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How the Government can solve Unemployment for FREE!

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For over a decade the Government has seen to want to throw money at solving problems such as unemployment, which doesn’t work.  I don’t doubt for one second that the New Deal created loads of new jobs and helped people find employment. Sadly though these jobs were mostly for training providers to help deliver the scheme.

The problem with paying employers to employ people

The £2500 golden handshake option is ineffective. Reasons for this is because it costs while doesn’t guarantee results. This is an absolute no no. If you pay for something you make sure you get it. The Government doesn’t care about the taxpayers’ money sticking a large amount of money forward (even though not a lot to solve the issue to significant results) hoping it will buy results. We know it doesn’t. Take New Deal for example. £75 billion!

As mentioned on the Ipswich Unemployed Action blog:

Any company which has employed someone claiming Jobseekers Allowance will get £500 for employing someone and another £500 if they are still in the job for over 6 months. Up to £1,500 allowance for training is also included in the deal

The approach here is to reward firms rather than get the unemployed back in to work.

This to me seems to be going at it from the wrong angle. Of course businesses need help and support. They pay the wages and if they can’t afford to then someone doesn’t get employed (or lose their job if they were already employed).

You can also see where the Government is coming from regarding the £1500 grant (paid in 3 instalments mind you, not too good for cashflow) as businesses are obviously trying to save money due to the economic climate to survive.

£20 per week subsidy

To encourage employers to take on the long-term unemployed fulltime, on being the successful candidate the employer gets £500 (not immediately) for that previous longterm unemployed person, which equates over 6 months as around £19.23 per week.

I am not sure how that stacks up against paying their National Insurance Contributions and Tax. Rather an insult more than anything, I would imagine.

FREE labour: £500 bonus scam

This scheme doesn’t take in to account how easy it is for employers to exploit receiving some financial support from the Government without any ongoing sustainable employment for the Jobseeker. Surely this goes against the entire scheme?

What do I mean?

There is nothing stopping an employer claiming the £500 grant for taking on an ex-longterm unemployed person as an employee and to terminate the contract within the first 2 weeks or so perfectly legal as being under an probationary period where either the employer or employee can get out of the contract at either time.

Whats the cheaper more effective method?

A cheaper method would be giving an employer say 3 months tax-free for new employees who were unemployed. This means a little bit of publicity and implementing a new Statutory Instrument to legalise the plans for this 3 month tax free gap per an employee for an period of around 9 months to allow employers to have the time to take advantage of it

I would estimate around £2m expenditure on this for promotion of the scheme instead of the £400m for this scheme of how it currently is.

The tax the employer pays for employees is on behalf of the employees – the business isn’t being taxed directly.

Wouldn’t this cost?

Nope (apart from promotion costs). Firstly, an long term unemployed person pays no tax (there are a rare exemption should they have exceed that years tax threshold as Jobseekers is taxable income or if they had a job above the threshold before signing on) therefore the Government makes no money from them.

Secondly, if new jobs are not available and therefore no one fills them they receive no tax income from them.

Wouldn’t this also mean no tax income?

For three months yes. Other than that the new jobs will create a bigger tax for the remained of the year and hopefully for more years after that.

This would also mean an end to the recession.

Problem with this Government scheme

Give it 6 months, the unemployed will return back to the dole queue.

Common sense of implementing a system like I suggested would mean less expenditure, more tax income, quicker move out of the recession and more sustainable jobs.

This obviously wouldn’t be the ultimate plan of sorting the wider problem but would get a lot of people off unemployment benefits and in to sustainable jobs. Progress can only be made in stages, the problem is the Government makes a plan to step on to the second step and always end up back at step 1.




17 Comments

  1. 1
    Survive Unemployment says:

    I don’t see how your system would work any better than what’s already in place, and it wouldn’t be free either. Tax abatement costs money.

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    • 2
      New Deal says:

      Well worded. Exactly, it might not work any better but it will NOT be any worse.

      Saying this, it would be better as it will bring financial savings!

      A saving of £398 million… not to be sniffed at.

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  2. 3
    Gerry Attric says:

    This shower of a Labour government which have continued with Thatcherite economic policies since they got power in 1997 has brought us to this mess.
    The UK is drowning under a flood of insecure low paid temporary jobs.
    I can’t see how the Flexible New Deal is going to to solve the problem of an ever increasing army of long-term unemployed. Until they solve the structual problems of the UK economy which increases the number of permanent reasonably well paid jobs – the government are just wasting taxpayers money.

