People claiming Universal Credit will face stricter requirements to hunt for work or have their benefits cut, Kwasi Kwarteng has announced – despite the Department for Work and Pensions’ refusal to publish research on the effectiveness of benefit sanctions.
In a fiscal statement this morning, the chancellor announced he will increase Universal Credit's so-called administrative earnings threshold from nine to 15 hours a week.
People working under this threshold are subject to the “intensive work search regime”, which requires weekly or fortnightly meetings with a job coach and a requirement to spend up to 35 hours job hunting a week. They can be sanctioned by having their benefits reduced if they fail to meet these requirements, if they fail to apply for a job if told to do so, if they turn down a job offer, or if they reduce their hours or leave work.
With more vacancies than unemployed people to fill them, we need to encourage people to join the labour market,” Kwarteng said.
“We will make work pay by reducing people’s benefits if they don’t fulfil their job search commitments.”
Ministers and the Department for Work and Pensions have long maintained that such sanctions are an effective way to encourage more low-earners into work.
But the department has been criticised for failing to publish research it has commissioned on the effectiveness of benefit sanctions – among other topics.
The Work and Pensions Committee has warned that DWP’s repeated failures to release research “could undermine the trust [of] the public, parliament and the department”.
The MPs used House of Commons powers in January to order a research company to provide a copy of a report it carried out for DWP on disabled people’s experience of the benefit system.
In June, committee chair Sir Stephen Timms wrote to then-secretary of state Thérèse Coffey chastising the department for failing to release several reports “despite expectations or previous commitments to do so”. Among them was an examination of benefit sanctions.
In her response to Timms’s letter in July, Coffey said that despite DWP’s previous commitment to publish the evaluation, it “no longer plan[ned] to publish the report”.
“The notion of a sanction acts not only through its imposition on a claimant but importantly also through its effect as a deterrent. Due to the way the report was commissioned, we were unable to assess the deterrent effect and therefore this research does not present a comprehensive picture of sanctions,” she said.
Currently, anyone working more than nine hours a week while on Universal Credit is subject to the so-called “light-touch regime” that requires them to have work-search interviews with a jobcentre when they begin receiving benefits and again after eight weeks.
Kwarteng said the changes he announced today will require around 120,000 more people on Universal Credit to take more action to seek "more and better-paid work, or face having their benefits reduced".
The administrative earnings threshold is already set to rise from nine to 12 hours a week next week, and will increase by a further three hours in January, Kwarteng said. The threshold for couples will rise to 24 hours a week.
Kwarteng said DWP will also be “strengthening the sanctions regime” for Universal Credit.
He did not set out how the sanctions will change, but said UC recipients “who do not fulfil their job-search commitment without good reason could have their benefits reduced”.
The changes will apply to England, Wales and Scotland. Social-security powers are devolved to Northern Ireland, and so Kwarteng said the government will work with the Northern Ireland Civil Service “to determine the most suitable arrangements” for the nation.
Along with the reforms, Kwarteng said DWP will provide more work-coach support to new over-50s and also, for the first time, to over-50s who are long-term unemployed.
They will receive “intensive, tailored support at jobcentres to help them get into and progress in work, boosting their earnings ahead of retirement,” he said.