The government budget cuts and the expected associated job losses particularly in the public sector, will put pressure on the social welfare budget due to the increased payments in unemployment benefits. This makes the recent announcement by Ian Duncan Smith of his proposed radical reform of the benefits system in the government white paper – Universal Credit: Welfare that Works – even more important.
This is another measure introduced under the umbrella of fairness. Put another way, the current system must seem unfair to ordinary working people on low to moderate incomes obliged to pay what appear to be high taxes to support certain people who, it is commonly believed, could work but choose not to. In Britain today some 7.2 million adults and children live in homes entirely reliant on benefit, according to the Office of National Statistics. In parallel the total welfare budget has increased by almost 40% since 1996 to £87 billion in 2009/10. Over the same period, some 4 million jobs have been created but 70% went to immigrants with unemployed British people either not able/qualified or not willing to do such jobs.
In essence the government is proposing a Universal Credit System which will bring together the existing work-related and out-of-work benefits into one payment by 2013/14. Disability living allowance and child benefit will not be affected by these measures. The aim is to ensure that people will always be better off working and better off for every hour worked, the latter particularly important in the case of part-time workers. It is also intended to reduce fraud and make claiming/paying out simpler & fairer, whilst applying sanctions where necessary to encourage the less responsive unemployed back into work (excluding of course the really vulnerable with disabilities, mental illnesses and other issues severely limiting their activities).
There will of course be problems, first of all from the current lack of opportunities in the job market. There will also be difficulties experienced by people trying to fairly administer the new system. By what criteria for example will a job offer be judged reasonable in the case of a claimant refusing to take it up? What evidence will be required to demonstrate a continuous and serious search for employment? The current economic downturn is also severely restricting the ability of job seekers to move to where employment prospects are better, when they find their homes are worth less than the mortgage (even in the United States where the job market has been traditionally more flexible due to the mobility of the American worker). It will be easier to log actual attendance at mandatory courses and serious application to the retraining opportunity presented. However, an efficient and countywide IT system would appear essential to back up all this effort and keep track of all the individual cases and any changes of location aimed at trying to circumvent the system.
There is talk of the development of a pernicious welfare culture which, together with the disappearance of the jobs associated with the old industrial base in the UK, has eroded the traditional working class family pride in gainful employment and increased the reliance on state benefits. Instead, many people seem to have no shame in claiming unemployment benefit whilst avoiding work or alternatively working in the black-economy whilst still claiming benefits. Such an attempt to reform the current unemployment benefit system which now supports nearly 2 million children growing up in workless households and at the same time detrimental to their general social mobility (see Categories/Chairman?s Blog/Social Mobility in the right hand index column), can only be welcomed.
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