In this interview, James Purnell blurts out New Labour’s warped ideology:
Of course, for some workers - especially single people who aren’t eligible for tax credits - the tax-payer would save money. But many of these savings would be eaten up by the costs of harassing the out-of-work: job advisors at doctors’ surgeries, supervisors of community work, subsidies to firms who hire the long-term unemployed, the costs of “[filling] claimants’ days with meetings and courses”, not to mention the huge bureaucracy which would of course attend such a policy.
Nor would there be any great rise in aggregate efficiency. Insofar as Purnell’s plan succeeds in stopping people working in the black economy whilst claiming benefits, it merely transfers activity to the formal sector, with no increase in aggregate output.
Indeed, efficiency would decrease in one sense. Purnell says: “We are not paying benefits until you find the perfect job.”
But picture the scene. A skilled unemployed worker is forced to take a minimum wage job. He then gets invited to an interview for a job for which he’s suited, and wants time off to attend. Either he gets the time off - maybe repeatedly - which is a cost to the employer. Or he’s refused, in which case he must either leave the job or be trapped in work for which he’s underqualified. Who benefits?
And let’s face it. If Purnell were serious about wanting a tax and benefit system that gave people incentives to work whilst also supporting the worst off, he’d investigate proposals for a citizens basic income, such as this big pdf.
So, this is not about economic efficiency or saving the tax-payer money. So what is it about?
The first is given away:
Secondly, this is about manipulating people into becoming the characters New Labour wants - people who want to make money. In contrast to John Stuart Mill, Purnell does see “the trampling, crushing, elbowing, and treading on each other's heels“ as the most desirable lot of human kind. As he says: “I really admire people who have made money.”
Such snivelling obsequiousness is loathsome in itself, not to mention inconsistent with the opinion of true economists. But to wish to impose this preference onto others - at the expense of the tax-payer - is alien to both decency and liberalism.
Now, let’s be clear. This is not about saving the tax-payer money. Indeed, depending on family circumstances, the tax-payer might be worse off if someone moves from the dole to part-time work. If a single parent takes a part-time job at £120 a week, she actually costs the tax-payer £37.54 a week, because net tax credits are more generous than out-of -work benefits (Table 1.3d of this big pdf).Under his plans, private companies will be brought in to get the long-term unemployed back to work – and will be paid by results. People who refuse to take jobs or go on training courses will be stripped of benefits….Mr Purnell says. “There will be a very clear expectation that if there is work there people should take it and sanctions to make sure that if they don’t then there are consequences.”
Of course, for some workers - especially single people who aren’t eligible for tax credits - the tax-payer would save money. But many of these savings would be eaten up by the costs of harassing the out-of-work: job advisors at doctors’ surgeries, supervisors of community work, subsidies to firms who hire the long-term unemployed, the costs of “[filling] claimants’ days with meetings and courses”, not to mention the huge bureaucracy which would of course attend such a policy.
Nor would there be any great rise in aggregate efficiency. Insofar as Purnell’s plan succeeds in stopping people working in the black economy whilst claiming benefits, it merely transfers activity to the formal sector, with no increase in aggregate output.
Indeed, efficiency would decrease in one sense. Purnell says: “We are not paying benefits until you find the perfect job.”
But picture the scene. A skilled unemployed worker is forced to take a minimum wage job. He then gets invited to an interview for a job for which he’s suited, and wants time off to attend. Either he gets the time off - maybe repeatedly - which is a cost to the employer. Or he’s refused, in which case he must either leave the job or be trapped in work for which he’s underqualified. Who benefits?
And let’s face it. If Purnell were serious about wanting a tax and benefit system that gave people incentives to work whilst also supporting the worst off, he’d investigate proposals for a citizens basic income, such as this big pdf.
So, this is not about economic efficiency or saving the tax-payer money. So what is it about?
The first is given away:
What we see here is New Labour as the party of business, happy to give away tax-payers money not to the unemployed, but to bosses.He is happy for the companies that will be finding jobs for the long-term unemployed to cash in. “It doesn’t matter if they make a fortune doing it, if they get the job done.”
Secondly, this is about manipulating people into becoming the characters New Labour wants - people who want to make money. In contrast to John Stuart Mill, Purnell does see “the trampling, crushing, elbowing, and treading on each other's heels“ as the most desirable lot of human kind. As he says: “I really admire people who have made money.”
Such snivelling obsequiousness is loathsome in itself, not to mention inconsistent with the opinion of true economists. But to wish to impose this preference onto others - at the expense of the tax-payer - is alien to both decency and liberalism.
"People who refuse to take jobs or go on training courses will be stripped of benefits"
That wasn't all. Caroline Flint, the housing minister, was saying that they shouldn't have council houses either.
Nice folk they have in the New Labour government. Are we to shortly expect a final solution from the government for the mounting problem in the NHS of patients afflicted with dementia: termination stations?
Posted by: Bob B | July 05, 2008 at 02:53 PM
Purnell's plans are good. He's not worshiping at the shrine of business but using its efficiency as a means to an end.
Posted by: Johnny | July 05, 2008 at 03:46 PM
Parnell is another managerialist who thinks that working on people will make them do what he wants. Sadly, he is wrong.
