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Written by Peter Hutchison

11 November 2010

The British Chamber of Commerce and the Federation of Small Business have suggested that the proposals being outlined today will have no influence on who businesses hire and fire.Unemployed workers are to be barred from claiming benefits for up to three years if they repeatedly refuse job offers under the biggest shake-up of the welfare system in 60 years.Anyone claiming unemployment benefit will have to sign a "three strikes and you're out" contract which will see the work-shy losing benefits if they fail to accept a job offer or refuse to apply for a position recommended by an employment adviser.

Iain Duncan Smith, the Work and Pensions Secretary, hopes the measures in his Welfare Paper will cut the number of workless households by 300,000 but business leaders suggested the proposals would have little effect.

Adam Marshall, director of policy and external affairs at the British Chamber of Commerce, said: “Businesses are telling us that they have a wide pool of applicants for many jobs and they want to get the best person they can.

"Businesses are in a position right now to be very choosy about who they hire. What the Government has to realise is that businesses will be creating the jobs rather than the public sector and what businesses will want are individuals who turn up to work enthusiastically and who gain the skills needed to succeed in that business.”

Eamonn Butler, of the Adam Smith Institute, an economic think-tank, said: "The proposed massive simplification in welfare, and eliminating the perverse incentives in the present ragbag of benefits, will be a powerful force in getting people back to work.

"The biggest problem will be with younger, inexperienced and unskilled workers, who could continue to be priced out of work by the minimum wage.

"Employers simply do not want to hire people that they think are not worth minimum wages."

Published in Telegraph.co.uk here.