Meet the most influential adviser you’ve never heard of. Paul Gregg’s mission is to get Britain back to work.
Source -Daily Telegraph
With no connection to sausage rolls – it was John Gregg who wanted to deliver yeast and eggs to the people of Newcastle by pushbike – you could be forgiven for not knowing who Paul Gregg is. His title, chairman of the Labour Market Advisory Board, will not have you reaching for Who’s Who.
Gregg is a superstar in one field – a very important one. A former adviser to Gordon Brown who turned up for his first day in his new Treasury job dressed “as a punk” according to Ed Balls, he has long been the go-to man for the answer to the knottiest of government questions. How to move people off unproductive benefits and into productive work.
Labour has turned to him again. With little fanfare Liz Kendall, the Work and Pensions Secretary, announced that Gregg would be helping the Government formulate its policy on record levels of inactivity amongst the working age population. The Advisory Board “will provide advice to the Work and Pensions Secretary and offer insight, expertise, and challenge to the department’s plans”.
Challenge will certainly be necessary. Labour’s instinct is to spend more and keep pressure groups off their back. Rosie Duffield’s resignation not only cited freebie sleaze but demanded a reversal of the cut in winter fuel allowance and a restoration of child tax credit beyond the present two-child limit. To paraphrase Margaret Thatcher, socialists always end up running out of other people’s money.
Welfare to work is the next storm approaching. Get it wrong and the slow burning crisis of joblessness, mental stress and economic degradation will continue. Starmer, who has so far shown the political sure-footedness of an hour old lamb, will see his approval ratings fall even further.
Before we come to the possible solutions – What Gregg Wants – it is worth fathoming the reasons for the present state of affairs.
In the heady days of February 2020, just after the Foreign Office had banned all but essential travel to Wuhan, a city in China few had heard of, because of a disease that even fewer understood, the UK achieved a significant record.
The number of people in work reached a record high. And the number of people out of work and not actively looking for a job reached a record low.
A few days before, the first two UK cases of Covid-19 were announced, in York. By February 29, the number had risen to 23, the first death being recorded less than a week later.
By the end of March, 400 people were dying a day; pubs, restaurants and theatres had been forced to close; businesses were shuttered and the Treasury announced that the state would pay 80 per cent of the wages of people who suddenly did not have a job. We were all ordered to “stay at home”.
Britain has yet to recover from the disasters of Covid, whether the disease itself or the measures that were put in place to control it. Over two years the public became inured to state intervention in their lives and huge amounts of government spending to support it, money which arrived whether you were doing anything productive, or simply sitting at home. Levels of physical and mental illness leapt and many became stuck in non-working households on non-working streets, reliant on benefits to make ends meet.
More than 9 million people are now economically inactive, which means not in work or looking for work. The 1980s saw mass unemployment of just over 3 million. It was headline news. Today, a record 2.8 million are out of work due to long-term sickness and 900,000 young people (one in eight) are not in education, employment or training.
Spending on sickness and disability benefits is set to rise by £30 billion over the next five years – equivalent to the amount we spend on primary school education every year.
In two weeks the Office for Budget Responsibility’s Welfare Trends report will be published. My sources tell me it will make for grim reading, revealing that under the Tories work capability assessments collapsed. Too few were asked “could you go back to work?”
In the 19th century, Tsar Nicholas I described the Ottoman Empire as “the sick man of Europe”. In the 1960s, the UK of strikes and high inflation picked up the mantle. It has been hung around our neck once again, with employment levels post Covid not back to pre-pandemic levels. Our performance is the worst in the G7 club of rich nations.
Work is good for you. Study after study shows that being in employment leads to better health, both physical and mental. Beyond the individual, the more people that are in work, the more the economy grows as businesses invest. Tax receipts boom and money for public services follows.
Rachel Reeves, the Chancellor, knows all this. When she was shadow work and pensions secretary under Ed Miliband she vowed to slash the benefits bill.
“Nobody should be under any illusions that they are going to be able to live a life on benefits under a Labour government,” she said. “If you can work you should be working, and under our compulsory jobs guarantee if you refuse that job you forgo your benefits, and that is really important.”
Many on the Left disliked her tough stance. But it is the right one. With the correct support, many people who are not working could be.
In a recent paper on fixing the problem, Gregg was clear. “Incapacity in the welfare system is policed by testing and sanctions, employment support programmes are piecemeal and late to kick in, and financial incentives to work are extremely poor,” he wrote for The Health Foundation.
“Efforts should focus on increasing economic opportunities and improving the health of the working-age population, rather than solely reducing welfare costs. It will be important to learn from past reforms by prioritising early intervention, making work pay and engaging with employers to support people with health challenges.”
Starmer and Reeves have struggled to formulate policies that survive the first contact with reality. Unlike their haste over the winter fuel cut, it is welcome that they are proceeding more slowly this time, with a White Paper expected around the time of the Budget. Concrete proposals for tackling the problem – making benefits more conditional on looking for work and incentivising business via tax-cuts to be more proactive – will be tested.
And Paul Gregg will have his moment.
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