The newly unemployed face a bigger cut in their living standards in this recession than those who lost their jobs under the previous government, the TUC says today (Wednesday) in a call to the Government to increase unemployment benefits in next week’s Pre-Budget Report. The TUC believes that increasing Job Seeker’s Allowance (JSA) would prevent hardship and provide an effective boost to the economy alongside tax cuts. JSA for a newly unemployed single person over 25 is just £60.50 a week. The gap between earnings and JSA has increased over the last 30 years because JSA has increased each year in line with price inflation, not earnings. This means that the newly unemployed will face a bigger drop in their income than in the recessions of the 1980s and 1990s. If JSA had been increased in line with earnings over the last thirty years, the rate for a single person over twenty-five would now be more than £100 a week. Increasing it in line with earnings since 1997 would give it a value of £75 a week - £15 more than its current level. This means that the gap between benefit and earnings has grown by 20 per cent since the Government came to power.

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11 November 2008
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