Work placements for the unemployed make a lot of sense

Allister Heath
UNEMPLOYMENT remains obscenely high in today’s stagnant Britain, and far too many people – young and old – have been on the dole or on other out of work benefits for far too long. Anything that allows them to break out of their present predicament should be welcome.

The government should be able to ask those on benefits to work for their money or to attend training; when handled sensibly, and with safeguards to prevent this from turning into a corporate subsidy, such measures will help integrate people back into the workforce. They should be welcomed by all who want to help the poor.

There is, however, a view among some activists that workfare programmes are tantamount to slavery: they don’t see that benefits are equivalent to a wage. They also argue that some workfare placements are demeaning, or that claimants should have the right to refuse placements they don’t like and continue to receive benefits. Such arguments are misguided; there is no slavery as claimants can choose to take neither job nor benefit, just like potential employees can turn down a job and therefore not get paid for it. These sorts of analogies are in truth horribly demeaning of genuine slavery.

Fortunately, yesterday’s high court ruling, which struck down the current scheme on a technicality, made it clear workfare wasn’t forced labour under the Human Rights Act. The government incompetently communicated requirements, provided wrong information about penalties and made other procedural blunders.

Once again, civil servants were sloppy and failed to produce legislation or implement the policy in a robust manner. The rules are now being tweaked to ensure the programme’s survival, but the government could yet be forced to pay out millions. The machinery of the British state is becoming more shambolic by the day.

Two more pieces of evidence to cheer those seeking to buy a house – and worry those who fear the coalition’s funding for lending programme and credit subsidies are fuelling another bubble. The Council for Mortgage Lenders revealed that 216,200 first-time buyers became homeowners in 2012, the first time the annual total has exceeded 200,000 since 2007 and a year-on-year rise of 12 per cent. And as noted by Ray Boulger of Charcoal, the Marsden Building Society has launched a 3.99 per cent fixed rate loan to July 2015. While this only allows buyers to borrow £250,000, this is the first time for nearly 10 years that we see such a cheap fixed rate mortgage available on a loan to value of up to 90 per cent. Money is returning to the housing market. The problem is that house prices remain around 25 per cent overvalued compared to earnings, and even more so in much of London. The surge in new mortgages has also been accompanied by a reduction in home-building. This won’t end well. The only sustainable solution is to tear up our archaic planning rules and allow hundreds of thousands more homes to be built.

A healthier development is the return of mergers and acquisitions, though the trend remains far too American. Last night’s news that Comcast is paying General Electric $16.7bn for the 49 per cent stake in NBCUniversal it didn’t already own is a major move; it follows the increasingly contested multi-billion proposed buy-out of Dell and the takeover of Virgin Media by Liberty Global. For the sake of the City’s underworked bankers and lawyers, let’s hope more UK companies soon start to splash out.
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