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Wednesday, May 14, 2014 

The scandal hiding in plain sight.

Anyone surprised by the Labour Force Survey figures confirming there hasn't been an influx of Romanian and Bulgarian workers since the restrictions on free movement were lifted at the beginning of the year?  No?  Thought not.  To listen to Danny Alexander though, you would have imagined he and the rest of the main political parties had always rejected the idea there would be a similar movement of labour as when the A8 countries joined back in 2005.  "Gives the lie to UKIP's scaremongering," apparently.  Forgive me for having a memory slightly longer than a gnat, but that most certainly wasn't the message coming across last year, when politician after politician lined up to say they were taking the issue very seriously indeed, and people were right to be concerned. Didn't Tory backbenchers force a vote in an attempt to reintroduce the restrictions? Were they told to stop being so damn silly? Ask a stupid question.

Not that we should think this one survey puts the matter to rest. The numbers might yet pick up, and it could be there have been a few thousand unemployed Bulgarians/Romanians who've made the journey without being counted by this particular survey. That there's been a drop in the first quarter seems a good indication this probably isn't the case, and bears out what some of us argued: why would they come here when the whole of Europe would be open to them? The fall is probably attributable to some moving closer to back home, the countries that had more stringent visa programmes now being as open as everywhere else.

Besides, the issue never was actual immigration, as I doubt Farage or the tabloids believed their own rhetoric, unless they fell into doing so after repeating it so often. It's that those 26 million Europeans can and could come here and we can't do anything about it. Anyone making just the economic argument is part of the problem, not understanding it's the speed of change, the perception of unfairness, the stories about migrants working for a pittance, putting locals at a disadvantage.  What does it matter if it's not affecting you personally when you simply know it's happening?

There is always something easier to blame.  It's all the stranger when you consider the latest employment figures suggest the coalition might be encouraging something on the scale of the parking of the long-term unemployed on incapacity benefit in the 80s.  Scratch beneath the headlines of a "jobs boom" and the most people in work ever, and the massive rise in the number becoming self-employed stands out.  In the year to March, 375,000 designated themselves as such, more than the number entering work in the private and public sectors.  This has been hailed by some within the coalition as a example of entrepreneurial zeal, only research by the TUC suggests the number starting their own business has in fact fallen.

Some of this rise can be explained perfectly normally, with agency workers for instance being pushed into self-employment.  Others have set themselves up on eBay, selling the odd thing to keep the wolf from the door and away from the ever harsher Jobseeker's Allowance regime.  Another explanation becomes clearer once you take a look at the also released today numbers of those sanctioned, i.e., had their benefits stopped in the last three months of 2013.  Incredibly, this had risen to 227,629, or almost a quarter, yes, a quarter of those who were claiming JSA in November.  Back in February of last year there were reports Work programme providers were pushing people into self-employment, getting the clients off their book, a payment for their company and delighting the DWP in the process.  The "customers" were told to claim working tax credit, especially if they had children as the additional child tax credit would almost certainly take their overall payment above the amount they would get normally on JSA.

With Jobcentre advisers under intense pressure to issue sanctions for non-existent infractions, life on any sort of income, even if below the £72.40 a week pittance JSA provides suddenly becomes attractive.  This also ties in with the crash in earnings of the self-employed since the recession, not all of which can possibly be put down to an increase in people fiddling their incomes.  With the ironically named "Help to Work" scheme rolled out at the end of last month, the aim of the programme being fairly transparently to stop those who have been out of work for 2 years claiming at all, or to sanction them when they fail to show up at the Jobcentre every day, it wouldn't be a surprise if the more sympathetic at the dole office were informing their customers of this almost government backed alternative.  Keep in mind also that those on workfare schemes are counted as in work, rather than unemployed, and the fall in unemployment no longer looks quite so impressive.

The only problem for the coalition (as opposed to those who are being left reliant on food banks, which the DWP insists is not due to the mass sanctioning of JSA claimants) is this dodge can't last, thanks to Iain Duncan Smith's own Universal Credit wheeze.  As Johnnyvoid explains, once fully rolled out only those earning the equivalent of someone working full time for the minimum wage will qualify for the UC replacement for tax credits.  Should UC ever be fully introduced, or indeed if the Tories are still in power, this has the potential to suddenly and apparently inexplicably increase the unemployment rate.  Hopefully by then Labour or even UKIP might have realised a real scandal is hiding in plain sight.

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