This is very much a first take on what the Chancellor has just announced. I’m planning to write more over the next few days as I process what has just been announced. But, this is my first take on the Plan for Jobs (also see the more detailed plan).
Firstly, we have to recognise the enormity of the situation that has brought about the spectacle of a Conservative Chancellor to splash the cash about in quite the way that Rishi Sunak has just done. I can’t help but wonder how John McDonnell is getting on in the parallel universe where Labour won the general election. My guess is that the papers are being far more critical of him and that he is facing somewhat more robust opposition. Nonetheless, let’s return to reality.
Inevitably I have to start with career guidance. I’ve been campaigning over the last few weeks for emergency investment in career guidance and a career guidance guarantee. On the face of it we seem to have got even more than we asked for, with the Chancellor promising a £32 million pound investment in the National Careers Service. But, in fact this is going to be spent over the next two years, meaning that it is only £16 million a year. There are big questions about how this is going to be used to support young people (both in education and recently out of it) when the National Careers Service has traditionally been focused on adults. There are also questions about the parallel announcement of an increase in the number of Jobcentre Plus work coaches. Again, this is welcomed, but the focus of these staff need to be clear and not over-sold.
All in all there is a lot to be positive about. The government are listening and are supporting career guidance, but there is a lot of devil in the detail and a nagging feeling that this might not be quite enough for the scale of the problem.
Youth employment interventions
Beyond the commitment to career guidance the Chancellor also announced a raft of schemes to support young people. Most substantial is the Kickstart Scheme which is basically a wage subsidy for employers taking on young people for short term placements. Alongside this there was incentives to encourage employers to take on trainees (£1000) and apprentices (£2000).
This is all great. But, will it be enough to change the behaviour of beleaguered employers? Is now the time that your firm will want to take on a young person for six months? Will £1000-2000 encourage firms to take on new staff? Given the limited success of the apprenticeship levy in catalyzing employers to take on young people there have at least got to be some question marks hanging over these interventions.
Incentive schemes like this might make a difference, but again, will it change the behaviour of enough employers.
Alongside the specific employment interventions for young people there were a number of more general announcements. Incentives to encourage employers to bring furloughed staff back into employment. More incentives around the housing market and the building trade (with a green tinge). VAT reductions for the hospitality and tourism industry. Most populist of all the promise of half price meals out to get restaurants up and running again.
All of these are legitimate stimuli. All of them might make a different to people’s behaviour. But, as Anneliese Dodds said in her response, none of them will work if the government can’t (a) bring the pandemic under control; and (b) convince people that they will be safe to go out, eat out, move house, have building workers into their houses and so on. This sense of ‘safety’ is important and is clearly economic as well as health related.
This is a good start. But, as Rishi Sunak himself said, we are in the deepest global recession on record. The key question is whether this is enough. Of course, this isn’t the beginning of the end, it is only the end of the beginning. Sunak will be back for round two in the autumn, but by then the recession may well be deeper.
Not everyone is convinced. Left wing political economist Richard Murphy isn’t impressed. His take is that this is tokenistic and not substantial enough to make a different. Tony Wilson from the Institute of Employment Studies is more positive but still critical. He raises a number of questions about how quickly this can be operationalised, whether vulnerable people are being left out, and again, whether it is big enough. Others have wondered why there is no support for self-employed people or renters.
Clearly you can’t please all of the people all the time, but the issue of spin vs substance and scale has become something of a theme of this government.
For me, there are a number of good things in this, but most of them are a useful first step rather than a finished vision. My guess is that a lot more will follow in the autumn, and that this package alone will be insufficient to deliver what it promises.
I hope that I’m wrong!