New Deal (UK)

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Alternative meaning: For United States President Franklin D. Roosevelt's legislative agenda see New Deal

The New Deal is a programme of active labour market policies introduced in the United Kingdom by the Labour government in 1998. The purpose is to reduce unemployment by providing training, subsidised employment, and voluntary work to the unemployed. Spending on the New Deal was £1.3 billion in 2001.

The New Deal architecture was devised by LSE Professor Richard Layard, who has since been elevated to the House of Lords as a Labour peer. It was based on similar active labour market policies in Sweden, which Layard has spent much of his academic career studying.

[edit] Purpose

The New Deal introduced the ability to withdraw benefits from those who refused "reasonable employment". A complementary project was introduced in 1999, the Working Families Tax Credit. This is a tax credit scheme for low income workers which provides an incentive to work, and to continue in work.

Professor Richard Beaudry, from the Department of Economics at the University of York, defined as follows the New Deal in a 2002 paper, Workfare and Welfare: Britain’s New Deal (pp.8-9) : "The New Deal reforms promise eventual reform of welfare assistance for all benefit recipients."

Although originally piloted on the youth unemployed (19-24 year olds), the New Deal programmes have now been expanded to include many different groups. These include:[1]

• New Deal for Young People (NDYP) – has received by far the greatest proportion of New Deal funding (£3.15 billion through to 2002). It is targeted to unemployed youth (aged 18-24) who have been unemployed for 6 months or longer.

• New Deal for the Long-term Unemployed – is targeted to adults (aged 25+) who have been unemployed for eighteen months or more. In terms of funding, £350 million was allocated through to 2002.

• New Deal for Lone Parents – addresses, as the name suggests, the employment reintegration needs of single parents with school age children. £200 million has been directly allocated to the program, not including additional assistance for child-care.

• New Deal for the Disabled – assists those receiving disability benefits to return to work. £200 million has been budgeted for this program through 2002 (Peck, “Workfare” 304-305).

• New Deal 50 plus - for those aged 50 year old and above.

• New Deal for Partners - for partners of benefits claimaints.

• New Deal for Musicians - for aspiring unemployed musicians.

The greatest emphasis of the government so far has been the NDYP, which is obviously being used as a pilot phase for the more ambitious New Deal reforms with other groups. The NDYP begins with an initial counselling session, referred to as Gateway, that focuses on improving job search and interview skills. This training is provided by an external organisation such as CSV or A4e. If the search for employment is still unsuccessful after the Gateway sessions, in order to receive benefits, one of four options must be chosen:

• A subsidised job placement. The subsidy is £60 per week, and lasts 6 months; a £750 training allowance is also available to participants.

• Full-time education and training, for up to 12 months.

• Work in the voluntary sector.

• Work with the Environmental Task Force.(DWP website; Peck, “Workfare” 304; Glyn 53)

Participation in one of the four options is mandatory in order to receive benefits."

Australia has implemented strikingly similar unemployment/welfare policies, which also have official titles based on informal, colloquial terminology. (See links below).