From the TUC

Today’s daft idea: turning benefits for unemployed people into loans

26 Nov 2012, by in Society & Welfare

Tory MP Chris Skidmore is calling (in the Telegraph, of course) for young unemployed people’s Jobseeker’s Allowance to be turned into ‘repayable loans’. I’m on leave today, but I can’t not comment on this sublime combination of stupidity and spite.

Mr Skidmore calculates that unemployed people could have to repay debts of up to £20,475 when they eventually got work. He thinks this would be “an additional incentive to take on paid work.” How knowing that you will have a huge debt that has to be paid back as soon as you get a job will make anyone more likely to take a job is beyond me. 

Presumably Mr Skidmore supports the Universal Credit (he did vote for it); one of the key arguments the government has used to support this reform is that it will increase the amount people will be better off if they get a job but this proposal would utterly undermine that strategy.

Mr Skidmore has got the motivation of unemployed people wrong. The reason unemployed people are taking longer to get jobs is that there are fewer jobs to apply for: there are more than 5 unemployed people for every vacancy, twice the rate before the recession.  As I’ve noted before, the evidence about the unhappiness of unemployed people suggests they already have plenty of incentive to work and research shows that people who cycle between unemployment and low paid work retain a strong commitment to work. We don’t have 2.5 million unemployed people because 800,000 people have less “incentive to take on paid work” than they had four years ago.

The government is developing a nasty habit of dividing the country, looking for ways to turn the rest of the country against people on benefits. Mr Skidmore is fully signed up to this approach, justifying his proposal on the grounds that unemployed young people aren’t suffering enough, because a £20,000 debt is “considerably less than the tuition fees loan, repayable by many of his or her peers.”

Young unemployed people (who may also have student debts) aren’t responsible for the increase in student debts. Mr Skidmore is: according to They Work For You, he “voted very strongly for university fees.” His proposal appeared in the Telegraph on the same day as Jospeh Rowntree Foundation published its annual Monitoring Poverty and Social Exclusion report, confirming that  “the value of benefits for working-age adults has not increased above inflation since the 1970s.” Jobseeker’s Allowance for a single young person is currently £56.25 a week – £2,925 a year. (In 2011/12, Mr Skidmore received more than £32,000 in expenses, in addition to his salary.)

The odd loopy notion shouldn’t be much to rant about but unfortunately it can’t be ignored. The Autumn Statement is due on the 5th, and the Chancellor has given us plenty of warning that an assault on benefits will be the centre-piece. I have a very queasy feeling about the first week in December.

 

 

One Response to Today’s daft idea: turning benefits for unemployed people into loans

  1. John
    Nov 27th 2012, 1:16 am

    ”How knowing that you will have a huge debt that has to be paid back as soon as you get a job will make anyone more likely to take a job is beyond me´´

    Thankyou for most concerning article. Is there any other country in Europe or indeed the former Commonwealth that uses this form of pressure, or should I say blackmail, on you to get a job, especially when the jobs are not there?

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