• Crackdown on £190bn-a-year welfare bill
• Payments could be suspended for three months
|Iain Duncan Smith|
Toby Helm and Anushka Asthana
The unemployed will be ordered to do periods of compulsory full-time work in the community or be stripped of their benefits under controversial American-style plans to slash the number of people without jobs.
The proposals, in a white paper on welfare reform to be unveiled this week, are part of a radical government agenda aimed at cutting the £190bn-a-year welfare bill and breaking what the coalition now calls the “habit of worklessness”.
The measures will be announced to parliament by the work and pensions secretary, Iain Duncan Smith, as part of what he will describe as a new “contract” with the 1.4 million people on jobseekers’ allowance. The government’s side of the bargain will be the promise of a new “universal credit”, to replace all existing benefits, that will ensure it always pays to work rather than stay on welfare.
In return, where advisers believe a jobseeker would benefit from experiencing the “habits and routines” of working life, an unemployed person will be told to take up “mandatory work activity” of at least 30 hours a week for a four-week period. If they refuse or fail to complete the programme their jobseeker’s allowance payments, currently £50.95 a week for those under 25 and £64.30 for those over 25, could be stopped for at least three months.
The Department for Work and Pensions plans to contract private providers to organise the placements with charities, voluntary organisations and companies. An insider close to the discussions said: “We know there are still some jobseekers who need an extra push to get them into the mindset of being in the working environment and an opportunity to experience that environment.
“This is all about getting them back into a working routine which, in turn, makes them a much more appealing prospect for an employer looking to fill a vacancy, and more confident when they enter the workplace. The goal is to break into the habit of worklessness.”
Sanctions – including removal of benefit – currently exist if people refuse to go on training courses or fail to turn up to job interviews, but they are rarely used.
The plans stop short of systems used in the US since the 1990s under which benefits can be “time limited”, meaning all payments end after a defined period. But they draw heavily on American attempts to change public attitudes to welfare and to change the perception that welfare is an option for life.