Worklessness is a “disease”, Pat McFadden, the Work and Pensions Secretary, said this weekend, condemning people to “a life on benefits, with no work prospects and not enough hope”.
Announcing a new youth unemployment review, he predicted that the number of 16- to 24-year-olds not in employment, education or training will pass a million “in the next couple of months”.
The review’s chief, Alan Milburn, set his sights on “failures in employment support, education, skills, health and welfare”.
The last two of those failures are notable. While unemployment is rising, beyond that headline is a surge in people of working age leaving the workforce altogether as health problems turn into lasting reliance on (or imprisonment within) the welfare system.
Last week, the Mayfield Review found that there are now 800,000 more people out of work for health reasons than in 2019.
Long-term economic inactivity for mental health reasons has grown by 76 per cent among 16- to 34-year-olds. That’s an additional 190,000 people, early in their working lives, ruled out of the workforce indefinitely.
As the review notes, this is a particularly British problem – it isn’t an inevitable medical product of Covid, but an avoidable product of our health and welfare system.
The cost is sizeable, lasting and tragic. Financially, Sir Charlie Mayfield is blunt: “The state faces an unsustainable cost from economic inactivity due to ill health of £212bn per year, equivalent to 7 per cent of GDP or nearly 70 per cent of the income tax we pay.”
Long-term worklessness is a human disaster, too. Work offers the chance of purpose, fulfilment, independence and security, for individuals, their families and their communities. Its loss for one is a loss for all. There is no dilemma here between balancing the books and improving human happiness.
The Lib Dems are also on the march. Sir Ed Davey told BBC Radio 4 last week that “we need to cut back on welfare”, lamenting a “massive explosion” in people claiming benefits like PIP “who probably may not need it”, which he argued was due to claimants being “schooled” in how to pass telephone assessments.
You’ve heard this before. The health and welfare systems trap people out of work. Some are gaming the assessments. Long-term worklessness costs taxpayers a fortune and stunts opportunity and growth.
Those arguments sound familiar because they have long been mainstays of Conservative thought, from Iain Duncan Smith to Rishi Sunak. Today’s Government messages were not just disregarded but actively demonised when the Tories made them, supposedly because they were disguising a wicked desire for malicious attacks on welfare recipients.
Better to wake up late than never. But Labour’s preference to reinvent the wheel, rather than engage positively with genuine Tory concerns made in good faith, comes at a great cost.
McFadden rightly sees welfare reform as necessary, but he faces a challenge in persuading his backbenches to vote for it. The Government’s first attempt collapsed; the Work and Pensions Secretary evidently intends to have another try.
For many MPs, reared on messaging that “austerity is an ideological choice” and welfare reforms are an “attack” on recipients, this isn’t something they will happily swallow. Despite Keir Starmer’s giant majority, the whips are not in sufficient control to guarantee the numbers.
It is to Kemi Badenoch’s credit that rather than repeat churlish opposition for opposition’s sake, she has offered her MPs’ votes in support of welfare reform.
During the original rebellion, she attached three conditions to that offer: cut overall welfare costs, focus on getting people back into work, and promise not to raise taxes in the Budget. It was politically canny, because she knew Downing Street would reject at least two of the three, and that it could not bring itself to rely on Conservative votes. The olive branch was not taken; the Government chose to gut its own legislation instead.
In September, she got out in front of the topic again. In a speech titled “Kemi to Keir: Let’s work together to fix welfare”, she reiterated the offer. This time, there were no preconditions. Her pitch was open: “Sit down with us. Let’s agree a way to bring welfare spending down. And I will offer him the support of the Conservative Party.”
Again, the politics was smart. Voters know that this problem is real: it’s unfair, it ruins lives, and it costs tens of billions. The sight of a “change” government failing to whip its gigantic majority to deliver it drives people crazy.
Badenoch is right to offer “to work together in the national interest”. In doing so, she sets up a win-win.
Either Starmer agrees and it works, in which she has shown herself to be effective and him weak. Or he agrees to meet but won’t make difficult choices, in which case she walks and condemns his indecision. Or he refuses to accept her offer, in which case he is choosing to risk both failure and higher taxes.
Labour may have come to the same conclusions as their Conservative predecessors about the flaws in the system, but they are neither able to whip their own MPs to resolve them, nor willing to accept Tory help. If Starmer took Badenoch’s deal, his MPs, activists and union backers would be so outraged that he might not survive the backlash – and she knows it.
Both sides are well aware that welfare clouds are gathering on the horizon. Even with the highly capable McFadden steering the legislation, it is by no means certain that the Government will navigate its way through the tempest and avoid another wreck on the rocks of their own angry backbenches.
The Opposition sees an opportunity to sail magnanimously to the rescue, proffering a helping hand that the Prime Minister cannot possibly grasp. For Badenoch, it’s a perfect storm.
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