The most recent official statistics show that 5.4 million adults and 1.9 million
children live in the UK’s 3.9 million workless households. Through the Universal Credit, the coalition is taking a radical approach to tackle this, but it won’t be enough. The
government’s own analysis estimates that it will move 300,000 households into work. But this will leave 3.6 million households behind, dependent on benefits and likely to pass worklessness
onto the next generation.
There are also timing worries. Unemployment and, in particular, youth unemployment are high on the political agenda (new statistics on NEETs will come out next week), but the Universal Credit will not be fully implemented for another seven years. If the significant IT development needed to run the system fails or is delayed, there will be a real risk that the benefit system will escape major reform in this parliament.
In short, to ensure real reductions in worklessness, increased employment, growth in all regions of the UK and an end to poverty, we need to do more now.
Today’s publication from Policy Exchange, No rights without responsibility: rebalancing the welfare state, sets out a new direction for welfare reform. It argues that personal responsibility needs to be at the heart of the welfare system. We propose four main areas for reform.
First, people claiming Jobseekers Allowance must be required to do more in order to claim the benefit. Evidence suggests that jobseekers spend as little as eight minutes a day looking for work. The prospects of low wage work and a full working week might be unattractive; but claimants should spend more full-time hours searching for a job. The current system also allows 12 weeks of “preferred search”, where jobseekers can turn down opportunities that do not match their aspirations. This should be abolished for those who have not paid National Insurance Contributions: claimants should be required to look for work and to accept employment when it is offered, even if it pays no more than their welfare benefit.
Secondly, sanctions that penalise claimants who renege on agreed conditions need to be strengthened, while ensuring that dependents must not suffer. For instance, those who are sanctioned might have their benefits paid through smart cards that limit the sorts of goods that can be bought. There also needs to be an investigation into whether non-financial sanctions might be effective.
Thirdly, a stronger link needs to be created between the National Insurance Contributions and benefits received. We suggest that personal welfare accounts are created. These would be funded from NICs and could replace contributory JSA. They would also sit above Universal Credit to provide a clear link between what people put in and what they get back.
Finally, we argue that the state has a stronger responsibility too. It must ensure that no one is left without support to get back to work. This would require finding better ways of segmenting and fast-tracking claimants to the Work Programme. Doing this would ensure that those who need the most help receive intensive support .
Some of these proposals need more detailed work, which future reports will provide. But others can be introduced now. Not allowing a 12 week search for “preferred work” and requiring more time be spent seeking work are real steps that can be taken now. This may sound tough, but it is how the British believe the welfare state should be run. Polling results included in the report show that 70 per cent of Britons think jobseekers should lose their unemployment benefits if they turn down job offers, even if the job offers no more than a claimant receives in unemployment benefits. This support spreads across all sections of society and across the political spectrum.
The principle is clear: if there are jobs that need doing and there are people on welfare capable of doing them, they should accept this work rather than staying on benefits, regardless of the quality of the experience it may offer them. This is the underlying principle of ‘rights and responsibilities’.
Matt Oakley is Head of Enterprise, Growth and Social Policy at Policy Exchange
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