- Document type
- Hughes, Steve; Miscampbell, Guy
- Policy Exchange
- Date of publication
- 3 February 2015
- Social Policy, Poverty Alleviation Welfare Benefits and Financial Inclusion
- Social welfare
- Material type
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The British welfare state is in the middle of a once in a generation upheaval. Ensuring that social security provision comes out of it strengthened requires politicians and policymakers to have an honest debate about the issues. An ageing population, the changing nature of employment, and weak public finances all mean that whoever wins the 2015 general election will have to answer serious questions about how they can guarantee a fair and effective welfare system for years to come. Recommendations in this report include:
- Limiting Child Benefit to four children per household, with progressively reduced weekly payments for each child after the first. The proposed changes could generate as much as £1bn in savings within the welfare system over the course of the next Parliament.
- Including the State Pension in the Welfare Cap. An ageing population will see the State Pension – which already accounts for over 40% of welfare spending – grow as a share of GDP. Including it in the Welfare Cap will create a much more accurate picture of welfare expenditure.
- Replacing contributory Jobseekers Allowance with a new national unemployment scheme and system of personal welfare accounts. Every worker in Britain would make weekly contributions into the scheme – offset by a cut to their National Insurance - and build up a “pot” representing their contribution to the system. The funds would be used in times of unemployment, with people who have been in work all their lives set to benefit from £10,000 upon retirement.
- Relaxing the sanctions regime by issuing pre-paid benefit cards as a non-financial warning – instead of a complete withdrawal of financial benefits - to people who have repeatedly broken the terms of their job search requirements.
- Increasing the personalisation of the welfare system - Different people face different issues which prevent them from finding work and being self-sufficient. The Department for Work and Pensions should attempt to develop a diagnostic tool that segments claimants based on their barriers to work, like in Australia.
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