To change what people do, you have to change the system they are working (or not) in. Our system makes is rational to stay workless, I doubt if Mr Parnell's changes will effect that, thouggh some will lose out.
Change the system - they'll go to work - how? Basic Income and staying out of people's lives.
Posted by: Marksany | July 05, 2008 at 04:00 PM
«A skilled unemployed worker is forced to take a minimum wage job. He then gets invited to an interview for a job for which he’s suited, and wants time off to attend. Either he gets the time off - maybe repeatedly - which is a cost to the employer. Or he’s refused, in which case he must either leave the job or be trapped in work for which he’s underqualified. Who benefits?»
Well, employers of course, in two ways:
* Makes existing skilled workers more terrified of losing their jobs and become trapped in low wage ones, and thus reduces their leverage and their labor costs.
* Raises the competition for jobs of all sorts, thus reducing the general leverage of employees.
Another government quote on the same subject:
http://news.independent.co.uk/uk/politics/article2084235.ece
«He said that benefit claimants needed to compete for jobs with migrant workers, many from Eastern Europe. He went on: "We cannot reasonably ask hard-working families to pay for the unwillingness of some to take responsibility to engage in the labour market.»
The general idea is that middle and working class taxpayers should be happy to pay taxes to keep out of work people out of the labor market, especially if they are skilled, as that strengthens their bargaining power with employers and in some measure pays for itself in higher incomes.
But many middle and working class taxpayers tend to be both stupid and mean; stupid because they don't realize that a tight labor market is in their interest, rather than forcing the supply of labor to be higher by shrinking unemployment benefits; mean because they think that they are fully vested, and f*ck everybody else.
As a working person I would be pretty happy to pay more tax to encourage some of my labor market competitor's to withdraw from the labor market supply, and to insure myself against having to take the first crap job if I become unemployed.
Admittedly though a large part of the middle and working class taxpayers have different interests: retired middle and working class people have as non-working rentiers a strong interest in keeping labor costs low (higher profits boost their investments if any, lower wages mean cheaper care) and they have an income guaranteed for life, so being mean to the unemployed is fine by them.
More and more voters are becoming retired rentiers, and more and more young workers are either the heirs of the previous category or are non-voting immigrants.
Labour strategists see this pattern clearly, and pander to the retired rentiers as much as they can, thus ASBOs, gaming the housing market to go up and up, high immigration to reduce wages (the NHS is one of the major mechanisms by which low wages for young immigrants are a boon for retired voters), ever meaner working people rights and welfare, and so on.
The Conservatives of course try to do the same, except they overdo it. While often selfish and mean, the retired rentiers are also usually sentimental hypocrites, so they react negatively to the naked brutality of Conservative positions.
Pandering to insiders (the current "median voter") is the way to electoral victory, but it has to be done in a way that makes those insiders feel righteous about themselves.
Posted by: Blissex | July 05, 2008 at 04:12 PM
What is really sad is that - again- these idiots take interference and meddling with the workings of the economy as a good thing to achieve ends. In fact, it was their ORIGINAL meddling that brought this about. So take out all the plusses and minusses, get out of the way of the economy, be prepared for the flak, and a year or two down the line we would have a truly efficient system that MADE people work.
Posted by: kinglear | July 05, 2008 at 05:14 PM
Yet again, Labour use the state to try & engineer the economy, just as the Tories (despite their trendy "libertarians") try to control society.
Punititve policies such as those supported by bullies like Purnell, Hutton & Heart Of Flint do not work, in terms of the objective we all want, which is for people to come out of dependency and into decent, rewarding work.
The cycle of deprivation will not be ended until the barriers such as lack of education, poor services, and a general culture of low aspirations are abolished. Just as with crime, to take the symptoms and stamp on them will only make everything worse.
But Labour don't dare do any of this, they are vainly trying to appease the Daily Mail & don't have the courage of any convictions they have ever posessed. Weaklings & cowards, the whole shameless lot of them.
Posted by: asquith | July 06, 2008 at 01:22 PM
«But Labour don't dare do any of this, they are vainly trying to appease the Daily Mail & don't have the courage of any convictions they have ever posessed.»
But if they openly manifested their convictions, how could they be elected by the current (or future) rentier, "F*ck you! I am fully vested" Daily Mail readers who have become the determinant voting block?
As some commentators have noticed, including the economist, Labour have used wet-Tory Blair as a front to appease those voters on the social front, while after all enacting a fairly progressive economic policy (except on housing, where the interests of the rentier class have had to be protected at all costs).
Posted by: Blissex | July 06, 2008 at 08:55 PM
Chris - you made an assumption that the citizens basic income hasn't been considered.
Maybe instead of repeating the mantra that the CBI would solve everything you could engage with the criticisms I've made in comments on your previous posts. A CBI would need a vast beauracracy (even compared with now), is not compatable with European law (unless you agreed to pay it to all EU citizans who pay any tax) and you'd need a completely different system for non-EU imigrants under our ILO obligations.
Posted by: Rohan | July 07, 2008 at 03:53 PM
That should be "UK tax" in my post above.
Posted by: Rohan | July 07, 2008 at 03:54 PM