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Incentives to relocate jobless? (Tebbit revisited?)

Infinite Chaos

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Unemployed people living in council homes could be offered incentives to move to areas where there are jobs, the work and pensions secretary has said.

Iain Duncan Smith said millions were "trapped in estates were there is no work", unable to move for fear of losing their right to a home.

He told the Sunday Telegraph the system must be more flexible, but did not give a clear commitment to rehouse workers.

Shadow education secretary Ed Balls called the idea "profoundly unfair".
BBC Link

Comparisons to Tebbit's famous / infamous "on yer bike" speech have already (by Labour) been made but I do think there's merit to the current plan - as long as compulsion is not used.

We do have places in the country where there is a long history of unemployment and lack of regeneration (even under left wing Labour govts) - the regional development agencies set up IN 1999 have done some good work but I wonder how much value for money we really got back for the money invested in them.

Thoughts?
 

PeteEU

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Norway has been doing it for a long time now. But they are a bit more brutal. Move or dont get unemployment basically. Not sure if there are incentives/help moving but I suspect there is. Personally I am torn a bit. Europes biggest problem is lack of worker mobility. I am very envious over the USA having such a great worker mobility and that is one of the things we can learn from the USA. For example, in the small country of Denmark, that is only a few 100 km across in any way, you can have unemployment in a field in say the capital and lack of enough workers in that field on the west coast of the country. It is quite common.

Now I understand arguments for and against and the differences in culture between the USA and Europe in general, and hence I am torn between providing incentives and out right forcing people. But I think trying something is a good idea.
 

alexa

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Norway has been doing it for a long time now. But they are a bit more brutal. Move or dont get unemployment basically. Not sure if there are incentives/help moving but I suspect there is. Personally I am torn a bit. Europes biggest problem is lack of worker mobility. I am very envious over the USA having such a great worker mobility and that is one of the things we can learn from the USA. For example, in the small country of Denmark, that is only a few 100 km across in any way, you can have unemployment in a field in say the capital and lack of enough workers in that field on the west coast of the country. It is quite common.

Now I understand arguments for and against and the differences in culture between the USA and Europe in general, and hence I am torn between providing incentives and out right forcing people. But I think trying something is a good idea.

I think one of the things you will notice in the link is that people are living in council houses, hence cheap rent and are worried about moving for that reason. At the moment Housing Benefit, what people on low income can claim for their rent has been reduced. I am fairly ok about that as it seemed to be very high. However for people to move they need to be able to get housing they can afford and there needs to be work for them to do.

I don't think either of these have been sorted out.

Does Norway provide them with affordable accommodation when it forces people to move?
 

Mell

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I think this is how it works, in Germany, where I live too. You have to take a job offer, even if it is in another city, and even if with the expenses involved in moving. We were forced to move, to get a job, after my boyfriend was made redundant. We moved to another city, where he found a new job. The house we got costs the same, as the house we moved from, but it took us a couple of years to pay off the moving expenses. There was the travelling for the job interviews, the month it took to find a new house to live in and alternative temporary accomodation had to be payed for, and there were a number of costly screws ups because of the chaos of moving. The new job didnt provide us with any moving expenses. We were given some moving expenses from the unemployment office, but it was not nearly enough to cover the costs. Thanks goodness we have had more job stability since moving here, so we managed to make our finances healthy again.
 

Mell

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Oh, our situation was not exactly like the ones described in the opening post. We did not live in a council house. Just a regular rented appartment.
 

PeteEU

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I think one of the things you will notice in the link is that people are living in council houses, hence cheap rent and are worried about moving for that reason. At the moment Housing Benefit, what people on low income can claim for their rent has been reduced. I am fairly ok about that as it seemed to be very high. However for people to move they need to be able to get housing they can afford and there needs to be work for them to do.

I don't think either of these have been sorted out.

Well it is not only a council house problem.. by any stretch of the imagination. That is just conservative spin because they love to target said council housing and the people in them. There is just as many if not more who own houses or apartments.

The problem is more fundamental than that. The cost of moving is not cheap by any standard, and often people have houses or appartments that they have a lot of money tied up in and the selling is not easy especially for a profit. Those that are so fortunate to rent also have costs involved in getting out of the rental contracts. So in fact the people in council houses are the easiest to move if needed. So people tend to try to stay in the area of their home as much as possible and resist moving or taking jobs too far away.

On top of that there is the family and friends factor. This factor is a quite big factor that politicians dont talk about but there was a study done years ago in Denmark and it showed that it was the nr. 1 factor for people with the economical factor coming second when asked why they did not move across the country for a job.

Does Norway provide them with affordable accommodation when it forces people to move?

