Jeremy Hunt to make budget plans to get back to work sick and disabled

Britain’s Chancellor will set out his ambition to get hundreds of thousands more people into work in next week’s household by introducing reforms aimed at getting the sick, disabled, parents and older workers back into work.

Inactivity will be a big focus of Jeremy Hunt’s March 15 budget, although critics will question whether his patchwork of changes will significantly alter the dynamics of Britain’s tight labor market.

The Office for Budget Responsibility, which rates government policies for growth potential, is likely to be cautious. Former OBR officials say the financial regulator’s approach is “show, don’t tell.”

Under next week’s proposals, beneficiaries will be encouraged to take up employment or increase their hours through changes to the universal credit system and increased employment support programs.

A sanctions-backed element of coercion is applied, with applicants encouraged to attend meetings with work coaches more regularly and attend skills training camps.

The work ability assessment will be eliminated, allowing disabled people to try work without fear of losing their benefits and reducing the number of assessments required to qualify for health-related benefits.

Childcare costs for people on Universal Credit will now be paid in advance rather than afterwards, while the maximum amount people can claim for childcare under the scheme will also be increased by several hundred pounds.

Hunt will also target the response to people with disabilities, those with chronic health conditions and those over 50, many of whom have retired from the workforce following the Covid-19 pandemic.

Older workers will be offered “returners,” which offer flexible skill training that takes prior experience into account, with an additional 8,000 “Skills Boot Camp” spots to the 56,000 spots currently on offer.

Hunt said: “If you can work, you should work, because independence is always better than dependence. We must close the skills gaps and give people the skills, support and incentives they need to get work.

“Through this plan, we can address labor shortages, bring down inflation and put Britain back on the growth path.”

However, with 1.2 million job vacancies in the UK, ministers privately accept that mobilizing inactive workers in the UK will not be enough to fill the skills shortage and are looking to expatriate workers to fill the gaps.

The government’s Migration Advisory Committee is conducting a comprehensive review of the labor market and is expected to add construction jobs to the list of shortage occupations next week, allowing employers to hire foreign workers at lower wages and with less visa red tape.

The background to the new measures is a sharp increase in the number of people aged 16 to 64 who are not employed due to a long-term illness.

According to the Labor Force Survey, around 5.8 percent of the working-age population is inactive, the highest rate in 16 years. The Office for National Statistics has projected that an aging population will drive inactivity rates even higher over the next three years.

Long-term illness or disability was the main cause of the unexpected rise in inactivity between 2019 and 2022, the data shows.

Britain has a bigger problem than most comparable nations. All 37 advanced OECD economies saw inactivity rates rise in the first half of 2020, but the UK is among just 20 per cent still showing higher than pre-pandemic rates, according to the ONS.

Latest figures show that employment is at 75 percent and unemployment is near a record low of 3.7 percent.