The New Deal
The New Deal is part of Labour's attempt to reduce unemployment and is based on the ethos that everyone must work to survive regardless of their situation. It has been criticised for its crude imposition of work discipline on claimants and has been compared to the USA workfare system in its coercion of the unemployed into working for an income which is on or below survival level.
The Process
From January 1998 the New Deal will be pioneered in 12 Pathfinder areas and goes UK-wide in April 1998. Under 25's unemployed for over 6 months will be undergo a series of interviews - the Gateway - a 'job guidance and counselling' programme lasting 2 to 4 months. This will basically increase the hassle given to people signing on - they will be expected to "clearly examine their employment options" and will be subjected to several interviews. Over 25's will be subjected to the same process although they will have to have been unemployed for more than 2 years to enter Gateway. Full details of the policy for over 25's are not yet clear.
The aim of the Gateway period is to put 40% into an unsubsidised job or education - all others will be forced into one of four options. Claimants who refuse or fail will be required to take up a place identified for them by the Employment Service. If they refuse or fail to take up this there will be no option of continued full benefit - sanctions will be applied.
The Options
1. THE EMPLOYMENT OPTION A 6 month job with a private or public employer, with one day per week training. The employer gets a £60 per week subsidy and is supposed to pay a standard wage - suggested £90/week minimum. After the 6 months employers can replace these subsidised workers with other subsidised workers. The aim isto place 40% of scheme participants into this option.
2. THE VOLUNTARY OPTION Working for a voluntary organisation for 6 months, paid benefits plus the equivalent of £15 per week. One day per week training. (13% target for this outcome)
3. THE ENVIRONMENTAL TASK FORCE OPTION Same conditions as voluntary sector. Similar to community service but with a few extras to disguise this. A glimmer of light under this option is that it may be possible for local recycling co-ops, resource centres, etc to be part of the consortium running this option and thus create relatively sane placements for campaigners. (22% target)
4. THE EDUCATION OPTION On existing benefits. Only available for those lacking NVQ level 2. (25% target)
Placement length can vary, in Manchester, for example, placements will be for 12 months. The number of options available can also vary: in some places the voluntary sector and the Environmental Task Force are being combined into one option.
Throughout time spent in one of the options the focus will be on getting or maintaining a job in the regular labour market after the New Deal period. The later stages of each option will therefore include intensified monitoring by the Employment Service.
The Reality Check
Labour promises monitoring will take place to ensure that employers don't just replace jobs with New Deal workers or use them to fill naturally occuring vacancies: however this is happening in a context of falling wages and employers seeking any excuse to introduce low paid casual work. The New Deal can only intensify this process by providing cheap labour for employers, undermining wages and conditions and replacing current going rate jobs with underpaid conscripts. Sainsbury is planning to recruit up to 1000 young people on the New Deal; Tesco will guarantee interviews to all New Deal candidates; Littlewoods Home Shopping Division is working to incorporate the New Deal into all future recruitment planning. Reed and Manpower recruitment agencies will actually work in Job Centres, processing claimants through the Gateway and finding placements.
This has been criticised as the thin edge of eventual Employment Service privatisation. As far as claimants are concerned this means they will be dealing, not with ES staff, but with employees of a private recruitment company with an entirely different set of priorities.
The voluntary sector will also be hit - if it becomes accepted that the voluntary sector should depend on part of its workforce being unemployed people on schemes, then the case for adequate funding for sufficient staff paid decent wages is undermined.
Resist Social Control
Contact your local Groundswell group or Edinburgh Claimants, c/o Peace and Justice Centre, St Johns, Princes St, Edinburgh 0131 557 6242