Labour’s New Deal will be hard graft

For Franklin Roosevelt it was a 100-day assault on poverty and an attempt to get the US out of severe depression in the Thirties.

For Tony Blair the “New Deal” is about meeting one of the five basic pledges that Labour promised to meet in return for people’s vote last May – it is about winning a second term.

He has promised to move 250,000 young people off welfare and into work – even though officially there are only 120,000 people between 18 and 24-years-old registered – and is adopting Roosevelt’s radical slogan to spearhead it.

The Welfare to Work programme, of which New Deal is one part, is a flagship policy for the Government. And the Department for Education & Employment (DfEE) has now hired St Luke’s to handle the 11m advertising account to explain to business, and the wider public, how New Deal will work and why it will work better than previous schemes designed to cut dole queues.

It is going to have a tough time. The scheme has already been dubbed “workfare”, after the US scheme which forced unemployed people to work for their benefit. Some people have accused Labour of merely introducing a dressed-up Conservative Party policy. And even some of its own MPs are sceptical. The Secretary of State for Social Security Harriet Harman is already facing a wave of hostility over plans to cut benefits for lone parents – another target of Welfare to Work.

John McAllion, the Labour MP for Dundee East, is worried that people will suffer if they lose income when existing entitlements for housing benefit and council tax are cut.

“We keep being told that this will be different but if it is not actually creating any new jobs, it will be just another training scheme. It needs to be more flexible, it simply won’t work in areas like Dundee where there are extreme labour shortages,” says McAllion.

More than 3.5bn, raised from the windfall tax on privatised utilities in July, will be invested in the New Deal programme over the next four years. Last month, employment minister Andrew Smith published a statement of intent – the New Deal Design – based on the manifesto pledge to get 250,000 young unemployed people off welfare.

The public in general and the unemployed in particular are cynical about back-to-work schemes, such as the Youth Training Scheme and Youth Opportunities Programme launched in the Eighties. These were condemned for not providing long-term employment, and viewed as a short-term solution to distort embarrassing statistics.

“The aim is to create the sense of a national crusade and to engage employers and young people in the New Deal,” says Helena Rafalowska, the head of communications and marketing for New Deal. “It is a huge challenge.”

Rafalowska, who has worked on a number of high-profile government campaigns, was appointed in August.

St Luke’s will be responsible for the campaign strategy, focusing on TV and national press. But the small in-house marketing team, headed by Rafalowska, will control the campaign centrally.

It has emerged that the Labour Party veteran pollster and adviser Philip Gould will work with the DfEE team in what is described as an “unofficial” advisory role. But nobody could say what Gould, who has also worked with the Democratic Party in the US, will be responsible for.

Rafalowska was a key figure in the pitch. The Central Office of Information asked four agencies: Duckworth Finn Grubb Waters, DMB&B, St Luke’s and TBWA Simons Palmer to pitch for the account. All four presented to a panel of a dozen officials, including representatives from the COI, on October 27. DMB&B and St Luke’s were shortlisted for the second round, and presented to senior Cabinet ministers from the departments involved, including Smith and the man who controls the money, paymaster general Geoffrey Robinson.

Chancellor Gordon Brown and minister without portfolio Peter Mandelson, a member of the Welfare to Work committee, oversaw the final stage. St Luke’s refuses to give a detailed breakdown of its strategy for the campaign, which is scheduled for early next year. But deputy managing director David Abrahams says a strong call to action to employers will be a central tenet.

“This is an opportunity to create a new language for Government initiatives,” says Abrahams. “Old-style campaigns concentrated on what the Government is doing for you rather than you doing it yourself.”

But as the unemployed will be compelled to take part, the call to action is difficult to understand. Claimants between the age of 18 and 24 will lose benefit payments after April unless they choose one of the four options available under New Deal – a job with training; a place in further education; work on an environment project; or voluntary work with training.

But job vacancies are not distributed evenly and young people in areas of high unemployment will be forced to take one of the other options. But the true benefit of the other options remains to be seen.

Employers will be given 60 a week for six months and a lump sum 750 training allowance. They do not have to offer a full-time job at the end of the six months if they show that the training has improved “employability”.

A list of 500 businesses will be targeted with a direct marketing campaign.

The main burst of advertising will back the launch of the New Deal and promote the initial target of getting 250,000 young people off the dole – as stated earlier 130,000 more than are actually registered as unemployed at the moment. The true test of New Deal will come in the next phase, expected to become operational next October, which includes schemes for older long-term unemployed people and lone parents.

St Luke’s has been handed the challenge of advertising a scheme which is a cornerstone of Labour policy. A huge sum of money is being spent on the New Deal. But as McAllion says: “This is the main policy for the Labour Government and if it doesn’t work it could be a mortal blow.”

That is how important it is to Labour and St Luke’s.