central message was that high unemployment can only be tackled by restoring the capacity of economies and societies to change and it set forth a 60 point strategy grouped under eight headings:
create and diffuse technological know-how
increase working-time flexibility
nurture entrepreneurial climate
enhance wage and labour cost flexibility
reform employment security provisions
expand active labour market policies
improve skills and competences
reform benefit system.
Meanwhile the OECD’s annual report, published on July 19, contained a special section on job creation which cast doubts on the ability of small businesses to generate significant numbers of new jobs. Overall, the UK had one of the lowest rates of new enterprise creation between the mid 1980s and early 1990s, but also the lowest rate of closures. Canada, Sweden and France recorded the highest business ‘birth rates’ as a proportion of all enterprises. Contact OECD on
LONDON UNEMPLOYED
The CBI’s London Regional Council announced on July 15 that it has set up a working party to address how to get the capital’s long term unemployed back into the workforce. Chaired by Ian Toombs of NEC (UK), its findings will form part of a national study to be discussed at the CBI Conference in November. Contact CBI on 071 379 7400
FLEXIBILITY IN WORK AND BENEFITS
Claims that an over-generous benefits system discourages unemployed people from taking up jobs are unfounded, according to the Commission on Social Justice which was established in 1992 by the then Labour Party leader, the late John Smith MP. Its paper, Flexibility in Work and Benefits, argues that the inflexibility of the benefits system in the face of an increasingly flexible labour market is to blame. It identifies the barriers preventing the unemployed from taking up work, including the loss of benefits from the low paid which create a “poverty plateau”. Contact Irene Faluyi, IPPR, on 071 379 9400
EMPLOYEE CONSULTATION
The TUC has warned that many of Britain’s top companies will have to set up European-level workforce consultation committees under the European Commission’s draft directive on works councils. The directive requires companies with at least 1,000 employees spread over other EU states and more than 100 in at least two of those states to negotiate Europe-wide consultation arrangements if requested by employees. The TUC’s research, published on June 7, shows that 59 of Britain’s 100 largest companies would be affected, despite Britain’s opt-out from the Social Chapter. The Council of Ministers is due to agree the final directive on October 19. Contact Mike Smith, TUC, on 071 636 4030
Comment
Suddenly everyone is at it! Labour leadership contenders, government ministers, Jacques Delors, even G7 world leaders meeting in Naples for the summit. And the public agrees: latest polls show unemployment is now rated as one of the two most important issues facing Britain. The clear consensus is: unemployment matters. Alas, there is no similar consensus on what to do about it.
The debate has moved on from 50 years ago. Then the emphasis was on demand side management by government. Now the buzz-word is ’employability’ – short-hand for supply side measures which all partners, including business, must address. In the 1980s, community affairs managers faced a frustrating time – helping to create a few tens or perhaps even hundreds of jobs through support for enterprise agencies, small business purchasing policies, etc, while their own firms made hundreds and sometimes even thousands redundant. Thankfully those times are largely over, but the legacy remains in the long dole queues and enterprise support policies are still as necessary as ever.
Meanwhile the nonsense of subsidising idleness continues – paying inadequate benefits to thousands of (mainly) young men, unlikely ever to be permanently at work. There must be a way to offer incentives to employers to hire the long term unemployed. The then Chancellor, Norman Lamont, dipped his toe in the water with a trial Workstart scheme in the March 1993 Budget. Now Ken Clarke should study seriously the results for November’s Budget. These schemes are certainly not cheap, nor do wage subsidies work without substantial training and counselling; but surely it is a better option than paying the long term costs of crime, social services and inner city disorder.
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