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  3. 5
    terratech says:

    If your thinking outside the box get your head out the clouds and join us on earth, with our down to earth movement.

    Unemployment Movement

    “Here Again! Another recession, another round to blame and shame the unemployed….. While green shoots appear and disappear just as quick, we all know the crass and inevitable lines the newspapers are going to come out with to vilify the unemployed and hot on their heels will be the political bureaucrats ready to roll out the training scheme and the whip of the so called public opinion remonstrating how `They` are being undermined by the unemployed`s income.

    This incredulous and insane reaction in the mist of this `Depression` is akin to a head in the sand as day after day we here of layoffs and redundancies, shorting working hours and work holidays; all based on the idea that `One Day` all will be put to right.

    Here we cannot wait for that Day! And we will not wait for another 25 years for the recovery while having our dignity stripped from us as the welfare regime pummels our families into poverty. Here there can be no politics as the basic demands we make are First and Foremost the;

    Abolition of the signing on regime

    Abolition of all mandatory schemes

    Abolition of present welfare reforms

    Please get out of this delusional behaviour, we need more than just some more tinkering. Join us at raw-rap.com and start thinking about a different future. Join the `Unemployment Movement` a group on our social network.

    These demands will revolutionise a whole way of life!

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    • 6
      New Deal says:

      I like what you are doing but I do have some criticism…


      Abolition of the signing on regime

      Abolition of all mandatory schemes

      Abolition of present welfare reforms

      I am in favour apart from abolition of signing on. I know from my own experience that you are treated as shit and made to wait up to an hour for your time specific allocated appointment which you would be signed off or sanctioned for arriving just a minute or two late…

      ..but the whole signing labour market declarations is to safe guard the taxpayers’ money (supposedly anyway) as if you just submitted a claim you simply didn’t acknowledge a change in circumstances (for example) whereas under the current system you would also commited an offence of signing on to say you haven’t done any paid or unpaid work when you may have done.

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      • 7
        terratech says:

        The whole piont of the statement was to get individuals to start thinking diffferently about Work & Unemploment, we are entering a different era in which I beleive work will be harder to find and poverty will become rife (already in the millions now in the UK).

        While I am not campaigning on a `Basic income` this could be a next step… We need to start thinking out of the box and the basic income was even discussed about in ireland not so many years ago.

        This Movement is about people and not about one persons veiws however. There will be many ideas to challenge us all but one thing I do feel is that the circumstances of the unemployed have to change and the answers that the present elites are coming out with will push us further down the road to chaos.

        It is NO LONGER JUST for the unemployed to be made villians every time there is a recession.

        It is NO LONGER JUST that we will be the ones that will have to pay for for the Financial Crisis that the elite has thrown at us.

        It is No LONGER JUST, that while many Work they are still in Poverty.

        The `Unemployment Movement` is an open invitation for Justice and the plain down to earth engagement to change all our lives from just surviving to a community at ease with living,sharing & trading.

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      • 8
        New Deal says:

        Interesting.

        What would you say in the biggest barrier to employment?

        The problem like you say is even worse. Even people in fulltime jobs are in poverty.

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        • 9
          terratech says:

          Hiya New Deal

          What would you say in the biggest barrier to employment?

          Your article seems to imply that there is the employment available, A MASSIVE BARRIER!

          A journalist G. K. Chesterton said that too much capitalism doesn’t mean too many capitalists, but too few capitalists. The concentration of power into too few hands has encouraged multinationals taking the lion’s share of economic output, when they lose the world loses big time in unemployment and just like the banking crisis now upon us the banks of this country holding the lions share inevitably meant a big hit for this country.

          Here I would have to say that “Small is Beautiful”, if you cut your hand you don’t die as otherwise in this crisis the company (body) has been damaged and it has died because the company is the whole thing. So I would first if you wanted to put forward any ideas on getting employment back is to put into effect some legislation on restricting business sizes. What other effect would this have but to burst through the creative bubble as each member of a business/co-operative knows each other better, this is being tried out by larger businesses but I see the creativity lost to the noise of competing Departments.

          Your argument to subsidise business for taking on workers is like asking of those jobs available just how many monkeys you need to change a light bulb. This would not create employment since for employment to happen with any real affect it has to be creative in new products/services. All you would be doing is supplying the power centres with capital which would be lost as is now the case. Take a look at the article on `Quantitative Easing Reality Check` (http://raw-rap.com/national-uk/economy/quantitative-easing-reality-check.html) this article at the bottom half gives a real example of subsidy going to waste and just filling the pockets of those in power from the worthless shares.

