Fraser Nelson Fraser Nelson

What do Jeremy Hunt’s welfare reforms add up to?

(Credit: Getty images)

In his Budget speech, Jeremy Hunt made a great play on how Conservatives value work. Tories love talking about this but in fact they have just presided over a catastrophic increase in benefits. Before the pandemic there were 4.2 million on benefits: at the last count, 5.2 million. Given the mass worker shortage, this is quite a scandal. So what is being done to change this?

Hunt referred to tighter conditions in welfare conditionality, but the OBR don’t seem to think it will move the dial, with just 10,000 moving back to work. It does think the £20 billion package on childcare will help, broken down as follows:

  • 60,000 more in (part time, 16h/week) work from more childcare subsidies for the under-twos
  • 15,000 more in (part time, 16/week) work from more childcare for parents on benefits 
  • 15,000 more in work from tighter welfare conditionality for parents and carers
  • 10,000 more in work from tighter disability allowance 

Add to the above the 10,000 from general welfare reform, you get 110,000 in total. But that’s not where Sunak is going to get most of his new workers from. The OBR says that we’ll end up importing far more workers than we’ll recruiting from the tanks of the unemployed with 160,000 more (!) than it was expecting just four months ago. It stresses these are extrapolations, not forecasts. But on the post-Brexit immigration evidence so far, it says, we can expect a lot of new arrivals – but no more likely to contribute to the economy than those already in the country. At present, immigrants make up about 19 per cent of all UK workers: this ratio may steadily increase.

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