Chancellor Kwasi Kwarteng is expected to announce a welfare shake-up to ‘get Britain working again’.
Image source, Getty ImagesThousands more part time workers could have their benefits reduced if they do not take “active steps” to work more, under a planned welfare reform.
Chancellor Kwasi Kwarteng is expected to announce a shake-up of the benefits system to “get Britain working again”.
Part of the plan targets Universal Credit claimants working up to 15 hours a week at the National Living Wage.
Labour’s Jonathan Ashworth said the country needed a serious plan to support people to return to work.
Mr Kwarteng will set out new prime minister Liz Truss’ plans to tackle the cost-of-living crisis in a mini-budget on Friday.
Currently, Universal Credit claimants working up to 12 hours a week at the National Living Wage risk having their benefits reduced if they do not take steps to increase their earnings and meet regularly with a work coach.
Under the Chancellor’s reform, this requirement will now be extended to people on Universal Credit working up to 15 hours a week at the National Living Wage.
It is understood that this change, expected to come in from January 2023 will affect about 120,000 more benefit claimants.
The Treasury said certain groups will remain exempt from sanctions, including people who are unable to work due to long-term sickness or a disability.
Shadow work and pensions secretary, Mr Ashworth, tweeted: “So Tory ministers think [the] reason we have over a million vacancies is because the low paid aren’t working hard enough and need to be threatened with sanctions but bankers needs bumper bonuses. We need a serious plan to support people to return to work & increase labour supply.”
The Treasury said rising economic inactivity in the over-50s was ”contributing to shortages in the jobs market, driving up inflation and limiting growth”.
It said returning to pre-pandemic activity rates in the over-50s could ”boost the level of GDP by up to 1 percentage point.”
Chancellor Mr Kwarteng said: “While unemployment is at is at its lowest rate for nearly fifty years, the high number of vacancies that still exist and inactivity in the labour market is limiting economic growth.”
He added: “These gradual changes focus on getting people back into work and maximising the hours people take on to help grow the economy and raise living standards for all.”