The benefit system fails people who lose their jobs

Former employees of Thomas Cook are reported as complaining that the benefit system has failed them.  This should come as no surprise.  Universal Credit is based a fundamental misunderstanding of what benefits are for, and what they are supposed to do.  Part of that misunderstanding was the assumption that benefits are all about work: most of the intended recipients are people who are not in the labour market.  But for those people who are looking for work, the next part is the assumption that those people have to be guided or pushed towards work.  The vast majority of unemployed people move back to work within a year, regardless.   What people needed, and what they didn’t get, was income smoothing to tide them over while they found new employment.  What they got instead was delay, obfuscation, confused advice and periods with no money.

I’ve argued in the past for a different approach to unemployment benefits, including provision for short-term income smoothing and a distinction in the pattern and level of benefits for shorter-term and longer-term unemployment.  The French system, based on a convention of employers and trades unions rather than state-based provision,  has both.   The British approach has long been to assume that one size fits all.

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