British Government Proclaims a ‘New Deal’ to Get People Off the Dole

Yellow posters proclaiming “New Deal” gleam in the windows of the government job agency in the cheerless winter afternoon.

Inside, Michelle Mason, who has seldom worked since leaving school, waits to learn if she’s landed a part-time job in a pet shop that pays about $115 a week.

“If I don’t get this particular one, there’s always something else around,” she says vaguely.

This time, what’s around will be some very specific choices. And if she doesn’t take one of them, her welfare payments will be slashed.

Mason, 21, is one of approximately 122,000 young Britons being summoned to job agencies under the Labor Party government’s first big welfare-to-work project. Those being called have been out of work at least six months and are between the ages of 18 and 24.

Their options are:

* Take a job at a business, with employers sometimes subsidized by the government.

* Work as an unpaid volunteer on a public service project or a low-paid helper on a state-sponsored environmental project.

* Enroll for up to a year’s education or training.

Refuse those options and their welfare payments get cut by up to 40%. No discussion.

The New Deal for young people is part of Prime Minister Tony Blair’s vow to “reform” welfare, a challenge that could make or break his fledgling Labor government.

If he succeeds, Blair’s legacy likely would be more important than that of Margaret Thatcher, Britain’s right-wing Conservative Party leader. She broke the power of the unions in the 1980s and forced the once-socialist Labor Party to embrace the free market. Meanwhile, as in much of Western Europe, welfare spending soared.

During the Conservative Party’s 18-year hold on power, which began in 1979, social security spending more than doubled. Now, at the equivalent of $155 billion a year, it consumes one-third of the entire government budget.

“Over the last 18 years, we have become two nations--one nation trapped on benefits, the other paying for them,” Blair declared in early January as he began a nationwide tour to sell welfare reform to Labor Party activists.

The Conservatives chipped at the edifice of the welfare state, but Blair wants to overhaul the whole thing. He wants to make the chronically unemployed work but also increase benefits for those on the poorest level--people making half or less of the average Briton’s earnings of $32,000 a year.

Under the current system, a range of benefits is paid irrespective of income--for children, for disabilities, for widows, for maternity leave, for retirees. The result is that three of every 10 Britons, from super-rich to poorest, automatically get some form of welfare.

Among them, for example, is the Duchess of Westminster, whose husband, among the world’s richest men, owns most of London’s elegant Belgravia district. She is entitled to the same allowances for her four children as any other mother--$18 a week for her firstborn, $14.65 for each of the others.

For such benefits, all workers pay national insurance, generally around 10% of their salaries.

But critics argue that this should be regarded as simply another tax and that people with middle-class incomes and above should be cut off from universal handouts.

“The National Insurance system is an empty relic of the sentimental old left,” wrote Polly Toynbee, an assistant editor of The Independent newspaper. Upon the death of her husband, also a well-paid journalist, she got an automatic weekly state payment of $200 for being a widowed mother.

Meanwhile, the Labor Party’s left wing regards welfare as sacrosanct, resists the notion of income-based qualifications as humiliating for the poor, and is simmering at what it sees as Blair’s imminent betrayal of Labor’s most cherished ideals.

The grand plan over what to do about the welfare state, which was founded in 1945 by a Labor government and is a given in British life, has yet to be announced.

One of its inaugural components is the welfare-to-work program, which Blair calls the “biggest ever attack on long-term and youth unemployment.”

It is being financed with the $5.2 billion in windfall taxes reaped from utility companies like British Telecom that prospered after being sold to private enterprise by the Tories.

In Walsall, about 110 miles northwest of London, Michelle Mason is participating in one of 12 pilot projects around the country. More are due to follow for older long-term unemployed.

Mason left school with poor grades and took a year’s course in “animal care” at a technical college. She worked in an electrical goods shop as a clerk, her job subsidized under one of the New Deal’s many Conservative Party-inspired predecessor programs. That didn’t last, though, and mostly it’s been welfare ever since--$63.50 a week for a young person with no dependents living at home.

Mason is among the Walsall project’s more promising candidates. Of the rest, up to one-fourth have literacy problems or criminal records. About 13% acknowledge abusing drugs.

Margaret Tovey, the Employment Service’s deputy director for the area, which encompasses about 3,000 young, long-term unemployed, has seen it all before.

But the New Deal, she says, is something new. There is money, for one thing, and a small army of personal advisors who repeatedly interview all candidates, direct them to one of the available options and keep in touch with their employers.

The hope is that after six months, the length of the program for each person, some will have permanent jobs.

If not, however, they again will be entitled to full welfare--a much gentler alternative than the reforms instituted in the United States by President Clinton that put a lifetime cap of five years on welfare benefits.

“We don’t want the revolving door,” Tovey said. “And New Deal is different. There’s enthusiasm among young people and employers, there’s extra resources and there’s individual treatment. . . . We see it as long-term, and that will be the key test--not how many, but how long it lasts.”

Blair’s first move toward reform was a cut in November of up to $16.70 a week in special benefits to single parents.

The next apparent target is disability allowances, which are handed out for everything from backaches to blindness. Although the nation has gotten healthier, claimants have more than doubled in 15 years to 2.1 million.

Not long ago, a group of disabled people overturned wheelchairs and threw red paint outside Blair’s Downing Street residence in a bid to put the allowances off-limits.

“I am beginning to see why most politicians tend to steer clear of welfare,” Blair said. But, he added, “If the rewards come in the next century . . . then it will have been worth the controversy.”