Labour considers £120 benefit bonus

Labour considers £120 benefit bonus

Jobseekers face losing benefits if they lack basic skills and fail to take up an offer of training, Labour has pledged

Jobseekers face losing benefits if they lack basic skills and fail to take up an offer of training, Labour has pledged

Rachel Reeves said the Labour Party is examining a 120 unemployment benefit bonus for more experienced workers who lose their jobs

First published in National News © by

A £120 unemployment benefit bonus for more experienced workers who lose their jobs is being examined by Labour, shadow work and pensions secretary Rachel Reeves said.

Ms Reeves said the Opposition was "unequivocal" in seeking a return of the contributory principle to welfare - but only if it could be done without extra cost to the taxpayer.

She has asked a think tank to find cost-neutral ways to give those with four or five years of National Insurance contributions more Jobseeker's Allowance than others.

It could be worth around £20 for the first six weeks, she indicated.

As the political battle over benefits continued, she also warned jobless people lacking basic skills in English, maths and IT that they would be stripped of payouts if they refused to go on training courses.

Dismissing Tory claims she was copying their existing plans, she said Labour's policy - that would see around 300,000 people a year forced to sit literacy and numeracy tests within the first six weeks on the dole - was significantly tougher.

In her first major speech in the role since taking over from Liam Byrne in October, she reprised his call - backed by leader Ed Miliband - for a return to a "something for something" culture.

As the party seeks to find ways to respond to an increasingly hostile public opinion towards the cost of benefits, she said she had asked the left-leaning Institute for Public Policy Research (IPPR) to look at detailed options.

"This is unequivocal: we are moving in the direction of restoring the contributory element of our social security system," she told an audience at the IPPR.

"The direction I would like to go in is clear and what I would like to see is if someone has contributed for four or five years for example...they might get a bit more in those first six weeks."

That could be "perhaps in the order of £20", she suggested in reply to a question.

"That is why we have asked the IPPR to have a look at this to see what is affordable because before I make a firm commitment, we need to make sure the sums add up.

"Ed Balls has been very clear that any commitments have to be cross-neutral. We won't be spending any more on day-to-day spending."

Higher payments would be a "big help in cushioning the immediate financial impact of redundancy and give them a better chance of getting back into work and back on their feet sooner", she said in her speech.

"If this can be done in a cost neutral way by extending the period people need to be working and paying national insurance to qualify for contributory JSA it would be a very valuable step forward.

"And it would be a powerful way of restoring that understanding of collective insurance against unemployment that was such an important impulse behind Beveridge's original plan but which today has been all but lost from sight."

Setting out details of the proposed sanctions regime, Ms Reeves said a lack of basic skills meant many got trapped in "a vicious cycle between low-paid work and benefits.

"Our message is: i f you need extra training to help you get a job, then it's our responsibility to make sure the training is there b ut it is your responsibility to do the training you need to get off JobSeeker's Allowance and into work.

"If you don't, then there will be sanctions."

Under the plan, all new claimants of Jobseeker's Allowance would have to sit a basic skills test to measure their literacy, numeracy and IT ability within six weeks of signing on.

Those found to need improvement will be put on a programme of training aimed at getting them up to the standard required for steady employment.

The Tories pointed to plans announced by Chancellor George Osborne to pilot a scheme requiring young claimants without the equivalent of a good GCSE in English and maths to undergo training.

Under the plans from day one of a claim, those without level 2 qualifications in English and maths will be required to do up to 16 hours per week of training alongside their job search or risk losing their benefits.

A Conservative spokesman said: "Labour are copying a Conservative policy that already exists and that is superior to the one they are proposing.

"After 13 years of Labour running our education system, many young people looking for work do not have the English and maths skills they need to get a job."

Ms Reeves said: "This is for everybody, not just 18 to 21-year-olds - more than half of people claiming JSA are over 35 - and it's not a pilot, it would roll out nationally straight away."

Under Tory plans basic skills training would only be mandatory three years after people started a claim, she said, wasting valuable time when they could be learning them.

IPPR research director Graeme Cooke: "As part of IPPR's Condition of Britain programme, we are exploring how to marry social investment and the contributory principle to re-engineering of social policy and re-orientating public spending.

"One option is to expand the role of income-contingent loans, in providing much more substantial support to those who have contributed into the system if and when they face a drop in income due to job loss, on a temporary and repayable basis.

"Our proposal for national salary insurance is one variant on this idea.

"Another is to provide a higher rate of short-term benefit for those who lose their job after having paid into the system, funded by increasing the number of years of contribution required before this entitlement kicks in.

"This could be modelled on statutory maternity pay, which pays a much higher rate for the first six weeks - and is only available to those women who worked before having a child."

Work and Pensions Secretary Iain Duncan Smith said: "Labour left our welfare system in a complete mess, with 1.4 million people spending most of the last decade on out-of-work benefits.

"That's why, as part of David Cameron's long-term economic plan, we are fixing the welfare system, ending the something-for-nothing culture and making sure work pays.

"But Labour have opposed every single one of our changes, including capping benefits so no one can claim more than the average working family earns, capping housing benefit, and limiting benefit rises so they do not go up faster than workers' wages. And now they are proposing borrowing more to spend more on benefits.

"This is typical of Labour - they haven't changed - it's the same old welfare party."

The chief executive of Child Poverty Action Group, Alison Garnham, said: "Rachel Reeves is spot on in saying that you can't have a strong economy unless you have a system of social security that helps people into work, makes work pay and recognises contribution. Child poverty costs £29 billion every year, hitting families, the taxpayer and the wider economy.

"We should not forget that the vast majority of people receiving benefits have worked, are working or soon will work again."

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