The Daily Telegraph

Benefit cuts warning to part-timers

Kwarteng’s initiative means more than 100,000 workers will be told to do more hours or lose cash

- By Gordon Rayner ASSOCIATE EDITOR

MORE than 100,000 part-time workers will risk having their benefits cut if they do not agree to work longer hours, under plans to be unveiled by Kwasi Kwarteng tomorrow.

Anyone who works fewer than 15 hours per week at the National Living Wage will have to attend coaching sessions at Jobcentres and prove they are trying to increase their earnings, The Daily Telegraph has learnt.

The Chancellor has described it as a “win-win” policy because it would help fill the 1.2million vacancies in the jobs market as well as helping those on low incomes to earn more by giving them intensive support with job seeking.

The changes, to be announced in the so-called mini-budget, will take effect in January and could boost the economy by £29billion.

Mr Kwarteng will also announce support for over-50s to get back to work, as employment rates in that group remain below pre-pandemic levels.

If economic activity among over-50s returns to previous levels, the Government estimates the changes announced tomorrow could increase GDP by one percentage point, or £29billion.

Liz Truss has staked her reputation on boosting economic growth and the benefits policy being unveiled by Mr Kwarteng is one part of the solution, she believes.

The Chancellor said although unemployme­nt is at its lowest rate since the early 1970s, the high number of vacancies is “limiting economic growth”.

Mr Kwarteng said: “We must get Britain working again. These gradual changes focus on getting people back into work and maximising the hours that people take on to help grow the economy and raise living standards for all.

“It’s a win-win. It boosts incomes for families and helps businesses get the domestic workers they need, all while supporting economic growth.”

During the Conservati­ve leadership campaign, Ms Truss said she would fix benefits by “changing the incentives” for people to get back into work.

Under current rules, anyone who works fewer than nine hours per week at the National Living Wage is subject to the DWP intensive work search regime, which means they must attend coaching sessions at Jobcentres, attend job interviews and accept offers of work or risk losing their entitlemen­t to Universal Credit.

Those who work for more than nine hours but still claim Universal Credit fall into the so-called “light touch” regime, meaning they do not have to attend Jobcentres on a regular basis and do not have access to work coaches.

From next week, that threshold will go up to 12 hours, and Mr Kwarteng will announce that from January it will be increased to 15, meaning anyone earning less than £618 a month will be subject to the more intensive regime. The changes will apply in England, Scotland and Wales and affect 120,000 people. As part of the scheme, newly unemployed over-50s will get nine months of targeted sessions with a work coach, and over-50s who have been out of work for a year or more will be given a booster session followed by three months of intensive employment support.

A Treasury spokesman said people who work extra hours will be better off, as their income will be higher than the Universal Credit payments they would otherwise have relied on. It will also save the taxpayer money.

Anyone working full time at the National Living Wage currently earns around £130 per week more than they would be given in Universal Credit.

Chloe Smith, the Work and Pensions Secretary, said the new regime would “remove barriers to progressio­n”.

Newspapers in English

Newspapers from United Kingdom