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Aleksi Knuutila is a researcher in the Valuing What Matters programme at nef
Some commentators believe that the worst of the current recession is behind us. Whether this is true or not, we can be sure that its full social consequences have not yet been felt. People are still losing their work, and unemployment may well rise to 3 million next year. Drastic cuts in spending may make this harmful trend worse.
As previous nef research expected, the recession increases the gap between wealthy and poor areas. Recent research by the Joseph Rowntree Foundation the communities that already had highest unemployment have suffered the largest losses of jobs. These areas don’t suffer only from a lack of employment. The downturn has also forced over half of local authorities to reduce their staff and cuts services. The poorest neighbourhoods suffer from both job losses and a cut in the services that support them.
In the form of benefit payments, billions of pounds are spent on these areas. These resources succeed in keeping their recipients out of the gutter. At the same time, benefit payments constrain claimants’ possibilities to improve their lives. Our social security functions more like a trap than a ladder, and is fuelling the deprivation of poor communities.
Welfare reform has for long focused on making work pay. nef’s new report, Benefits That Work, shows that purely financial calculations don’t capture what matters to the unemployed. Benefit claimants are above all concerned that accepting work will make their life more insecure. Benefits systems are function like an on-off switch; either you are on it or not. This makes it insensitive to the fickle and uncertain nature of today’s labour market. Taking up a job with irregular hours and no employment protection risks leaving people penniless.
The benefits spend could be channelled so that it allows people to improve their own communities while helping them to move towards employment. Benefits That Work presents an Social Return on Investment (SROI) analysis of an innovative scheme to make the happen. With the Community Allowance, community organizations would be able to hire unemployed people to work with them for the good of their area. The participants would have their benefits secured for a year, and would be able to earn a small, capped income on top of them. Protecting the current level of benefits would allow the claimants, with the support from the community organization, to focus their efforts on moving towards the labour market.
What makes the Community Allowance effective is that it plays up the strengths of the claimants. Many employment schemes offer subsidized work placements for the unemployed. They often leave the participants feeling stigmatized, as if they would not be good enough for the work without government footing the bill. In contrast, Community Allowance engages the unemployed in work that they are best placed to perform, due to their close connections with the neighbourhood or their capacity to act as positive role models.
Our SROI analysis of the Community Allowance shows that for each £1 invested into it, £10 of social value is created. This extra value is received by the participants, their communities and families. The state is likely to recuperate more than the resources necessary to run the scheme. Channelling the benefits spend so that it works for the good of deprived will take the edge off the ruin of the downturn.
Dr Victoria Johnson is a researcher on the climate and energy team at nef.
With a government decision expected any day now, the debate about the proposed third runway at Heathrow Airport is going right to the wire. As activists set up their picnic rugs in the Departures Lounge to protest the damage that the expansion would do to the local community, to quality of life in London and – most dramatically – to the world’s climate systems, the backlash from pro-expansionists has begun.
There are plenty of arguments voiced loudly across the press, so let’s just pick two of them. The first is the economic argument. Business leaders are currently urging ministers to approve the plans to expand Heathrow on the grounds that a new runway is vital if Britain wants to remain competitive, especially when the country is facing a recession if not depression. Businesses in London, they say, will suffer if the airport is improved and enlarged. The second argument is more of a class thing. It hasn’t escaped notice that the some of the anti-aviation protestors have university degrees from places like the University of Cambridge. This has prompted a glut of name-calling: activists from Plane Stupid and Greenpeace have been branded “middle-class militants“, “agitated bourgeois insiders“, the “bolshie Barbour brigade” and “upper crusties.” Because they’re posh – the argument goes – they don’t realise the impact that their demands will have on ordinary people who just want to take a holiday in the sun. According to Times columnist and spiked editor Mick Hume, the activists who blockaded Stansted Airport are “green meanies who pray that the recession makes us too poor to travel“.
Two recent nef reports address these arguments directly. In Plane Truths, a report nef produced with the World Development Movement in September last year, we examined the economic case for airport expansion. WDM has calculated that £10.4 billion was lost to the Exchequer in 2007 as the result of tax exemptions for the airline industry on things like fuel and VAT. To put this in perspective, this is double the amount of money needed to insulate the whole of Britain’s housing stock. It’s 120 times more than the amount of money which the government currently spends on the research and development of renewable energy technology. What’s more, the rise of cheap flights has benefitted the rich, not the poor. Plane Truths undermined the claim that budget airlines have democratised travel, making it easier for people with less money to fly more. Research at a London airport showed that in 2005, people from the highest soci0-economic groups took 40% of all low-cost flights, even though they make up only 24% of the population. People with the lowest incomes fly the least – only 7.7% of all low-cost flights are taken by people from these groups, even though they account for 32% of the population. Flying remains a perogative of economic elites, not an opportunity for the poor as is so often claimed.
