A few weeks ago Iain Duncan Smith , Secretary of State for Work & Pensions, made a speech arguing that what people needed to do to get out of poverty was work more and then they wouldn’t be poor or need benefits. ‘If people just work a 35 hour week’ he said , all would be well.
In April working couples had the rules for tax credits changed, and lost all entitlement to tax credit if they worked between them less than 24 hours per week. This change was intended to bring savings to the Treasury – although actually if people do manage to increase their hours to 24 or more they would re-qualify for some tax credit assistance – so reducing the saving to the Treasury. However despite all David Cameron’s promises to ‘make work pay’ some people in this situation will be better off not working, and the savings to the Treasury would be reduced. For instance a a couple who work 16 hours on the minimum wage lost a net £3,120 per year in April 2012 after claiming all other possible support. But if they give up work, they will be £736 better off – £14 a week more. And they will cost the state £2,675 more.
The reality is that for many people finding those extra hours is going to be very difficult. A couple in my constituency both working for a prominent department store came to tell me about the contract changes being made by their employer. The wife had been working 9.30 to 2.30 five days a week, which fitted well with school hours. She was now being told she would have to become ‘fully flexible’ which could mean having a 6 hour shift one day and an evening shift the next. Or if she wasn’t willing or able to do that she could have a maximum of 12 hours work a week on fixed hours.
Such so-called ‘zero hours’ contracts are becoming increasingly common, especially in retail.
That’s the real world where even those who want to work won’t find it easy just to ‘work more’.
Many of the new jobs the Government talks about having been created ‘since the election’ have been part time. I’m all for the choice of part time work – but more and more people are reporting that they are working part time but really looking for full time work.