The next stage of welfare reform: work more hours or lose your benefits

Ministers consider plans to force workers to increase their hours or change jobs in return for receiving Universal Credit payments.

Rarely a day now passes without ministers looking to impose new conditions on welfare claimants. The latest proposal under consideration, as today's Guardian reports, is for low-paid workers to be forced to work more hours or face losing their benefits.

Ahead of the national launch of Universal Credit in October, a DWP document notes that "the current Jobseekers Allowance caseload will be joined by current claimants of tax credits/housing benefit who are working less than could reasonably be expected." It adds: "The Welfare Reform Act enables us to place a wide range of mandatory requirements on this group (e.g. work search, work availability and work preparation requirements). Any requirement must be intended to help them find work, more work or better paid work." 

Universal Credit claimants will be divided into six groups (see below): working enough (individual and household), working could do more, not working, too sick to work right now, too committed to work right now and too sick to work. It is the second of these groups that the proposals are concerned with. The DWP suggests that claimants could be required to move job if and where "other avenues (additional job, more work with same employer) have proved unsuccessful". 

Responding to the department's "call for ideas", a new Policy Exchange report recommends that all new in-work claimants should be required to attend an initial interview at a JobCentre "where a conditionality regime should be set up to ensure the individual is doing all they can to increase their hours and earnings". It adds that claimants should then be forced to attend a quarterly meeting "to be reminded of their responsibility to try to increase their earnings", with sanctions applied for failing to attend. 

Ministers will no doubt argue that the plans are aimed at assisting the 1.4m people who are working part-time because they could not find a full-time job. The Policy Exchange report found that only 30 per cent of part-time workers who expressed a desire for full-time work were actively looking for it. Ministers will merely help push claimants in the right direction. But given the routine abuse of existing benefit sanctions by job centres, the danger is that this will become an underhand means of reducing the welfare bill.

And, rather like the suggestion that the minimum wage could be frozen or cut, the proposals sit uneasily with some of ministers' recent rhetoric. At last week's Resolution Foundation event on low pay, the skills minister Matthew Hancock (George Osborne's former chief of staff) argued that people were wrong to suggest that "working longer hours is the best way to boost earnings, and that getting people to work longer hours will help solve our economic problems." He observed: "Now I love my job, and work a humungous number of hours. And while many people in this room might do the same, let me let you into a secret: we’re unusual.

"Working more hours may be a necessary thing, but it’s not necessarily a good thing. It means less time to see the family; less time in the garden. Less free time. I’m in favour of more freedom. If the cardinal sin of modern economics is assuming that markets are always rational, then the second great failing is forgetting who we’re in it for."

If ministers are to avoid alienating the very "strivers" they purport to support, they should heed Hancock's words. 

The Department for Work and Pensions suggested that claimants could be required to seek "more work or better paid work" in return for receiving in-work benefits. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Even before Brexit, immigrants are shunning the UK

The 49,000 fall in net migration will come at a cost.

Article 50 may not have been triggered yet but immigrants are already shunning the UK. The number of newcomers fell by 23,000 to 596,000 in the year to last September, with a sharp drop in migrants from the EU8 states (such as Poland and the Czech Republic). Some current residents are trying their luck elsewhere: emigration rose by 26,000 to 323,000. Consequently, net migration has fallen by 49,000 to 273,000, far above the government's target of "tens of thousands" but the lowest level since June 2014.

The causes of the UK's reduced attractiveness are not hard to discern. The pound’s depreciation (which makes British wages less competitive), the spectre of Brexit and a rise in hate crimes and xenophobia are likely to be the main deterrents (though numbers from Romania and Bulgaria remain healthy). Ministers have publicly welcomed the figures but many privately acknowledge that they come at a price. The OBR recently forecast that lower migration would cost £6bn a year by 2020-21. As well as reflecting weaker growth, reduced immigration is likely to reinforce it. Migrants pay far more in tax than they claim in benefits, with a net contribution of £7bn a year. An OBR study found that with zero net migration, public sector debt would rise to 145 per cent of GDP by 2062-63, while with high net migration it would fall to 73 per cent.

Earlier this week, David Davis revealed the government's economic anxieties when he told a press conference in Estonia: "In the hospitality sector, hotels and restaurants, in the social care sector, working in agriculture, it will take time. It will be years and years before we get British citizens to do those jobs. Don’t expect just because we’re changing who makes the decision on the policy, the door will suddenly shut - it won’t."

But Theresa May, whose efforts to meet the net migration target as Home Secretary were obstructed by the Treasury, is determined to achieve a lasting reduction in immigration. George Osborne, her erstwhile adversary, recently remarked: "The government has chosen – and I respect this decision – not to make the economy the priority." But in her subsequent interview with the New Statesman, May argued: "It is possible to achieve an outcome which is both a good result for the economy and is a good result for people who want us to control immigration – to be able to set our own rules on the immigration of people coming from the European Union. It is perfectly possible to find an arrangement and a partnership with the EU which does that."

Much depends on how "good" is defined. The British economy is resilient enough to endure a small reduction in immigration but a dramatic fall would severely affect growth. Not since 1997 has "net migration" been in the "tens of thousands". As Davis acknowledged, the UK has since become dependent on high immigration. Both the government and voters may only miss migrants when they're gone.

George Eaton is political editor of the New Statesman.