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Hello and welcome to this week’s The State We’re In. The name of this newsletter has never been so apt. Sir Keir Starmer faces a battle for his political life, even after ministers and prominent Labour figures were reportedly texted and “told” to tweet their support for him.
Coming up in this week’s newsletter:
Why Labour can’t get people “off benefits” and “into work” if there are no jobs… The places in Britain where there are five good quality job vacancies per 100 universal credit claimants The problem with 98 per cent mortgages My review of a new and incredibly timely Gordon Brown biographyBut, while the political fallout of Starmer’s decision to appoint Peter Mandelson as Ambassador to the US continues in Westminster, major policy problems continue to burden Britain.
Let’s turn our attention to one of the biggest: employment.
Since Labour won the election in 2024, much has been made about getting people, particularly younger people, who are currently out of work and relying on state support, “off benefits” and into jobs.
As I wrote in this newsletter last week, the numbers are grim and tell us that something is very, very wrong.
The number of NEETs – young people who are not in education, employment or training – has been rising. According to the latest data from the Office for National Statistics (ONS), there are currently 946,000 young people in this situation. Around half of them are thought to be graduates.
More broadly, the number of people who claim benefits in Britain has risen sharply since the coronavirus pandemic: between February 2013, when records began, and February 2020, the number of benefit claimants in Great Britain remained stable at around 20 to 21 million. It has gradually increased since, reaching 24 million in February 2025.
It is understandable and logical that the Government wants to find out what has caused this, and logical that “getting people into work” seems to be the most obvious solution to this growing (and expensive) problem.
The problem, though, is that there simply aren’t enough jobs.
New research exclusively shared with me for this newsletter by the New Economic Foundation (NEF) paints a worrying picture of the available employment opportunities in places where high numbers of people rely on state support to get by.
The North East of England, the West Midlands and Wales have some of the highest rates of universal credit claims according to the NEF’s analysis, but also some of the lowest availability of good quality jobs.
In Rotherham, there are fewer than five vacancies (4.48) per 100 universal credit claimants. In Pendle, it’s 5.06, and in Hartlepool, 5.11.
Even with the best will in the world, how is someone living in a place where there are five decent jobs per 100 benefits claimants supposed to build a life for themselves or their family when the odds are so clearly stacked against them?
The NEF has found that low-quality work – that’s jobs with low pay, poor job security and flexibility and with few chances for career progression – is available in the places where there are high numbers of people claiming benefits.
There is a very real danger that the Government’s ambition to move people from universal credit into work (and hit them with sanctions if they refuse) will be met with a rush to push people into low-quality work, only for them to find themselves unemployed again.
There are several reasons for this. Poor-quality jobs are often poorly paid, which means that a low-income person will struggle if their costs – particularly housing – go up. Such work is often physically demanding, which can worsen physical and mental health conditions.
And, finally, because there is no obvious pay or career progression or personal development in low-quality jobs, people can feel demotivated and unfulfilled, ultimately leading to them dropping out.
Max Moseley, senior economist at the NEF, told me that the UK is not alone in having a glut of low-quality jobs. But, he explained, we are unique “in the fact that our system steers people into them”.
“Since 2010, welfare reform has been chasing its own tail,” Moseley added, “whenever governments want to raise employment, the instinct has been to turn up the pressure and push people harder into any job.”
The result, as the numbers show, is that Britain has at once a sprawling benefits system but also one with persistently poor outcomes because it does not properly support people into good-quality work. Indeed, in some parts of the country, it simply wouldn’t be possible to do so because the jobs do not exist.
“Policy has focused relentlessly on individual behaviour, while ignoring a binding constraint in the shortage of decent work itself,” Moseley added.
Over the past year, I’ve seen this for myself. While travelling across the UK from East Kilbride in Scotland, to Corby in the Midlands and Basildon in the South East, I’ve visited once-thriving post-war new towns where industry and manufacturing work have evaporated, only to be replaced by poorly paid hospitality and warehouse distribution jobs.
It’s easy for politicians to blame people for structural problems, and Britain has a long history of demonising people who claim benefits. The elephant in the room here, though, is the fact that successive governments have overseen the effective deindustrialisation of this country’s towns and cities, saying and doing nothing while vital jobs disappeared and were never replaced.
Vicky Foxcroft, the Labour MP for Lewisham North, said of the NEF’s findings: “For too long the system has focused on simply getting people into a job, with not enough attention paid to whether it is a good quality job that is right for them.”
“Rather than punishing people with sanctions, we must work towards a system in which people across the country are treated with respect and given high-quality support,” she added.
If Labour is serious about getting people into work, it needs to attract the industries of the future and create jobs they will actually want to do. That will be no mean feat, given our net-zero commitments, which penalise industry and manufacturing, which, largely, still require fossil fuels.
The atmosphere in Westminster remains febrile in the wake of new revelations about Peter Mandelson’s relationship with the convicted paedophile Jeffrey Epstein. But Labour needs to get a grip, and fast. The people living in Britain’s declining post-industrial towns and cities can’t wait.
Housing Crisis Watch
Last week, major mortgage lender Santander launched a 98 per cent loan-to-value mortgage for first-time buyers. This mortgage is fixed at a rate of more than 5 per cent for five years.
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It goes without saying that I think this is a terrible idea. Allowing first-time buyers to borrow more is one way to get around the fact that house prices have soared above incomes in most parts of the country, but, in the end, all it does is saddle people with enormous debts.
On a similar theme, here’s my exclusive report about how officials inside No 10 are trying to convince the Treasury to bring back government-backed Help to Buy-style loans for first-time buyers….
What I’ve been reading
I thought Sarah O’Connor’s FT column about young people having relationships with AI was terrifying and important. I reviewed a new biography of Gordon Brown for this newspaper; it is more timely than anyone had thought it would be, given the former prime minister’s very public intervention on the allegations that Mandelson shared market-sensitive information with Epstein while Brown was trying to sort out the 2008 financial crisis… And, finally, on that note, over the weekend, Brown wrote of his disgust at the revelations in the latest Epstein files. I am not sure anybody in British politics has managed to link abuses of power and misogyny so clearly, compassionately or concisely as he did. Read what he had to say here.Hence then, the article about the towns with one job for every 20 universal credit claimants was published today ( ) and is available on inews ( Middle East ) The editorial team at PressBee has edited and verified it, and it may have been modified, fully republished, or quoted. You can read and follow the updates of this news or article from its original source.
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