Policy Exchange's Ed Holmes responds to "Working-age 'welfare': who gets it, why, and what it costs"
I agree that it is a bit of a myth that UK unemployment benefits are generous. Jobseeker’s Allowance in fact provides a relatively low salary replacement level compared to similar economies. Little of the welfare bill is attributable to this source and savings in this area are likely to be small.
However, this fact should not disguise the serious need for change. Aside from the very real necessity to reduce the welfare bill, the main issues are eligibility criteria and perverse incentives created by various benefits. The Universal Credit, replacing 51 different types of benefit with just one is the boldest welfare reform in a generation. The transition, over at least a decade, will require considerable care to ensure it does not disproportionately penalise the most vulnerable. Creating a simple standard withdrawal rate should ensure that all those who are able to work feel they can do so.
Ed Holmes, Research Fellow, Policy Exchange