Gordon Brown has promised to help 500,000 people into work or training as part of the government’s plans to deal with the recession.
Brown met with union leaders and bosses at a jobs summit on Monday of this week. He announced that the government is to give £2,500 to firms that recruit people who have been unemployed for more than six months.
The government has put aside £400 million out of its £1 billion contingency fund to pay for this policy.
This comes on top of the 100,000 public works jobs that Brown has pledged to create to tackle unemployment. But Brown’s response does not match up to the scale of the crisis.
Hundreds of thousands of workers have already lost their jobs and commentators predict that unemployment could rise to three million this year—up from 1.86 million at the end of last year.
Brown’s summit came as both the furniture retailer Land of Leather and Newcastle Productions, the company behind Findus frozen foods, were placed in administration—threatening over 1,200 jobs.
The distribution company Wincanton is set to axe around 900 jobs.
The Waterford Wedgwood china and crystal firm, which has just collapsed, also announced that it was to cut 367 jobs in Britain. This will mostly hit workers at its site in Barlaston, near Stoke-on-Trent.
The Bank of England last week cut interest rates to 1.5 percent in an attempt to “stimulate” the economy—it has cut rates by 3.5 percent since October.
It is doubtful that this or the government’s scheme will work.Companies that are struggling due to the crisis are unlikely to start employing more workers.
Instead of looking to private companies to deal with unemployment, the government should be ploughing the money, and much more, into its own job creation scheme.
Dave Prentis, the leader of the Unison public sector union, has called on Brown to halt job losses in the public sector and expand apprenticeships in areas such as local government.
Jobs could be created to deal with the increased need for debt counselling and housing advice. But councils are looking to make redundancies in these areas.
While Brown’s plans to some extent recognise the depth of the crisis, it will take much stronger policies to ensure ordinary people do not suffer in the recession.
A major fight is needed from the trade union leaders and workers to win this.