No clue. Doubt it.. some help maybe, but affordable housing.. dunno.
 
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alexa

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Well it is not only a council house problem.. by any stretch of the imagination. That is just conservative spin because they love to target said council housing and the people in them. There is just as many if not more who own houses or apartments.

If we take it from the people who became unemployed in the Thatcher recession and never got jobs again and live in areas which have not been regenerated my guess would be that most would be in council houses, rather than this being spin. They would also have the most to lose. Unless they behave in an extremely anti social manner they have security for life and a fair rent. Obviously where you are dealing only with single people the situation would be different. We have areas throughout the country which have never been regenerated and also we know with the planned cuts that specific areas are going to be hit badly because a larger proportion of the population work in public services.

The problem is more fundamental than that. The cost of moving is not cheap by any standard, and often people have houses or appartments that they have a lot of money tied up in and the selling is not easy especially for a profit. Those that are so fortunate to rent also have costs involved in getting out of the rental contracts. So in fact the people in council houses are the easiest to move if needed. So people tend to try to stay in the area of their home as much as possible and resist moving or taking jobs too far away.

The problem in this country is even more fundamental than that. Forcing people to move somewhere has not been done here since the inter war years. It is not something which is likely to be accepted easily. Also as there are not jobs about I am at a loss as to the point of them moving. I suspect it is just 'softening us up' for something else.

On top of that there is the family and friends factor. This factor is a quite big factor that politicians dont talk about but there was a study done years ago in Denmark and it showed that it was the nr. 1 factor for people with the economical factor coming second when asked why they did not move across the country for a job.

Yes, that had definitely crossed my mind. Moving even when you choose to is reckoned to be one of the most traumatic things you can do. Getting people to move away from family and friends could cause many people serious psychological problems. Again I think the poor would be the one's most hit and I suspect the poor will be the one's if this ever comes into being who will be affected. People who can get good jobs and good money usually don't mind so much moving if that is what they need to do to get started again.


No clue. Doubt it.. some help maybe, but affordable housing.. dunno.

They will need to make a good package if they expect this to be accepted but as there are not the jobs for people anyway, maybe the idea is more to make it look as if the problem is that people won't move.
 
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alexa

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We do have places in the country where there is a long history of unemployment and lack of regeneration (even under left wing Labour govts) - the regional development agencies set up IN 1999 have done some good work but I wonder how much value for money we really got back for the money invested in them.

Thoughts?

I don't know much about this Infinite but I would think regeneration would be a better idea and yes, should have been done before.
 
T

TEC

It seems like a reasonable idea. Hopefully it can be achieved through incentives rather than coercion.

The other solution would be to focus more on creating jobs in areas of high unemployment, but obviously this is easier said than done.
 

PeteEU

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If we take it from the people who became unemployed in the Thatcher recession and never got jobs again and live in areas which have not been regenerated my guess would be that most would be in council houses, rather than this being spin. They would also have the most to lose. Unless they behave in an extremely anti social manner they have security for life and a fair rent. Obviously where you are dealing only with single people the situation would be different. We have areas throughout the country which have never been regenerated and also we know with the planned cuts that specific areas are going to be hit badly because a larger proportion of the population work in public services.

That is a whole other problem really. I understand why the Conservatives are targeting the council houses because it goes against everything they believe. But like it or not, far far from everyone that are unemployed are on said council estates. And that is my point. It is not just a council estate problem. As long as the politicians focus on "council estates" then they will never tackle the problem of labour mobility. Council estate problems are a social issue from the top to the bottom, often created by the private sector and then driven on by the public hehe.. but hey as I said it is a whole other subject really.

The problem in this country is even more fundamental than that. Forcing people to move somewhere has not been done here since the inter war years. It is not something which is likely to be accepted easily. Also as there are not jobs about I am at a loss as to the point of them moving. I suspect it is just 'softening us up' for something else.

Well the only reason to do this is to move people who are unemployed to areas where there is work, else it would make zero sense heh. And for the record it is not accepted anywhere and Norway is the exception.

Yes, that had definitely crossed my mind. Moving even when you choose to is reckoned to be one of the most traumatic things you can do. Getting people to move away from family and friends could cause many people serious psychological problems. Again I think the poor would be the one's most hit and I suspect the poor will be the one's if this ever comes into being who will be affected. People who can get good jobs and good money usually don't mind so much moving if that is what they need to do to get started again.

Being poor or rich does not have much to do with it. A wealthy person can have just as much trouble moving due to not being able to get rid of his/her house without taking a massive loss. And no way can most people live with two mortgages or a mortgage and paying rent elsewhere. And family is the same for rich or poor.. moving far away from them is always very hard and many simply refuse to do that regardless of the consequences. And that is why in theory it is easier to move people from council estates as they are renters most of the time so there is limited financial bindings in the home.

Well going back to housing benefit. I wonder if this country has allowed rental prices to go unrealistically high with paying housing benefit. They will need to make a good package if they expect this to be accepted but as there are not the jobs for people anyway, maybe the idea is more to make it look as if the problem is that people won't move.

Oh it has. Housing prices for buying or renting are a huge problem all over Europe but especially in areas that had insane rises over the last decade.. the UK and Spain for example. In Spain a huge majority of children live at home till their 30s and 40s because they cant afford getting their own place. And that combined failure of politician´s and the market. For example, in Copenhagen the local government has long ago put in rules on new buildings, that they have to be of a certain size (apartments that is). This was done for political reasons as they wanted a better tax base.. they wanted families and wanted to get rid of the "trash" so to say. The result has been massive affordable housing shortage in Copenhagen and a defacto stop for building student housing in a University city... talk about brainless politicians. And this has gone on for 30+ years now and the average rental price of the housing in Copenhagen has gone up and up and the cost of buying is nuts..
 
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alexa

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That is a whole other problem really. I understand why the Conservatives are targeting the council houses because it goes against everything they believe. But like it or not, far far from everyone that are unemployed are on said council estates. And that is my point. It is not just a council estate problem. As long as the politicians focus on "council estates" then they will never tackle the problem of labour mobility. Council estate problems are a social issue from the top to the bottom, often created by the private sector and then driven on by the public hehe.. but hey as I said it is a whole other subject really.

I guess you have a point there.

Well the only reason to do this is to move people who are unemployed to areas where there is work, else it would make zero sense heh. And for the record it is not accepted anywhere and Norway is the exception.

Absolutely, a very strange time to come out with ideas like this when we have around two and a half million unemployed and are just about to make another million or so join them.


Being poor or rich does not have much to do with it. A wealthy person can have just as much trouble moving due to not being able to get rid of his/her house without taking a massive loss. And no way can most people live with two mortgages or a mortgage and paying rent elsewhere. And family is the same for rich or poor.. moving far away from them is always very hard and many simply refuse to do that regardless of the consequences. And that is why in theory it is easier to move people from council estates as they are renters most of the time so there is limited financial bindings in the home.

I am unsure about it being as difficult to move when you earn a good income. Yes, now is not the best time to sell you house but you could rent out your old house and buy a new one at a discount paying for it with the rent from your old - if of course you had paid that off. Edit: and I guess most people haven't so I get your point.

If I lived in a council house, I would not want to give it up unless it was in a violent inter city scheme. People do have a lot to lose in giving up council houses, arguably more than people selling and moving. Now more council houses, like Labour had at last planned, would help with this problem. I think we desperately need affordable housing for low earners.


Oh it has. Housing prices for buying or renting are a huge problem all over Europe but especially in areas that had insane rises over the last decade.. the UK and Spain for example. In Spain a huge majority of children live at home till their 30s and 40s because they cant afford getting their own place. And that combined failure of politician´s and the market. For example, in Copenhagen the local government has long ago put in rules on new buildings, that they have to be of a certain size (apartments that is). This was done for political reasons as they wanted a better tax base.. they wanted families and wanted to get rid of the "trash" so to say. The result has been massive affordable housing shortage in Copenhagen and a defacto stop for building student housing in a University city... talk about brainless politicians. And this has gone on for 30+ years now and the average rental price of the housing in Copenhagen has gone up and up and the cost of buying is nuts..

I didn't realise other country's had the same problems with housing as us. You know what, I had never thought of the advantage to governments of the high taxes on expensive housing!
 
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PeteEU

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I am unsure about it being as difficult to move when you earn a good income. Yes, now is not the best time to sell you house but you could rent out your old house and buy a new one at a discount paying for it with the rent from your old - if of course you had paid that off. Edit: and I guess most people haven't so I get your point.

Well it depends on the situation of course. If you have a lot of money tied up in a house or apartment then it gets harder and harder to move. Say you have a house that is mortgaged. The cost in selling it and moving can be considerable .. that is if you can sell it. Add to that people who live in a relationship, where one partner does work and can keep up the payments.. moving will become near impossible. And moving and renting out the old place.. there is a window where the costs are rather large.. and often too large.

If I lived in a council house, I would not want to give it up unless it was in a violent inter city scheme. People do have a lot to lose in giving up council houses, arguably more than people selling and moving. Now more council houses, like Labour had at last planned, would help with this problem. I think we desperately need affordable housing for low earners.