And, as our latest report Tackling Climate Change, Reducing Poverty shows, it is the poorest people in the UK who will be worst affected by climate change. Because people on low-incomes tend to have poorer health and worse housing conditions, they are more vulnerable to the effects of climate change, such as heatwaves and flooding which will lead to an increase in diseases and will damage houses. So taking action to stop climate change won’t punish the working class: if done correctly, it could act as a catalyst for new jobs and lead to improved housing and better public transport.
The class argument collapses even further when you consider just how much damage climate change will wreak on the livelihoods of people living in the developing world. If Mick Hume and others were genuinely concerned about the world’s working class, they’d understand that it’s the poorest people in the global south who will feel the brunt of climate change. For example, a 2006 study of 4,000 extreme weather events between 1980 and 2002, found that the poor, and rural people in poor countries suffered death, homelessness and displacement from climate-related disasters to orders of magnitude ranging from 10 to 100 times that of wealthier countries. nef’s own analysis of the impact of climate change on developing nations can be found in our Up in Smoke reports.
Other pro-expansionists will claim that aviation will bring economic growth to developing nations, our research in Plane Truths found that most of the money spent by tourists in popular destinations such as the Maldives, Kenya and the Dominican Republic ends up in the pockets of multinational hotel chains and tour operators rather than to the local economy. As much as 75p from every pound.
We need a Green New Deal to revive the economy, not more transportation dependent on dwindling supplies of fossil fuels. So as the arguments in favour of airport expansion crumble, and the threat of runaway climate change looms ever closer, we need to take urgent action to stop the expansion of Heathrow, of Stansted, of any other airport. Today, Greenpeace, along with impressionist Alasdair McGowen, actor Emma Thompson and former editor of the Ecologist Zac Goldsmith, have bought a field right in the middle of the proposed third runway site at Heathrow. There can only be four signatures on the deeds, and hence only four legal owners of the land, but thousands more can sign up as beneficiary owners. Greenpeace is offering you a stake in plot for free. Yesterday, 5,000 people signed up, including George Monbiot and John McDonnell MP. Adding your name takes 30 seconds. Win the battle, and we all stand to benefit.
Andy Wimbush is nef’s Communications Assistant and blogmaster.
Another busy week for the Green New Deal as Japan announces plans to create “millions” of jobs in the green technology sector. Environment Minister Tetsuo Saito told reporters that he had received orders from Japan’s Prime Minister to “draft a Green New Deal plan”. More on this at Bloomberg.
In the US, Barack Obama has given his first public address after being elected in November. Last Thursday he revealed some of his plans to help the ailing American economy, including several hints of a Green New Deal:
“To finally spark the creation of a clean energy economy, we will double the production of alternative energy in the next three years. We will modernize more than 75% of federal buildings and improve the energy efficiency of two million American homes, saving consumers and taxpayers billions on our energy bills. In the process, we will put Americans to work in new jobs that pay well and can’t be outsourced – jobs building solar panels and wind turbines; constructing fuel-efficient cars and buildings; and developing the new energy technologies that will lead to even more jobs, more savings, and a cleaner, safer planet in the bargain.”
Thanks to Beth Daley and Jeremy Williams for the tip. You can read the full text of Obama’s speech here.
Closer to home, some founder members of the Green New Deal Group had a letter in the Guardian last week about the inadequacy of Gordon Brown’s action on green jobs thus far. And today, leading environmentalists – including nef’s Andrew Simms – have accused the government of destroying thousands of job opportunities by failing to support low carbon technology with subsidies.
The reality is that action on climate change is crucial if we are to weather the recession. A report published by nef today on behalf of a new coalition of environment and social justice NGOs argues that substantial green investment would combat the downturn and lift thousands of people in the UK out of poverty. The poorest people in this country will suffer hardest from the effects of climate change, such as heatwaves and flooding. But if we take intelligent action now to cut our carbon emissions, there could be benefits to people on low-incomes. Re-skilling for green jobs would tackle unemployment, home insulation programmes would fight fuel poverty, and improvements to low-carbon public transport would help those without cars.
The report, Tackling Climate Change, Reducing Poverty is available to download for free from the nef website.
Eilís Lawlor is the acting head of the Valuing What Matters team at nef
Results may not have been as bad as expected but still made for dismal reading in last week’s OECD report on inequality. At a time when the rewards of the rich are being called sharply into question, the UK still has one of the highest levels of income inequality in the developed world and social mobility is static. The rate at which inequality has widened is slowing, which is not the same as the gap narrowing. What we already knew has been confirmed: the proceeds of the global economic boom that is now unravelling have gone disproportionately to the already wealthy.
Any equalisation of incomes, however small, is to be welcomed but the media coverage of this missed the most salient point of the report: the gap between rich and poor has grown in more than three-quarters of all OECD countries over the past two decades. Have we and our media become so complacent with wealth accumulation in the hands of the few that this is considered positive, or are we just desperate for some good news?
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