The International Monetary Fund (IMF) has urged Britain and other rich nations to cut benefits and taxes to tackle the worklessness crisis. Mel Stride, the Work and Pensions Secretary, vowed to “do whatever it takes to get Britain working” as the IMF said men in particular would be encouraged to find jobs if countries lowered taxes and benefits. More training and childcare support would help more women into work, the organisation said.
The IMF research, based on analysis of 38 OECD industrialised economies, including the UK, US, and Germany, recommended that higher pension ages would also keep people in work for longer. The comments are likely to fuel the debate among Conservative MPs over the benefits reforms needed to boost work.
Mel Stride, the Work and Pensions Secretary, said “the most radical welfare reforms in a decade” would help end the scourge of worklessness holding the country back. He told The Telegraph: “While our inactivity rate is lower than many economic heavyweights including the USA, France, and Italy, our tax cuts and welfare reforms will grow the labour force by 300,000 people – growing the economy and changing lives.”
Other developed nations face a similar situation, with the IMF warning that the world faced a dire slump in economic growth as a result without radical action to boost productivity. Reduced unemployment benefits and lower labour taxes are associated with higher participation for men of prime working age, while an expansion in secondary education enrollment has a positive association with future participation rates for women.
Former Tory leader Sir Iain Duncan Smith urged Prime Minister Rishi Sunak to focus on tackling the sickness benefits bill. He said that supporting people signed off work with depression and anxiety accounted for an increasing share of the overall benefits bill.
