Welfare Reform on the Web (January 2008): Social security - UK - New Deal

A million off Incapacity Benefit: how achievable is Labour’s target?

S. Fothergill and I. Wilson

Cambridge Journal of Economics, vol. 31, 2007, p. 1007-1023

In February 2006 the New Labour government stated its aspiration of reducing the numbers of people claiming Incapacity Benefit by one million within ten years. This analysis aims to assess the extent to which Labour’s target is likely to be deliverable in practice, based on a model of flows on and off Incapacity Benefit and their impact on the stock of claimants. The analysis takes account of the major geographical variations in the distribution of Incapacity Benefit claimants and the ability of Britain’s regional economies to absorb substantial numbers of extra workers. It concludes that without economic revival in the North, Scotland and Wales, Labour is likely to fall short of its one million target.

New Labour at work: long-term unemployment and the geography of opportunity

N. Theodore

Cambridge Journal of Economics, vol. 31, 2007, p. 927-939

New Labour has placed great faith in active labour market policies, such as the New Deal programmes, to lift people out of unemployment and poverty. This paper argues that supply side policies like the New Deals are ineffective in eliminating worklessness without parallel measures to create secure, good quality jobs. It posits that Labour created its welfare-to-work schemes on the basis of a flawed analysis of the causes of long-term unemployment. It considered worklessness to be due to laziness and deficient attitudes among the unemployed. Demand side concerns about job availability and job quality were conspicuous by their absence from the equation.