Business chiefs urge Labour to end UK's worklessness crisis

Young people who refuse to take a job will have their benefits cut, Labour said yesterday - despite previous pledges to halt ‘cruel Tory sanctions’ on the unemployed.

Work and pensions secretary Liz Kendall said that claimants had a ‘responsibility’ to take a job or engage with training programmes in return for their benefits.

Ms Kendall, who will unveil Labour’s ‘radical’ plans for welfare reform tomorrow told Sky News: ‘If people repeatedly refuse to take up the training or work responsibilities, there will be sanctions on their benefits.‘

The reason why we believe this so strongly is that we believe in our responsibility to provide those opportunities, which is what we will do.’

She acknowledged there are people who ‘could work but aren’t’, but said they were ‘in the minority’.

The move is a significant shift for Labour, which savaged the last Tory government for being too quick to cut the benefits of the unemployed - and blamed the sanctions regime for driving an increase in reliance on food banks.

During his 2020 campaign to succeed Jeremy Corbyn as Labour leader, Sir Keir Starmer pledged he would ‘end the Tories’ cruel sanctions regime’.

But writing in the Mail on Sunday yesterday, the Prime Minister acknowledged that tough measures were needed to prevent Britain’s bloated benefits budget spiralling out of control.

The PM said he would ‘never call people shirkers or go down the road of division’. 

But he added: ‘We will crack down hard on anyone who tries to game the system’.

Under the previous government, welfare eligibility would have been tightened so around 400,000 more people signed off long-term would be assessed as needing to prepare for work by 2028/29 to deliver the savings.

Ms Kendall declined to say whether she would stick to the Tory proposals, but said Labour was committed to tackling long term sickness and curbing the benefits bill.

Sir Keir pledged to ‘grip this problem once and for all’ and fix a welfare system that is ‘failing people’.

Ms Kendall confirmed plans for a major shake-up of the Jobcentre system, amid concerns that many employers have given up on them. So-called ‘work coaches’ could also be placed in mental health clinics to help people focus on what work they could do with support.

The moves follow predictions that the benefits bill will soar unless urgent reforms are made to get people back to work.

Officials forecast that more than four millions people will be claiming long-term sickness benefits by 2030 - 60 per cent higher than before the pandemic.

Much of the increase is due to a surge in people reporting mental health conditions.

Ms Kendall said the reasons for the increased number of claims are ‘complex’ and that Britain is ‘an older and also sicker nation’.

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Ms Kendall said there was a ‘genuine problem’ with mental illness in the UK, but acknowledged that some people’s problems were ‘self-diagnosed’.

She highlighted figures showing that almost one million people aged under 25 who are not in education, employment or training, partly because of mental health problems, but also because of a lack of ‘basic skills’.

Tomorrow’s reforms are expected to include plans for a new ‘youth guarantee’ which will offer young people help with training and skills in return for a commitment to look for work.

A new report by the Centre for Social Justice found that more than half of those young people currently not working are not required to seek a job because of illness.

James Heywood, head of debt and inclusion at the think tank, said: ‘The Government must commit to tackling economic inactivity, especially among young people. 

'Without supporting people back into the labour market, its ambitious employment targets are simply unachievable.

'The rising tide of long-term inactivity will cost the country billions of pounds if left unstemmed.’

In a speech today, CBI chief Rain Newton-Smith will say that ending Britain’s worklessness crisis is ‘mission critical not only for growth, but for the wellbeing, the life opportunities of those people’.

But she will warn that hikes in employers’ National Insurance in last month’s Budget ‘just made it harder for firms to take a chance on people’.

Shadow housing secretary Kevin Hollinrake said it was time to stop ‘giving people cash to stay at home when they could work’.

Mr Hollinrake said the Conservatives would support genuine efforts to reform the welfare system, but warned: ‘Labour’s record on this stuff is not good.’

A Conservative Party spokesman said: ‘Labour’s hollow promises on welfare reform will fool no one. When the last Conservative government introduced messages to tackle the growing benefits bill, Labour opposed them every step of the way.‘

At the Budget, instead of following in our footsteps and taking difficult decisions on welfare to fund public services, Rachel Reeves instead reached straight for the tax lever.’