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The Benefits System - punishing the unemployed and low paid
27/10/2015

There is a lot in the Press at the moment about the proposed changes to Working Tax Credits and other proposed cuts to benefits – so I thought I would add to the debate with some observations of my own.

A major issue which has been largely ignored by the Press (but not, I am happy to say, by the Labour Party in their recent conference) is the impact of cuts to Working Tax Credits on the self-employed. The Government justifies its cuts in Working Tax Credits by saying it will be offset by rises in the living wage – however, self-employed people, certainly in the early stages of their business, are not in a position to give themselves pay rises. Many of my clients starting out in their new businesses can only survive in the first few months because their income is supplemented by Working Tax Credits. This is only temporary and drops away as businesses grow – but without this, many new small businesses will be put in jeopardy and many people considering self-employment will be forced to abandon their plans unless they have a cushion of cash to see them through the early months. This will stifle the economic recovery in the UK which has largely been built by the growth in small businesses – and will leave self-employment as an option only for the relatively wealthy.

The majority of my clients are on benefits when I meet them (and are keen to get off them – forget the media image of people milking the system – I have not met a single person doing that) and their new businesses are a means to them getting off benefits and earning an independent income. They have a very mixed experience of the Benefits System and I think many are too afraid to complain about the way they are treated for fear of sanctions. I see a number of issues repeatedly so it is worth mentioning them:

  • Less and less time is available to individuals in Jobcentres so that individual advice on a career path or options for finding work just doesn’t seem to happen in many cases.
  • Many people are sanctioned – that means their benefits are stopped for a month or more leaving them penniless – for missing or turning up late for appointments. Often this occurs for legitimate reasons – for example many are dependent on public transport to get them to a Jobcentre which can let them down – but no excuses seem to be acceptable
  • Many people are sanctioned because they haven’t been doing sufficient job searches on the DWP system. This ignores the fact that there are large numbers without Internet connectivity who must therefore find a computer somewhere to use and with declining numbers of libraries, this is increasingly difficult. It also ignores the fact that many are not IT literate and need help with the DWP Job search system. It is also questionable as to how effective searching online for jobs actually is and whether forcing people to spend hours and hours every week doing it is a good use of their time – there are instances of people who have made hundreds of applications this way and not had any response from any of them. No one working with the unemployed thinks this is a helpful thing to do – so why make it mandatory?
  • Many people on JSA are sent on work experience or courses which bear no relation to their skills or aspirations – a complete waste of everyone’s time – and whilst doing these they are still expected to sign on and do their job searching which must compromise their ability to give 100% to their work experience – hence the reluctance of some employers to offer meaningful experience
  • Benefits are sometimes reviewed – especially for people on ESA – and this means that payments are stopped whilst this happens – there seems to be no understanding of people who have to live from week to week without any reserves.

One of my co-workers recently said in exasperation “The system is not helping the unemployed – it is punishing them for not having a job.”

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