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Azeem Ibrahim: The Welfare State cannot sustain the current levels of long-term unemployment

Azeem Ibrahim Azeem Ibrahim is a Research Scholar at the Kennedy School of Government at Harvard University, Member of the Board of Directors at the Institute of Social Policy Understanding and Chairman and CEO of Ibrahim Associates.

These days, when we talk about unemployment, we are normally have in mind the people who, up and down the country, are busy going from door to door with their CVs, sitting at home searching recruitment websites, checking their watches to make sure they get to the interview on time, and generally trying as hard as they can to find themselves a job again. It is right that we concentrate on how to help those people.

But it is important that in our rush to think about them, we don’t ignore another category of unemployed people: those who haven’t been in work for a long time, perhaps for whom having a steady job which paid enough is a distant memory. Because over the next decade, as the recovery turns back into growth and growth turns back into boom, there will be millions of people left at home, still not working.

Before the recession, Britain’s economy had been in a better position than it had been in decades. From the early nineties until the crash, Britain had a longer boom than we had done for years. For those fifteen years, it was easier for anyone who was looking for a job to find one than it had been in decades. You would expect that during these sunny times, the number of long-term unemployed people would have fallen, as those who had not had jobs for years got up from their sofas and went out to the Job Centres to try to find work.

But that didn’t happen. Too many people just couldn’t be bothered. And the result is that even during the boom years of 1999 to 2007, the number of people claiming benefit for being out of work was never lower than five million people. That’s the equivalent of every single man, woman and child in Scotland not working - for a decade.

I’m not saying that there were five million individuals who did not want to work - that statistic of five million people refers to different people over the years. I’m not saying that every one of those five million are just lazy – I’m sure there are many who are injured or depressed and would genuinely like nothing more than to be back at work earning an income and supporting their families. And I’m not saying that all of those five million were unemployed for all of that time - if you found a steady job after getting Job Seekers’ allowance for just a month, you’d count as one of the five million.

But over that time, 2.5 million people claimed welfare money for five years or more.

So what I am saying is that I cannot believe that there are nearly two and a half million people in this country who, during the period of the longest economic expansion in our history, were genuinely unable to work for five whole years or more. Five years is a long time to be completely unable to work.

A number nearly half the population of Scotland couldn’t work for more than five years? We shouldn’t believe it. I don’t. I think many long-term unemployed people who are being paid welfare by the state actually can work.

Figures from the Department of Work and Pensions show us what these people are claiming. By far the largest category was those claiming Incapacity Benefit. Between 1999 and 2008, that accounted for about 3 million people. The second largest two categories were lone parents and jobseekers, which accounted for about 1 million each. Then there was a smaller group of Carers and other disabled people.

This year, the Social Security budget ate up an estimated 13.7% of GDP. Granted, that’s for this year so it’s inflated by recession, but it’s still an incredible amount of our tax money.

Everyone knows that over this Parliament – and probably the next – the Government is going to have to make drastic cuts. I think that when you know you need to cut your spending drastically, and when so much money is being handed to people who are not working, it’s time to shake things up.

I do not believe that these aspects of the Welfare State are sustainable over the coming years. Certainly, they do not deserve to be sustained. When a person has been taking money from the government for not working for too long, that money is no longer doing good, it is doing harm. It would serve us all – long-term unemployed and taxpayer alike – if we spent some time talking about what this aspect of our Welfare State is doing, and how to fix it.


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