          Well I hear you shout that the monkeys could always take it in turn, of course I`m talking about part-time employment, a ploy now that government of any hue are taken with. A little problem with this is that it relies on those same employers with all the issues and the affect on the individual is work poverty subsidised with benefits (which can lose value and be cut). But hey their working, it seems for many this is an answer but I would say of a stagnated Political and Business culture hanging on to power going in the same direction, ‘DOWNHILL`.

          So what of the initial question of the barriers to employment, there are many and not least the most important, `People` and what they feel they need to exist on and a natural inclination to want more. Already suggested as a barrier buster the basic Income starts with the premise you are already creating worth in the economy. What are you doing if you make a cup of tea or mow the lawn but `work`. This is not counted economically so the big question; what is work and how do we create wealth from it.

          Making a new economics system is as easy as the bank of England creating money from nothing but it has to have value. We already create value as said making a cup of tea but if this is too simple, what of the value a mother creates bringing up a child, a volunteer who give time and labour to a charity or a programmer who puts out a piece of software which saves lives.

          This is an income which needs to be recognised, the true wealth of a country which can be paid to every individual. Everything created hence forth from industry is extra wealth that can be worked for in the traditional sense and taxed however with the underpinning of an income who say anyone would want to work. This depends on people and their natural inclination to want things and there greed. In this fictional society it is all possible even the right to be lazy, to live in poverty since it would not be imposed.

          The upside of a system such as this is the right to work for yourself creating wealth in your own community, for your community which would be underpinned by income security from the basic income. An example of dashed hope in this area has been reported widely and can be read about; Jobless-friendly bank threatened by red tape (http://raw-rap.com/national-uk/welfare/jobless-friendly-bank-threatened-by-red-tape.html). Stopped from borrowing from a Micro bank, claimants’ looking to work for themselves fail to start because of financial insecurity. The cardinal sin is if you WORK while unemployed you lose your benefits; surviving is no encouragement to take chances especially if you have a family.

          The barriers to employment are imposed, from feudal lords through to today’s political negotiators with business the imposition of the few holding onto power has stifled creativity, competition and has imposed a yoke around people’s imagination. This is beyond the politics of left or right, change will only come when we the unemployed take back our Dignity & Pride, change our masters to become our own.

          This is a WAR because they will not change, catalogued and patented as a commodity you are theirs to make money from. Take a look over the New Deal Scandal, you’re their commodity to be sold and battered with. It’s about time sites like this were not needed and the biggest barrier to employment were destroyed.

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        • 10
          New Deal says:

          Of course there is employment available. You will probably hear a lot of people say “there are no jobs” which means “there are no jobs locally that I can or want to do”.

          The number of jobs available in the recession has decreased and more people apply for the same jobs. The jobs are available.

          To an extent there will always be jobs to replace those existing jobs where people have entered retirement or temporary ones those that replace women on maternity leave or people who are ill.

          The biggest ever barrier to employment is unemployment.

          You are more likely to get a job if you already have a job. If you are unemployed this barrier occurs. The size of the barrier depends on the length of your unemployment.

          Courses such as New Deal even though offers in some cases work experience, allows the period of unemployment to rapidly increase. As a general rule of thumb – if you have been out of work for 3 months then you might as well prepare yourself for a length of unemployment.

          This is complex as there are many factors involved such as:
          a) luck (it is important)
          b) timing
          c) skills and qualifications
          d) experience
          e) strength of competitors (i.e. the other candidates)
          f) the employer
          g) you as a person (appearence, personality etc.)
          h) who you know

          This barrier isn’t just one involving the jobseeker but also from the other end of the scale. The way of solving unemployment to a larger degree is creating new sustainable jobs.

          This can be done in numerous ways:

          a) allowing permission for building new supermarkets, large leisure facilities etc. which improve the local labour market i.e. if there are more jobs available, there are going to be more successful candidates and likely to reduce the number that apply to each (less people chasing the same jobs).

          b) removing barriers to employers especially SME’s to be able to employ more people (like the example I mentioned above in the blog article)

          etc.

          I can’t suggest the way out is by creating new jobs – this isn’t easy to do for sustainable jobs. There isn’t much point creating temporary “permanent” jobs that are not sustainable longer term.

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          • 11
            terratech says:

            You just sound like a jobcentre advisor or maybe even a New Deal advisor, am I wrong or maybe a union rep.
            I ask as it seems you read the first line and sciped the rest of what I was saying especially about the stagnated mindset that is driving the crisis, the politics and the answer to possibly creating sustainable employment.

