New Labour is not dead. It is punching itself. posted by Richard Seymour

The latest blowback for New Labour, amid its latest sordid attack on the poor, is the defection of former City investment banker David Freud to the Tories. Freud was hired by the right-wing Work and Pensions secretary James Purnell (who was, literally, born in the City of London) to help further privatise the welfare system. The big idea is to put companies in charge of the long-term unemployed, effectively handing over taxpayer money to them so that they can 'help' the unemployed find work. Recently, it was reported that the policy was nearing collapse because companies say there aren't enough vacancies, and they want more money up-front (as they always do). The objection that there aren't enough vacancies must have embarrassed Purnell, who had been bragging of the number of vacancies available at job centres, despite the fact that the number available was greatly reduced compared to previous years. However, Purnell must know perfectly well that for such vacancies to be filled, there need to be people of requisite skill and qualifications within commuting distance of where the post is. It is easy to point to vacancies, but much harder to match the job to a suitable person. Further, it is simply staggering that a policy supposedly intended to reduce unemployment by forcing the incapacitated to seek existing vacancies and paying private companies to 'help' them, was still being driven through government at a time when the labour market is manifestly collapsing, and unemployment soaring.

At any rate, Freud is being offered the job of shadow Work and Pensions secretary. If the Tories win the next election, as current polls predict they will, then this mountebank will be given a free hand to tear up the welfare system with the backing of an even more aggressive governing party. As it is almost never recounted in the newspaper hagiographies, I would remind you that David Freud is an accomplished shakedown artist, from the EuroDisney finance package to the exorbitant Eurotunnel deal, all of which chicanery left him millions of pounds in the black. And his proposed scheme is a massive shakedown. He has explained that companies could expect to gain "masses" of money from the deal. By his calculations, it would be economically rational to spend up to £62,000 on getting someone on incapacity benefit into work, and he believes that up to 1.4m could be forced into jobs. If his figures were right, that would give successful bidders at least £86.8bn.

Of course, there is no reason to believe that Freud has got his figures right, because he has demonstrated nothing but complete ignorance of his topic. Hence, he moans in the linked Telegraph interview that disability tests are "done by people’s own GPs", which is false - GPs are appointed by the Department of Work and Pensions (the one that Freud has been working for) and their findings can be overturned by the government on appeal. Elsewhere, he claimed that at least two thirds of those on incapacity benefit are not entitled to receive the benefit. As the Child Poverty Action Group charity pointed out, Freud's claims were ignorant rubbish, but they would imply handing over £167bn to private companies, which might just be the greatest privatisation heist in history. In fact, a coalition of charities, including the Royal National Institute for Deaf People, the mental health charity MIND, the Disability Alliance and others, have all censured the government for procuring the services of such a complete know-nothing. Bear all this in mind when you read sentences containing the words, "Freud's expertise on the welfare system" (from The Guardian report in the first link).

The disabled are, of course, not the only ones targeted in New Labour's proposed legislation. Income Support is to be abolished, with all of its recipients forced onto Jobseekers' Allowance. In real terms, this allowance has been shrinking for years according to the Department for Work and Pensions. In 1987-88, it was worth approximately 16% of average earnings. In 2007-08, it was just over 10% of average incomes. At £60.50 per week, it is a pittance to live on. Workfare schemes of various kinds will also be piloted, and lone parents will be put on notice that when their children reach the age of eleven they will be expected to seek work. We also know that the government has it in mind to oblige those who remain on Jobseekers Allowance for more than a year to perform menial labour. Now that the government has lost its workhouse guru to the Tories, it has the opportunity to indefinitely delay, if not drop altogether, these proposals. After all, aside from these measures decimating the Labour voting base, proceeding with the same legislation now will hand the Tories a massive propaganda coup. They will have their 'inside man' touring the television stations, and press briefing rooms, explaining how the government was too chicken to do everything he suggested in the name of 'welfare reform'. I fear, however, that New Labour will learn nothing until it experiences a bruising electoral defeat. And even then, you can be sure that the Blairites will be all over the newspapers arguing that Labour lost because it 'lost touch with middle class swing voters' and failed to keep business onside. The only thing that could possibly change this miserable prospect would be the independent self-assertion of organised labour on the basis of some issue other than 'foreign workers'.

Labels: david cameron, david freud, gordon brown, james purnell, new labour, tories, trade unions, welfare