Government Government Responses to Responses to

Wealth InequalitiesWealth InequalitiesStrategies Aimed at Targeting Strategies Aimed at Targeting

Wealth InequalitiesWealth Inequalities

ResponsesResponses

The UK Government provides a The UK Government provides a range of benefits through the range of benefits through the Department for Work and PensionsDepartment for Work and Pensions (DPW.)(DPW.)

The aim is to get as many people as The aim is to get as many people as possible from Welfare to Work.possible from Welfare to Work.

Labour’s ViewsLabour’s Views

Aim: to move as many claimants as Aim: to move as many claimants as possible into employment through the possible into employment through the following strategies:following strategies:

Social Inclusion:Social Inclusion: help those excluded help those excluded from work to get a job and come off from work to get a job and come off benefits.benefits. What is social exclusion?What is social exclusion?

Income Differential:Income Differential: Increased the Increased the difference between income from work & difference between income from work & benefits to make moving from welfare benefits to make moving from welfare into work is more attractive. into work is more attractive.

PovertyPoverty

Tony Blair made tackling poverty – Tony Blair made tackling poverty – in particular child poverty – one of in particular child poverty – one of the Government’s main targets.the Government’s main targets.

Aim: to halve child poverty by 2010 Aim: to halve child poverty by 2010 and eradicate it entirely by 2020and eradicate it entirely by 2020 Child poverty did reduce but the target Child poverty did reduce but the target

was metwas met Wealth inequalities actually Wealth inequalities actually

increasedincreased under Labour under Labour

StrategiesStrategies

Jobcentre PlusJobcentre Plus Jobseekers AllowanceJobseekers Allowance The New DealThe New Deal National Minimum WageNational Minimum Wage Working Tax CreditWorking Tax Credit Child Tax CreditChild Tax Credit SkillseekersSkillseekers Modern ApprenticeshipsModern Apprenticeships

Tick any of these

strategies you have already heard of

Jobcentre PlusJobcentre Plus

Helps unemployed people claim the Helps unemployed people claim the correct benefit they are entitled to and correct benefit they are entitled to and find suitable employment.find suitable employment.

Benefit for people of working age out Benefit for people of working age out of work is called Jobseekers Allowance of work is called Jobseekers Allowance (age 25+ receive £65.45 per week.)(age 25+ receive £65.45 per week.)

Not normally paid to people 16/17 Not normally paid to people 16/17 years oldyears old

Why not?Why not?

The Flexible New DealThe Flexible New Deal

““New Deal is a key part of the New Deal is a key part of the Government’s strategy to get people back Government’s strategy to get people back to work. It gives people on benefits the to work. It gives people on benefits the help and support they need to look for help and support they need to look for work, including training and job work, including training and job preparation.”preparation.” (DWP) (DWP)

New Labour introduced the New Deal in New Labour introduced the New Deal in 1998 to reduce unemployment and improve 1998 to reduce unemployment and improve job opportunities for those who had been job opportunities for those who had been claiming benefits for at least 6 months.claiming benefits for at least 6 months.

New Deal ProgrammesNew Deal Programmes

New Deal for Young People (18-24)New Deal for Young People (18-24) New Deal 25+New Deal 25+ New Deal 50+New Deal 50+ New Deal for Lone ParentsNew Deal for Lone Parents New Deal for Disabled PeopleNew Deal for Disabled People

New Deal is part of the Labour New Deal is part of the Labour Government’s ‘Welfare to Work Government’s ‘Welfare to Work Strategy.’Strategy.’

ProcedureProcedure

Unemployed person is given a Unemployed person is given a personal advisor who works with the personal advisor who works with the individual throughout the individual throughout the programme. The personal advisor programme. The personal advisor assesses the person’s needs and assesses the person’s needs and helps them get back into helps them get back into employment. employment.

Role of Personal AdvisorRole of Personal Advisor

Help with job applications and CVsHelp with job applications and CVs Interview techniquesInterview techniques Development of necessary skillsDevelopment of necessary skills Arrange work experience with an Arrange work experience with an

employer or voluntary organisation employer or voluntary organisation (e.g. charity shop)(e.g. charity shop)

Help with training for a specific jobHelp with training for a specific job

After the New DealAfter the New Deal

The Flexible New Deal has been The Flexible New Deal has been scrapped and will come to an end this scrapped and will come to an end this summersummer

In its place: the single Work In its place: the single Work ProgrammeProgramme Same aim – welfare to workSame aim – welfare to work What is new: longer to work with people, What is new: longer to work with people,

greater flexibility in support programmes, greater flexibility in support programmes, more incentives for employers to work more incentives for employers to work with the groups which are hardest to helpwith the groups which are hardest to help

National Minimum Wage National Minimum Wage (NMW)(NMW)

The Labour Government introduced the NMW The Labour Government introduced the NMW in 1999 to ensure workers were given a in 1999 to ensure workers were given a decent hourly rate and to make work for decent hourly rate and to make work for unemployed people more attractive than being unemployed people more attractive than being on benefits.on benefits.

