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Kwasi Kwarteng announced moves to promote claimants to work

Prime Minister Kwasi Kwarteng will announce measures on Friday to pressure many workers who claim universal credit to increase working hours or face cuts in their benefits.

The move is part of an effort by the new Liz Truss administration to increase the size of the UK workforce at a time when unemployment was historically low.

Truss told a meeting of US business leaders in New York this week that Britain has an economic shutdown problem and she will put measures in place to get people to work.

KwartengThe mini-budget on Friday will announce changes to the welfare system that aim to boost people’s incomes by pressuring them to work longer hours or find a new job.

The Prime Minister will also bill the move as part of a series of measures – including tax cuts – aimed at boosting UK growth to the pre-financial crash average of 2.5 %.

Kwarteng will announce changes to universal credit requiring claimants to work up to 15 hours a week at the nation’s living wage to see a regular working coach and perform Active steps to increase their income.

This is an increase from the current 12-hour threshold and will put 120,000 more claimants into “intensive work search mode”. Benefits may be withdrawn from non-compliance.

The UK has more than 1.2 million vacancies. Workers subject to the new regulations will have to apply for jobs, attend interviews or increase their working hours.

Kwarteng will say that eligible claimants over the age of 50, including both new claimants and longtime unemployed, will also get extra support from working coaches.

The growing economic shutdown among people over 50 is contributing to a job market shortfall, a phenomenon that has become more noticeable in the wake of the coronavirus pandemic.

This is seen by Kwarteng as the cause of higher inflation and restrained growth. The Treasury Department announced on Wednesday that a return to pre-pandemic activity rates among people over 50 could boost GDP by up to 1 percentage point.

“While unemployment is at its lowest level in nearly 50 years, the high number of vacancies that remain open and dormant in the labor market is limiting economic growth,” Kwarteng said.

Truss said in New York that she wants more economically inactive people “to go to work with a tight labor market and get the right skills.”

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