Jeremy Hunt is to unveil plans for tougher benefit restrictions on those who “won’t even look for work”, which could include measures to stop those who are persistently sanctioned from claiming.
The chancellor will pledge new changes to the benefit sanction system in his speech to Conservative party conference on Monday, as the government looks to make savings on its welfare bill. He will also announce a move to an £11 an hour living wage, an increase from £10.42.
Hunt is already looking at holding down benefits below inflation, as pressure mounts on Rishi Sunak to make pre-election tax cuts and find areas where the Tories take a different approach from Labour.
The Guardian understands he is also considering measures, to be unveiled in the autumn statement, to withhold benefits from those who are considered to be “disengaged”.
One option under consideration involves closing the claims of those who have six months or more of a “nil award” – which can happen if someone is persistently sanctioned or no longer qualifies.
Under this plan, the claimant would then be barred from making a new claim for a certain period, as a means of trying to get people to stick to their “claimant commitment” that sets out how they should engage with looking for work.
The Conservatives appear to be using tougher rhetoric on benefit claimants ahead of the election, as they believe it could be a dividing line with the opposition of appearing tougher on welfare spending.
In his speech, Hunt will say: “I am incredibly proud to live in a country where, as Churchill said, there’s a ladder everyone can climb but also a safety net below which no one falls.
“But paying for that safety net is a social contract that depends on fairness to those in work alongside compassion to those who are not … since the pandemic, things have being going in the wrong direction. While companies struggle to find workers, around 100,000 people are leaving the labour force every year for a life on benefits.
“As part of that we will look at the way the sanctions regime works. It is a fundamental matter of fairness. Those who won’t even look for work do not deserve the same benefits as people trying hard to do the right thing.”
Hunt will also wrongly claim that Labour has “pledged to end sanctions, removing the incentive to look for a job”.
Labour has said it would stop benefit sanctions from being punitive in a way that strips away people’s dignity and traps them in a cycle of low pay, insecurity and poverty, but former shadow work and pensions secretary Jonathan Ashworth said earlier this year that there would still be a conditionality regime under a Labour government.
The chancellor will present the changes to benefit sanctions as a matter of fairness, but one Whitehall source said the changes under consideration were due to a drive to hold down spending, that more cuts were being mulled, and they were being presented as reforms to improve engagement in the employment market by those claiming benefits.
They said there was a concern within government about overall spending by the Department for Work and Pensions (DWP), and that without further benefit cuts the welfare cap for 2024-25 of £135.4bn would be substantially breached.
Analysis earlier this year by the Office for Budget Responsibility suggested it was on course to be exceeded by about £4bn, although it is only formally assessed in the first year of a new parliament.
Conservative MPs have been clamouring for tax cuts. But Andrew Mitchell, the development minister, warned on Sunday that this should not be done on the backs of the poorest.
He said: “We need to be very clear that we have very properly protected throughout the last 13 years of Conservative government the most vulnerable by maintaining and in some cases increasing the value of their benefits. That’s the right thing for any government to do in any civilised society.”
The DWP has been asked for comment.
Mel Stride, the work and pensions secretary, will also give a speech on Monday that focuses on forcing “deadbeat dads” to pay up for child maintenance claims more quickly.
He will outline a package of new measures to ensure parents who are “shirking their responsibilities” are not allowed to do so.
At a fringe event on Sunday, he said his other main focus was driving down the number of people who are economically inactive, including those who are claiming long-term sickness benefits.
He said there was a growing number of younger long-term sick people, especially those suffering mental health problems.
“I think the issues around that are probably to do with social media to some degree,” he said, saying there were problems with being “constantly connected” that can affect wellbeing.