It is illegal to pay less than:It is illegal to pay less than: £5.93 - the main rate for workers aged 21 and over £5.93 - the main rate for workers aged 21 and over  £4.92 - the 18-20 rate£4.92 - the 18-20 rate £3.64 - the 16-17 rate for workers above school £3.64 - the 16-17 rate for workers above school

leaving age but under 18leaving age but under 18 £2.50 - the apprentice rate, for apprentices under £2.50 - the apprentice rate, for apprentices under

19 or 19 or over and in the first year of their 19 or 19 or over and in the first year of their apprenticeshipapprenticeship

Impact of NMWImpact of NMW

It can be argued that the NMW has It can be argued that the NMW has reduced the wealth gap by helping reduced the wealth gap by helping people move from benefits to work.people move from benefits to work.

Those who previously relied on Those who previously relied on benefits may have been encouraged benefits may have been encouraged to find jobs because their pay made to find jobs because their pay made up for lost benefits. This had been a up for lost benefits. This had been a problem particularly for lone parents problem particularly for lone parents who also had to pay for childcare.who also had to pay for childcare.

However…However…

Some employers continue to ignore the Some employers continue to ignore the law and pay employers below the legal law and pay employers below the legal requirement. These employers claim requirement. These employers claim that paying the minimum wage would that paying the minimum wage would result in staff redundancies or even the result in staff redundancies or even the collapse of their business.collapse of their business.

Some Unions argue that the amount is Some Unions argue that the amount is still too low and that it should be closer still too low and that it should be closer to £6.50 per hour and that 16-21yr olds to £6.50 per hour and that 16-21yr olds should receive the same amount for the should receive the same amount for the same job.same job.

Working Tax Credit Working Tax Credit (WTC)(WTC)

This was introduced by the Labour This was introduced by the Labour GovernmentGovernment

This benefit is not only for people with This benefit is not only for people with children but also for non-parents who go to children but also for non-parents who go to work rather than relying on state benefits.work rather than relying on state benefits.

WTC allows working people on low WTC allows working people on low incomes to pay less tax on their wages and incomes to pay less tax on their wages and so retain more of their income.so retain more of their income.

Families on WTC are also eligible for Families on WTC are also eligible for Childcare Tax Credit (up to 70% of Childcare Tax Credit (up to 70% of childcare costs.)childcare costs.)

Child Tax CreditChild Tax Credit

Paid to all families with children Paid to all families with children (regardless if employed or not.)(regardless if employed or not.)

Payable to couples with combined Payable to couples with combined income of up to £58K (2005), although income of up to £58K (2005), although those whose income is close to this those whose income is close to this amount will only get a minimum amount.amount will only get a minimum amount.

It is targeted on households with It is targeted on households with children to reduce levels of child poverty children to reduce levels of child poverty in the UK.in the UK.

SkillseekersSkillseekers

Programme applies to 16-18 year Programme applies to 16-18 year olds.olds.

Young people gain skills and Young people gain skills and experience.experience.

Skillseekers work towards Scottish Skillseekers work towards Scottish or National Vocational Qualifications or National Vocational Qualifications and can work through them at their and can work through them at their own pace.own pace.

Modern ApprenticeshipsModern Apprenticeships

Targeted at 16-24 year olds.Targeted at 16-24 year olds. Work-based training leading to a Work-based training leading to a

qualification.qualification. Apprentices work with an employer over a Apprentices work with an employer over a

period of time (sometimes up to 3-4 years.)period of time (sometimes up to 3-4 years.) Young person may be kept on at the end of Young person may be kept on at the end of

their training.their training. Most popular apprenticeships are Most popular apprenticeships are

Construction, Engineering, Business Construction, Engineering, Business Administration etc.Administration etc.

Helping the ElderlyHelping the Elderly Pensions Credit – introduced in 2003 and Pensions Credit – introduced in 2003 and

aims to help pensioners on lower incomes aims to help pensioners on lower incomes and reduce poverty amongst the elderly.and reduce poverty amongst the elderly.

Everyone over 75 gets a free TV licence.Everyone over 75 gets a free TV licence. Winter Fuel Payment – one off annual Winter Fuel Payment – one off annual

payment of £250 to help elderly people payment of £250 to help elderly people with the cost of heating during the winter with the cost of heating during the winter time.time.

State Pension is currently £97.65 per week State Pension is currently £97.65 per week (single person) & £156.15p/wk (couple.)(single person) & £156.15p/wk (couple.)

Other Benefits for Low Other Benefits for Low PaidPaid

Free prescription charges (National Free prescription charges (National Govt)Govt)

Free eye tests and glasses (National Free eye tests and glasses (National Govt)Govt)

Free dental care (National Govt)Free dental care (National Govt) For children, pensioners and low paidFor children, pensioners and low paid

Housing benefit (Local Govt)Housing benefit (Local Govt) Council tax benefit (Local Govt)Council tax benefit (Local Govt) Free School Meals (Local Govt)Free School Meals (Local Govt) Clothing Vouchers (Local Govt)Clothing Vouchers (Local Govt)

Coalition government Coalition government and welfare reformand welfare reform

Plan to replace complicated system of Plan to replace complicated system of benefits and tax credits with a “universal benefits and tax credits with a “universal credit”credit”

Aim to get 1.5 million Britons back into Aim to get 1.5 million Britons back into workwork Greater obligation on JSA claimants to find Greater obligation on JSA claimants to find

work – under proposals claimants face losing work – under proposals claimants face losing the benefit for up to the benefit for up to 3 years3 years

£400 p/w cap on housing benefit from £400 p/w cap on housing benefit from April 2011April 2011

Reassessment of IB claimantsReassessment of IB claimants