Tuesday, January 27, 2009

Make Unemployment Redundant

I'm just sending this to my MP. Feel free to copy it to your MP too - this will make them take more notice. The essence is - transform unemployment benefit from its present status ad a dead dole to a potent stimulus to the green sector of the economy.

Joan Doe MP
House of Commons
London SW1A OAA

I would be very grateful if you would put the following proposal before the appropriate Minister.

Our nation faces an extreme challenge from the current recession. We also face present and future challenges from changes brought about by climate change, and from Peak Oil. In forming policy to address this unprecedented combination of challenges we must be ready to step outside the accepted frameworks of thinking about social security payments.

Recession means widespread unemployment, which means increased Government spending on benefits, widespread economic hardship, increase in crime, increased demands on the Health Service, inter community tensions, and a rise of right wing political groups. This is a toxic mixture of threats.

Government has rightly acted to save the banking industry from collapse, although at great cost, and with no certainty yet of final success. The PM is right to ask all nations to work together to solve this problem. At the moment, money has been poured, necessarily, into the most uncertain area of the economy, the banking sector, whose true liabilities are still unknown. It is now time to consider the best way to deal directly with the problems in the real economy, and specifically, with unemployment and the way benefits are issued to the unemployed.

At present, JSA and other benefits are granted on condition that the claimant does no work, and benefits are withdrawn at the point that the claimant succeeds in finding work. This is the cause of the well-known traps of unemployment and poverty. It also provides an incentive for fraud. The Tax Credit scheme is a welcome step towards addressing this problem. A small margin of tolerance is given in an Income Disregard, and pensions have a complete income disregard. This sets a precedent for the present proposal, which is termed here the Green Wage Subsidy (GWS).

Policy needs to facilitate the passage into work, and also to stimulate good work that is of benefit to the environment and society.

To this end, GWS Tribunals may be set up with the remit of judging whether the processes and products of enterprises that apply to them are beneficial to environment and/or society. The enterprises may be private companies or public services.

Activities which would be considered prime candidates to apply to the GWS Tribunals would be:

1. energy conservation
2. renewable energy technologies
3. manufacture of energy efficient goods
4. housing - new building and refurbishment
5. pollution control technology
6. waste minimisation
7. repair
8. recycling
9. water management
10. sustainable agriculture
11. forestry and timber work
12. countryside management
13. improvements to visual environment
14. public transport
15. education and training
16. counselling, caring and healing
17. community work
18. leisure and tourism
19. innovation, research and development

Between one and two million jobs could be created in the UK in these fields. (Bills of Health, Lawson R, Radcliffe Oxford 1996, ISBN 1-85775-101-9)

Those enterprises that are successful and are given accreditation can go to the local Job Centre and engage new employees. The new workers are allowed to keep their benefit while they are in this work, and the new employer will supplement the benefit to bring the wages up to the going rate for the job. As a result, the employee is guaranteed that any work s/he finds will bring in more money than is presently coming in from benefits, and so avoids the poverty trap and the unemployment trap. The employer benefits from an expanded workforce at a lower price than would otherwise be the case.

There is no element of compulsion or “Workfare” in this arrangement.

Displacement of employees paid in the traditional way by those coming in under the new GWS regime. Any employee who believes that s/he has been so displaced can complain to the GWS tribunal, who can revoke the accreditation of an offending employer.

The effects of this reform are as follows:

1. A proportion of the Benefits Agency pay-outs become a positive stimulus to the green sector of the economy, instead of a humiliating hand-out, grudgingly given and sullenly accepted.
2. The benefits expenditure would have been made in any case, so there is no extra expenditure to the Treasury until the recession is over. At that time, it may be thought right to develop the GWS into a Basic/Citizen’s Income or “Universal Benefit” scheme.
3. The green sector of the economy is specifically boosted, which will have a “feel good” factor for all.
4. The poverty and social problems associated with a recession are alleviated.
5. Insofar as the green work saves energy and produces renewable energy, global warming and peak oil will be addressed.
6. Administrative costs associated with benefit changes as people move in and out of work will be reduced.

In summary, a reform of the benefit system is proposed that will alleviate unemployment and the social problems that are associated with unemployment, at no significant cost to the Treasury, which will aid the fight against global warming, and ease our passage into a decarbonised economy.

I hope that the Minister will give this proposal sympathetic consideration.

No comments: