Letter: A benefit for the employer, but not for the jobless

Sir: If only Matthew Symonds were right that the Government could cut unemployment by a half by adopting Dennis Snower's plan for a full-blown Benefit Transfer Programme ('How to start a revolution in the job's market', July 13).

Tempting though it might be to embrace this as our new panacea, one really must urge caution. The fact of the matter is that, for most employers, the Benefit Transfer Programme can be reduced to one simple word - 'bribes'. Often, employers' response to the idea is not 'Oh good, extra money if we recruit the long-term unemployed', but 'what is wrong with them to make the government pay us extra if we offer them a job?'

Indeed, when Full Employment UK has discussed the idea with employers, we have found that the higher the proposed 'bribe' the greater their suspicion. Our consultations, both among long-term unemployed people as well as employers, suggest that subsidies to individuals are likely to be more effective than subsidies to employers. That is why we would tend to favour the extension of Family Credit to all unemployed adults, linked to a simpler system for calculating entitlement, so that the unemployed are better able to assess the impact of the credit on their in-work income.

Even then, we should beware over-claiming for what this might achieve, since a lot would depend on the vigour with which it was marketed, and the level at which the credit was pitched ( pounds 50 a week, for example, would have a much greater impact than the current level of pounds 44.30).

If Professor Snower were to test out this idea with the unemployed, as well as his own favoured scheme, he might well find that they would be more motivated by the prospect of extra money in their pockets, rather than simply handing it over to the employers.

Yours sincerely,

PETER ASHBY

Full Employment UK

London, N16

13 July