söndag 4 oktober 2009

Tories will force jobless into work

"Tories would force jobless to work". So ran the Sunday Times headline today. The policy was tried in the 1980s. I saw this from the inside. I was working for Lewisham Council and my colleage was involved in a scheme for refurbishing the railway arches in Deptford. A worthwhile job got done and a few people acquire useful skills. But it was an administrative nightmare. The client, British Rail Property Board, concluded that the work could have been achieved much more cheaply by letting the work out to contract on a commercial basis, which was what happened with later phases of the project. Cameron is spouting nonsensical political rhetoric.

So what should the Tories be proposing? Get out a pocket calculator, pencil and paper. How much would someone get in benefit when out of work? Jobseeker's allowance, Housing Benefit and all the other things that come free. Now work out how much it would cost an employer to give the same person a job and leave them with the same amount, and that is before the person has to pay the extra costs incurred in going to work, such as travel and meals out.

There is a big difference between the two figures. This used to be called the tax wedge but people who ought to know about it appear to have forgotten, including all the country's politicians and media commentators.

But if the aim is to minimise unemployment, the first thing to do is to get rid of the tax wedge by raising the thresholds for PAYE and Employers' and Employees' National Insurance contributions. Which does not have the headline-catching appeal of "force the jobless off their arses" but is actually one of the things that absolutely needs to be done.

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