Value of state benefits falling, says TUC report

Value of benefits compared to earnings just 10 per cent, TUC study finds

The government has come under pressure to increase unemployment benefits after a new study revealed that their value compared to earnings had fallen considerably since 1970.

A report by the Trades Union Congress found that benefit rates now represented just 10 per cent of average earnings compared to 17 per cent during the 1980s.

The TUC said that the current £64.30 Jobseeker's Allowance was one of the lowest out-of-work benefit rates compared to wages in the developed world.

The union organisation is campaigning for an increase in the allowance to £75. The TUC general secretary, Brendan Barber, said: "Losing your job is always a massive blow, but successive governments have failed to increase unemployment benefits in line with earnings. The result is that people losing their jobs today face a bigger loss in their income than in previous recessions.

"Of course the real challenge is to get people back into work again and the Government is doing much, both through stimulating the economy and through initiatives like the Future Jobs Fund.

"Many people are going to spend a long time on benefits, and £64.30 a week is not enough to get through the week. Increasing JSA by as little as £10 a week would make a real difference to millions of families.

"The view that we need low benefits to encourage people into work makes no sense in a recession. The vast majority of the unemployed are desperate for jobs, and need no encouragement."