Lawrence Kay

Turning welfare into work

Contrary to what you might think, it is actually quite hard to find someone on benefits who doesn’t want to work. When you ask a claimant whether they would like to, they will invariably say “Yes, I want a job.” At first, this seems like a strange answer: why do we have nearly 6 million people on benefits when so many of them want to work? The answer is simple when you ask a few more questions: they don’t want just any job. They envisage doing what they used to do or would like to try – but aren’t willing to look for anything else.

Getting them to try any job in order to be in employment is the key issue for any party that wants to cut the welfare rolls. But this is really difficult for one reason in particular: the financial incentives to work are really low for anyone on benefits who can only hope for a job that pays the minimum wage. Places like Neath, where 27 percent of people are out of work, have suffered from the problem for years. Like anywhere else, it needs firms to come and soak up its pool of unemployment. But if the firms can’t attract skilled workers, and anybody who might retrain knows that they won’t be much better off in work than on welfare, why would they come?

A Policy Exchange report out today shows why incentives to work are so important to the size of Britain’s welfare rolls and the social problems faced in many areas. By comparing the income of typical benefit claimants to what they would get were they in work (and taking into account the costs of work like travel and office clothing), the report reveals how, for example, two people claiming Jobseeker’s Allowance will only be £29.06

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