PRESS RELEASE

Embargoed until 00.01

Friday, 20 May 2011

Policy Exchange calls for thirty-five hour working week for job seekers and return to contributory welfare system

New polling shows voters support radical new direction for the welfare state

Conditions on benefit claimants should be increased so that they have to spend more time each week looking for a job, says a new report from leading think tank Policy Exchange. The study recommends that current work search requirements should be expanded to make sure that claimants can stay in – or get into – the habits of a normal working lifestyle. According to research from the Department for Work and Pensions, the average jobseeker currently spends just one hour a day looking for work.

The report – No rights without responsibility: rebalancing the welfare state – also proposes ways to start reintroducing the contributory principle into the benefit system. This would mean those who have paid in National Insurance Contributions for longer would get treated more generously than those who have not.

At present, all claimants are able to turn down any job they do not want to do for at least the first three months of making a claim. As a first step towards making national insurance contributions count again, the report suggests that only those who have paid into the system should enjoy this right. The report recommends that the government explores moving towards personal welfare accounts, reflecting the value of people’s previous contributions.

The study also warns that further reforms are needed, beyond the Government’s proposed Universal Credit. It argues that proper reform needs more than just a stress on “making work pay” by allowing those on benefits to keep more money from part-time jobs. Instead, greater emphasis on the responsibility to find a job whenever possible is also needed. Recent government research* found that over a third of benefit claimants felt that there was nothing wrong with choosing to stay on benefits rather than looking for work and that claiming benefits should be an option over having to work.

To back these measures up, the report says there should be harsher sanctions – including the loss of cash benefits – for those who decide they would rather take benefits than take available work.Matt Oakley, head of economics and social policy at Policy Exchange, said: “The welfare state was set up to help those in genuine need. Over the past 65 years that founding principle has been diminished and welfare dependency has grown.

“We now find ourselves in a situation where large numbers of those claiming benefit are doing so not out of necessity but because they believe it’s a fundamental right to take from the state. Spending just seven hours a week looking for work – less time than the average person spends at work each day – is not enough. There are limits on Government’s ability to coax people into work with higher tax credits or welfare payments. With nearly 5.5 million adults now living in households where no-one is in work, the government needs to put in place much stricter conditions so that life on benefits is not an option.”

He added: “Many people are shocked that having paid into the system for years they are no better off than people who have not. Over time we need to reintroduce the contributory principle into the benefit system, and there is strong public support for this. As a first step the Government should make the twelve week window in which claimants can turn down jobs they do not want to do conditional on having paid into the system. “The benefits system must recognise those people who have worked and paid their taxes all their lives and have fallen on hard times. The Government should widen their consultation on National Insurance Contributions and income tax to investigate whether the creation of a personal welfare account, funded from NICs could replace contributory Job Seekers Allowance and sit above Universal Credit.”

New MORI polling commissioned by Policy Exchange finds that voters endorse these principles.

51% of voters believe people should not be able to get welfare at all, unless they have paid into the system through national insurance and taxes.

69% believe that jobseekers should lose their benefits if they turn down job offers – even if the job pays the same or less than their benefits.

77% think longer term claimants should have to do community work in return for their benefits – as in “workfare” schemes in other countries.

ends

To download a full copy of the report please click HERE