            So there is no problem…..

            “The biggest ever barrier to employment is unemployment

            Then you go on to praise some of these New Deal Agenceis.

            I wonder what you would have to say to the people who didn`t get a Job here in this article, HARD LUCK!

            1,500 scramble for just 92 Tesco jobs

            In a sign of just how tough the job market has become, the supermarket giant said it received more than 15 applications for every post, which included full-time and temporary roles created to help customers navigate the expanded store.

            Read more: http://www.belfasttelegraph.co.uk/news/local-national/1500-scramble-for-just-92-tesco-jobs-14466371.html#ixzz0P8Djk9Qd

            I know what we can do build another ten supermarkets in the town, that will solve the issue of unemployment here. OK I`m being a bit Vicious/ scarcastic,

            The area that is covered with you blog statement, this has been put forward by the conservatives so nothing new there and I can see many underhand employers taking this up, you know the ones with a high turnover of staff the ones that leave laugthing at the new deal because they got the extra staff to cover the ones they got rid of.

            So otherwise you dont have an answer or a suggestion since this was some one elses idea that you listerned to and reformulated. Please do not take this as a personal attack.

            The barriers to employment are imposed, from an economic system and a class structure. All I would ask anyone to think about is becomming a winner, not a loser in the game being played out to keep YOU COMPLIANT.

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  4. 12
    terratech says:

    Yes New Deal we have both alot of work to do to gain the interest and respect of the public and far from seeing Your site as competition, I see it as a compliment (if a bit reformist) to all sites tackling this important issue in there own way and my full respect goes out to what you have acheived and hard work.

    In fact I look forward to what you have in mind for your new site and will encourage all who visit raw-rap to take an interest in your work as it has to be about about building bridges, getting past ideologies and ego`s.

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  5. 13
    ALLAN JOHNSTONE says:

    New deal two questions for you
    1) My nda got me to apply for a job soldering pcb but at no time did he ask me if i was colour blind also this wasnt on job details surely he slipped up here?
    2) nda threatened to sanction my benefit for 26 weeks for refusing to do new deal placement which he reckoned “would enhance my employment prospects” surely the first sanction should have been 2 weeks not straight to 26 weeks? also he told me i would still have to do 26 weeks ndp at the end of the benfit sanction period
    also having new deal on my cv always resulted in a rejection letter so therfore new deal wouldnt in my opinion “enhance my employment prospects” more like do the opposite 89 rejection letters surely proves this
    your opinion on these matters mush appreciated

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    • 14
      Flexible New Deal says:

      Hi Allan,

      1) Your useless New Deal Personal Adviser under JCP/DWP rules didn’t do anything wrong as if you were colour blind then it should have previously been disclosed by yourself and on the system included on your “In Work Benefit Calculation” and your Action Plan. It would be deemed that your NDPA was working to your best needs and a failure from you to disclose it or the fact it was never entered on the system by someone else, would eliminate the blame from his responsibility.

      I don’t see why your NDPA couldn’t ask you that simple question as correct procedure. Well, it probably is obvious.

      2) Not a fault solely on your NDPA. Yes, for New Deal you can only be sanctioned for 2 weeks for first offence. NDPA’s and Managers nationwide always threatened the full 6 months/26 week sanction. This is common JCP/DWP practice. You should have seen my face when I discovered that 2 weeks was the maximum I could have got. The problem is that a) it hasn’t been illegal for a long time to wrongly advise benefit claimants, b) you cant complain or do anything about it (increases the complaint numbers though, if they bother including them) – try complaining and prepare for a standard template letter back likely to blame you…. c) DWP are famous for lies and distorting events. They will tell you that you misunderstood your NDPA (if you complained) and will state (even though the manager wasn’t there) the NDPA apparently have said “up to” a 26 weeks sanction.

      New Deal is a scandal (thats coming from me ironically). The main employment figures quoted are for employing the staff delivering the courses. So the New Deal really did create jobs. There are 3 groups. Group 1 of jobseekers get out of jobseekers before New Deal. Group 2 are the cherry picked people whom just fell on to New Deal but are deemed “job ready” and majority of the time already have a job offer they accepted and been told to attend New Deal prior to signing off to accept (New Deal providers still get a job outcome bonus). Group 3 is everyone else… stuck on pointless courses doing 30 hour job search intended to bullying you into finding a job as its so boring being there. The problem is the course demotivates you, under resource you (you wont be able to ring up out of course hours) and has turned people severely depressed. Of course thats not a jobcentre plus issue they will deem this depression as a barrier to work and praise the New Deal course as a tool of getting that person specialist help.

