The UK’s welfare system is in a parlous state, beset by ineffective policies, a culture of dependency, and an ever-increasing price tag. While well-intentioned, recent reforms such as Universal Credit have done little to change this. We must seek more radical reforms to shore up the UK’s welfare system and boost employment.
This in mind, the UK should adopt a 5 year time limit on all out-of-work benefits, with payments withdrawn incrementally to avoid a ‘cliff at the end of the period’.
We can look to President Clinton’s reforms of the 1990s for evidence of time limits’ effectiveness. Clinton’s Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) saw a 6–7% fall in unemployment counts, a decrease in benefits caseloads by 96%, an unprecedented increase in female employment, and a reduction in government spending by an estimated $54.2 billion between 1996 and 2002.
While they are no panacea, combined with investment in re-training and up-skilling, time limits on welfare would be a significant step towards fixing the UK’s distortional welfare system and breaking the cycle of learned victimhood.