Every country needs that. But affordable housing means low tax income.. and hence is unwanted. As for living in a council house being a good thing.. not really.. it is cheap and with cheap comes lack of maintenance and crime. This is almost universal across Europe.

I didn't realise other country's had the same problems with housing as us. You know what, I had never thought of the advantage to governments of the high taxes on expensive housing!

They are very similar on so many levels since most countries have used the same reasoning and gone through the same evolution on council housing. As for the tax income... look at it this way.

You have several types of households.. young people (students) that give next to no tax income, singles on the dole that give next to no tax income, working singles that give some income, families that give considerable income and pensioners that give next to no income. Local government will always try to get as many working singles who can afford expensive housing and families that also can.. while trying to get rid of the others. If you look at the local areas with the highest wealths in a country... it aint singles living there or students :)
 

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Every country needs that. But affordable housing means low tax income.. and hence is unwanted.

It is needed. It is vital. Every place needs people who do low paid work and unless we change this so that everyone gets a similar wage that will remain. Hence we have people who either have council houses or who get housing benefit. Shelter is already concerned that the reductions in housing benefit allowed in London - and they are still £400 a week, will result in people needing to move out and ghettos being formed in the suburbs.

As for living in a council house being a good thing.. not really.. it is cheap and with cheap comes lack of maintenance and crime. This is almost universal across Europe.
They are very similar on so many levels since most countries have used the same reasoning and gone through the same evolution on council housing.

They certainly varied. In London for instance a lot of council houses were not built to be council houses but were bought by the council. Obviously people snapped them up and bought them at a huges saving. That has been a problem from Council house sales. Most of the better ones were sold. Also they did not in the past suffer from not being well kept. I don't know what the situation is now but I lived for about 5 years in a council house in London. There was a wide range of people from different backgrounds and while I was there it got a complete overhaul - new kitchen, double glazing, central heating, security entry phones, the whole lot. I don't know what they are like now as far as upkeep is and I do know they vary and some can be dreadful but it is completely possible to create decent low cost housing for people and unless we are going to start paying everyone the salary's necessary to pay the large rents or afford to buy, we really have no choice. One way or another people need houses and I hope this country will not slip further into the ghetto way.

Mixed housing is always best. People from different kinds of backgrounds in the same area. I remember hearing of a new council house scheme in London where half the tenants owned their homes - bought when built and half were council tenants. Things like that are good. It can be housing associations or the council but they are needed and they can be good to live in. Just needs planning.




As for the tax income... look at it this way.
You have several types of households.. young people (students) that give next to no tax income, singles on the dole that give next to no tax income, working singles that give some income, families that give considerable income and pensioners that give next to no income. Local government will always try to get as many working singles who can afford expensive housing and families that also can.. while trying to get rid of the others. If you look at the local areas with the highest wealths in a country... it aint singles living there or students :)

Nonetheless all are needed and all need somewhere to live. Time we all remembered that. ;)
 

Infinite Chaos

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Loads of good points made, TEC also made the point about how easy it is (relatively) to simply say we should move job opportunities to areas of high unemployment. I can't see this working unless a company is growing and chooses to exploit a pool of labour in such a region.

I personally think one big reason for the coalition to be exploring this is that they've given in to the hard right (and widespread public) demand for a cap on immigration. The US not only has strong worker mobility (same language and currency spoken across the land mass) but they also welcome and integrate legal migrants willingly.

We're giving in to those that demand "British jobs for British workers" and caps on migrant labour means that industry will have to attract labour or the govt will have to enable labour movement. There was a discussion on pensions and the growing age of the population - without the migrant labour that contributes taxes into the retirement, health, unemployment and disability budgets we'd have a poor ratio of workers to retired in this country. As it is, with migrant workers we're just about paying our way.
 

Andalublue

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If there is no coercion, just incentive, then this isn't a heinous plan. But it is only half the story, a purely supply-side solution. Demand needs to be generated too, as per TEC's observation. The government must apply pressure on business to stop development in the South East. No incentives and concrete disincentives for centralising operations in London and the Home Counties where there is insufficient housing for those already living there and hence house-cost inflation damaging the economy. The government's plan will have a negative impact if all they are doing is encouraging people from the Midlands, North and West to relocate to the South and East because those are the only regions with available work. The LibDems have been talking about forcing immigrants to live in the regions as well as the SE. If you do that, force the current non-immigrant unemplyed to chase down to London and do nothing about developing regional employment, you will have a chaotic, dislocated and over-crowded South East and multi-racial, impoverished and dislocated regions.

As a single plank of an overall employment strategy the suggestion has legs, as THE strategy it would be disastrous.
 
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