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  6. 15
    New Deal says:

    You just sound like a jobcentre advisor or maybe even a New Deal advisor

    Maybe I said something that upset you but there is no need for insults like that!

    So there is no problem…..

    “The biggest ever barrier to employment is unemployment

    It is a major problem.

    you go on to praise some of these New Deal Agenceis

    Praise who? What New Deal provider have I praised?

    In a sign of just how tough the job market has become, the supermarket giant said it received more than 15 applications for every post

    Supermarkets are low skilled jobs and 15 applications for just one vacancy isn’t that bad although not absolutely great. When hunting for employment almost everyone tries supermarkets (the unemployed, college students etc.) so I think it is fair to say that up and down the country they would always be between 10 and 20 people going for just one job position.

    you dont have an answer or a suggestion since this was some one elses idea that you listerned to and reformulated

    What do you mean? No one elses idea, just my opinion. Hardly surprising that a few different people have similar ideas when focusing on the same topic.

    The barriers to employment are imposed, from an economic system and a class structure.

    No mentions of your idea to what the barriers of unemployment are – how they are there in the first place is irrelevant unless you know what you are dealing with.

    When I questioned you earlier I was NOT negatively criticising you just giving you an opportunity to explain what your site is about to my blog viewers who may be interested.

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  7. 16
    terratech says:

    Hiya New Deal, no offence was taken from anything you have written. As is common the written word often fails where any detailed discussion is best accomplished face to face.

    So whats an insult amongst brothers, but there I say commrade as you never seemed to answer that part, LOL.

    “The biggest ever barrier to employment is unemployment

    Now you keep on repeating this, well obviously it is in literal terms. but I think I did take some exception here as you put it down to a personal failing, where I would consider it an economic failing (external). What I find really offensive about this concept is that it relies on the New Political Agenda of Realism which is a corruption of logic in pursuit of profits at any cost and which brought about the New Deal and Welfare Reforms.

    “No mentions of your idea to what the barriers of unemployment are – how they are there in the first place is irrelevant unless you know what you are dealing with.”

    I`ve got to say this is absolute crap – We are dealing with `Corruption`plain and simple, which has always been here. Its a corruption as worse as Fascism (National Socialism) which turned a Jew into a commodity, just as they have with the unemployed.

    Now my website ( http://raw-rap.com ); You know what, it would be great to get some feedback New Deal. I got to piont out that the `Unemploment Movement` is a `Group` within the community social network, seperate from the main site with its own agenda.

    The websites aims are simple, to get people discussing issues that are happening in our back yard (UK). My own concerns are around Poverty,Welfare/Human Rights & Unemployment. If yours is about Work, Gender etc. theres a space for you but I would say be prepared to be challenged as the concept of the site is about briding the gap between alternative and conventional ideas.

    Why now? as an activist I often see the rehtoric of politics and idealogy getting in the way of a shared interest.. this needs to change as the lack of democracy in the UK as I see it is Frightening and the understanding of events being shaped now is nightmarish.

    This is not a single issue site or about one inviduals veiws as you can post articles, write your own Blog and yes even start up a group in the community social network; now theres an opportunity for you New Deal.

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  8. 17
    New Deal says:

    terratech…

    “The biggest ever barrier to employment is unemployment

    To stick this in more simple terms (I understand it might be seen as confusing or a stupid statement) the biggest discrimination you can face in the recruitment process is periods of unemployment. Also if more people are unemployed it will be harder to get employment if more people apply.

    There is no competition. If anyone who are aiming for the same or similar aims decide to setup their own site that is great. If you want a challenge to create a site that is better then this one then be my guest.

    This site is solely about what I see is the issue where people are free to comment/suggest/complain/praise. I spend a lot of time researching prior to posting.

    The intention isn’t a community – this is a blog and it will never be a Social Networking platform… however I am aiming for doing a community site hence the post on New Deal Scandal site going to archive fairly soon: http://www.newdealscandal.co.uk/flexiblenewdeal/2009/08/18/new-deal-scandal-nears-end-of-life/

    This whole site is aimed to see whether there is an interest regarding DWP, A4e, YMCA Training and other New Deal providers and all related issues around unemployment.

    There are numerous opportunities, this one I would have to decline. I very much appreciate your efforts, however, I am a leader not a follower. It is for those reasons I am out.

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