After the Financial Crisis of 2008, Gordon Brown was frequently chided for the suggestion he made, while Chancellor, that the era of ‘boom and bust’ had come to an end under his stewardship. A similar, though less well known, comment was made by Phillip Hammond who, when he was Chancellor in 2017, suggested that in the UK ‘there are no unemployed people… this economy has become a jobs factory’.
This statement was far from true at the time as there was 1.42 million unemployed when Hammond made his claim with many more chronically underemployed. His comment, like Brown’s, crucially reveals the extent to which politicians tend to only plan for the immediate future and ignore the possibility of past events repeating themselves.
Regardless of the extent to which Hammond’s confidence was justified at the time, unemployment is set to become the greatest economic crisis that this government faces. The Office for Budget Responsibility has estimated that unemployment will increase by ten percent in the second quarter of 2020, meaning that 2.1 million more people will find themselves out of work. If the government wants to deal with this potential crisis it must be proactive and should embrace the idea of a universal jobs guarantee.
This concept is a far less well-known, and therefore less popular, proposition than the oft-cited universal basic income (UBI). This is because whilst a UBI involves the practice of cash transfers to citizens, a universal jobs guarantee would see the government providing stable employment with a decent wage to anyone who was looking for a job.
Many nations pursued versions of UBI whilst they enforced a lockdown to compensate citizens for lost income. Such a policy makes a great deal of sense when people are unable, through no fault of their own, to work. However, it is not the right solution now that we face the prospect of mass unemployment.
A couple of reports from the Social Market Foundation and the Trades Union Congress have put forward plans, or outlines, for how the government could look to pursuing such a policy. Both rightly focus on the value of training in any jobs guarantee programme. However, beyond their emphasis on having new jobs aid local communities and highlighting the importance of the green economy, neither report outlines specific projects which a mobilised workforce could take on.
This lack of specificity is understandable, but if the government is going to pursue such a policy it should focus on using it to support the UK’s infrastructure.
As the furious rows over HS2 and a third runway at Heathrow have shown, Britain struggles to implement the most rudimentary infrastructure investment without protracted stalling efforts. This is in marked contrast to other European nations, something which is demonstrated by the fact that France’s Charles de Gaulle Airport has four runways whilst Amsterdam’s Schiphol Airport has six.
The problems with Britain’s infrastructure are not limited to the lack of any new completed projects. In addition to this very real problem, Britain struggles with the fact that much of its infrastructure is incredibly old and in a state of decay.
This decay was made obvious by the “Beast from the East” cold spell in 2018 which left 200,000 people without water for 4 hours and 60,000 people without water for 12 hours across the UK. This degeneration is likely to accelerate because of climate change.
The National Infrastructure Commission has recently released a report that outlines the importance of ensuring the resilience of UK’s infrastructure, especially in the face of future challenges. The report outlines the necessity for regular surveying and stress testing of infrastructure around the UK to ensure that sectors like energy, water and rail are fit for purpose.
What we can see from the report is that the government has an urgent, and daunting, task ahead of it that the private sector is unable to deal with. The government’s pledged 3 billion pounds for a National Skills Fund could be utilised to train many people in a universal jobs programme to be able to carry out the kind of work outlined in the National Infrastructure Commission’s report. Such work would have the added benefits of aiding local communities, by improving their local infrastructure, and helping to insulate them from the worst possible effects of climate change.
With increasing unemployment in the wake of the coronavirus lockdown, we now can tackle two problems with one solution: a universal jobs guarantee that, at least partly, focuses on certifying the resilience of infrastructure across the country.