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The return of benefit sanctions is a risky, painful and dangerous bet by the government

Against a potential backdrop of mass layoffs, the cruelty of the old system is going to feel a lot sharper. 

By Stephen Bush

Benefit sanctions will return to the United Kingdom from 1 July, the government has confirmed. The requirement that people claiming Universal Credit demonstrate they are actively seeking work was suspended during the lockdown, but will resume on Wednesday, when Job Centres reopen and in-person meetings there return.

The academic evidence on sanctions is that they don’t work, which led the work and pensions select committee, then-chaired by Frank Field, to declare them “pointlessly cruel” in 2018. The counter-argument in government circles is that the story of the last decade has been record employment growth – and that without the changes to unemployment and in-work benefits, including sanctions, that job growth wouldn’t have happened.

Are they right? Well, we don’t know enough about what caused the United Kingdom’s strong jobs growth to be certain, though I personally am highly sceptical. The reality is that the disincentives to live on unemployment benefits – chief among them that for most people who become unemployed, Jobseeker’s Allowance does not remotely replace their lost income, and it provides a meagre existence even for a single person without dependents – are incredibly high without sanctions. The social incentives of work – meeting people, being able to afford a better quality of life, etc. – are already incredibly high. Small wonder that most of those who end up being sanctioned have chaotic lives, either because of mental or physical disabilities or other problems.

I’m not convinced that the existence of a sanctions regime that most jobseekers do not come into close contact with explains the United Kingdom’s strong job growth over the last decade. However, I accept I cannot – yet – demonstrate this either way. But let’s park that aspect of the debate: whether due to the consequences of those changes or merely coincidentally, Universal Credit has never had to manage a period of high unemployment before. It has mostly passed its first test, with people being able to claim fairly quickly, though the system’s complexity has caused some people some difficulties.

The reality is that the partial easing of lockdown taking place in England may not trigger a resumption of normal economic activities. The government is still encouraging people to work from home if they are able to do so. I think this is the correct call: while all the data suggests that the number of new cases of the novel coronavirus continue to fall, there are still a large number of active cases. But the reality is that while large chunks of the country are working from home, town and city centres will continue to struggle, shops and bars will shut, and as a result, work will be scarce. (Look at it this way: you might go to your local with your friends at a weekend, but that drink with colleagues at the end of the day? Not happening.)

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The backdrop to the next couple of weeks and months is likely to be closures and redundancies. Added to that, access to childcare also remains fraught and difficult for most people, as grandparents, who provide most of the slack, still cannot fill in on that front. It seems like a dangerous time to start returning to the welfare policy of the 2010s, a period categorised by near-full employment. The costs of the punitive aspects of that regime were high: the costs of a return to that approach in an era of high unemployment may be higher still.

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