Will the Autumn Statement succeed in getting people back to work?
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Tomorrow the Chancellor, Jeremy Hunt, will give what is likely to be the final Autumn Statement before the next General Election. The Government finds itself in the unenviable position of needing to deliver a plan to both improve the UKs sluggish growth and combat the cost-of-living crisis. Hunt will want to provide the Conservatives with a much-needed boost in the polls - and quell discontent among Tory backbenchers, who are deeply unhappy about the UK’s record-breaking levels of taxation.
What we do know
Whilst there has been much speculation, Hunt has yet to confirm many of the Government’s big-ticket announcements. However,last week the Chancellor and the Work and Pensions Secretary, Mel Stride, unveiled their Back to Work Plan - a set of welfare reforms that will make up a key pillar of the Autumn Statement. Central to these plans is a package of support for disabled people and those with health conditions to support them back in to work, and tougher sanctions for claimants deemed not to be looking for work.
The plan includes some welcome announcements that will help to support some of the 2.6 million workers, that are currently economically inactive due to long-term illness, into employment.
The Chancellor will provide a two-year extension to the Restart Scheme, which gives Universal Credit claimants who have been out of work for nine months additional support to find jobs in their local area. The amount of time a person needs to be out of work before qualifying for the scheme will also be lowered to six months.
The Government also announced it will increase investment in schemes which support people with physical and mental health conditions into work, such as Individual Placement and Support, Universal Support and NHS Talking Therapies.
However, these positive steps will be undermined if we see a further ramping up of punitive benefit sanctions. As part of the Chancellor’s proposals trailed so far, individuals who have open-ended sanctions for more than six months will have their claims closed, meaning they will lose access to legal aid and free NHS prescriptions.
People who have been unemployed for over 12 months could also face having their benefits removed. Claimants may also be required to undertake mandatory work experience or other intensive work search requirements.
The Treasury has also confirmed that people with mobility and mental health problems will be asked to work from home or risk having their benefits cut.
More cuts, less results
Benefit levels in the UK are already comparatively low compared to other advanced economies. On average those who fall out of work find that Universal Credit accounts for just 17% of their previous earnings – the lowest level of support offered by an OECD country.
Welfare claimants are subject to a range of strict criteria to qualify for support. The Chancellor’s new proposals will expose more people to an even tougher set of sanctions. Individuals who had previously been exempt due to health conditions could now be impacted. This represents a dangerous precedent, and is unlikely to achieve the Chancellor’s ambition of getting more people back to work.
The Department for Work and Pensions’ own evidence suggests that sanctions can slow people’s progress back into employment. It can also see people earning less than if they had found a job on their own terms. The threat of increased sanctions could also risk heightening the anxiety of people who are unable to work due to ill health. Claimants will be more likely to take up low-paid insecure work or employment that is unsuitable or doesn’t match their skill set or qualifications.
A better approach for getting people back to work
If the Chancellor is serious about getting people back to work, he should use tomorrow’s Statement to announce investment for tackling the drivers of ill health and programmes to help people with long-term conditions to find a job that is right for them. The Government should use his statement to include additional resources for tailored employment support and more locally grounded employment services capable of connecting with local employers.
The Government should look to deliver on the good work agenda promised in the Conservative 2019 Manifesto by supporting the creation of more flexible jobs, so that people managing health conditions can remain in work. This should be in addition to strengthening Statutory Sick Pay to improve the chances of disabled workers returning to employment.
If the Government is going to support people back to work and relieve acute worker shortages, then they must focus on support and raising the quality of jobs available. However, if their measures only heighten anxiety amongst job seekers then they may well make matters worse.
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