This is an incredibly worrying statistic. The evidence suggests that worklessness is corrosive and soul-destroying. A child growing up in a workless household will, for obvious reasons, tend to have limited ambitions and opportunity. Obviously, as the economy recovers this number should go down — the recent rise indicates that many of these parents have been laid off in recent months. But even before the credit crunch really kicked in, there were more than 1.8 million children living in workless households.
Welfare reform must aim to make work pay by massively reducing the marginal tax rates that people moving from welfare to work face. But the country also needs policies to stimulate job creation. There are already strong idnications that the Tories will cut corporation tax significantly in their first budget, but they also need in their first term to slash the tax on jobs—employers’ National Insurance contributions. The Tories have already said they will prioritise reversing Labour’s planned increase in this tax and that they will exempt new businesses from having to pay it on their first ten employees, but they need to go further and start really reducing it over the course of the next parliament.
Hat Tip: Left Foot Forward