New attack by Chancellor on unemployed people

Newly unemployed people will be forced to wait seven days, instead of three days currently, before being able to claim benefits. The announcement was made by the Chancellor of the Exchequer as part of a statement on public spending plans for 2015-16. He said the move was designed to be 'helpful' to unemployed people, who would otherwise be distracted by the need to look for a new job.

 

Key points

  • The longer waiting time for people claiming unemployment benefits (which will be carried over into the new universal credit) will save an estimated £245 million in 2015-16, out of a total cuts package of £11.5 billion.
  • Around half of all people claiming jobseeker’s allowance (or later, universal credit) will be required to sign on at their jobcentre each week instead of fortnightly. And all claimants will be required to prepare for work and search for jobs from the start of their claim. These measures will save an estimated £95 million in 2015-16, on the assumption they will lead to people spending less time on benefits.
  • People who refuse an order by Jobcentre Plus to attend English language schools will face having their benefits cut.
  • Lone parents who are not working will be required to prepare for work once the youngest child turns three.
  • The formula for annual social rent increases from 2015-16 onwards will be changed to CPI + 1 percentage point, instead of RPI + 0.5 percentage points. This will save an estimated £115 million in 2015-16, rising to £405 million in 2017-18.
  • A new overall cap on benefits spending by government was also confirmed by the Chancellor, to be set in cash terms every four years from April 2015. The area of spending subject to the cap will exclude state pensions and jobseeker's allowance.

Alongside the statement, the coalition government published a distributional analysis of all fiscal measures since it came to office in 2010. This shows that, on average, each household has incurred a cumulative loss equivalent to £880 a year as a result of the measures (at 2010-11 prices). Those people in the highest quintile of incomes have lost the most – 4 per cent of income, or £2,160 a year. But those in the lowest quintile have lost almost as much – 3.9 per cent of income, or £930 a year.

SourceSpending Round 2013, Cm 8639, HM Treasury, TSO | Impact on Households: Distributional Analysis to Accompany Spending Round 2013, HM Treasury
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Publication date: 
Jun 26 2013