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photo credit: splityarn
Evidence that conditions and sanctions work to get people off benefits has lead to a review headed by Professor Paul Gregg of Bristol University to further this practice in tackling the

“Escalating conditions for the long term unemployed or those thought to be abusing the system.

James Purnell who introduced the Green Paper on Welfare Reform said:

“New evidence published today shows that the conditions and sanctions we have introduced over the last decade have played an important role getting people off benefits and into work.

“But there is still a minority of people who repeatedly fail to do the right thing. It is clear that for them, the current penalties are not effective in changing their behavior.”

According to the Guardian sanctions are what the government describes as ‘the hidden art of persuasion.’ And this threat of persuasion is likely to make claimants look for work, according to a survey carried out by the DWP. How long people stay in work and whether that work is suitable has not been surveyed. 

Besides persuasion, support and incentives are the crucial elements in tackling unemployment and enabling progression. If the UK is to demonstrate best practice in Welfare we need to broaden our minds and think outside the box.  As Professor Paul Gregg considers various experiences from across the world in devising the next steps for the Welfare System places like Brazil and Pakistan need to be given due thought.

In Brazil and Pakistan governments are heavily investing in the informal economy with a five year plan based around incentives and support to harness  informal workers and utilise entrepreneurial skills.

Dr Sabur, who is chairman Policy Planning Cell of the Ministry of Labour and Manpower in Pakistan and influenced the thinking of the latest 5 year plan, argues that

“the black economy cannot be eliminated through punitive measures and that it needed to be tackled by providing  incentives that would gradually merge the black economy into the formal economy.” 

In Brazil a micro-loan provided by government to support informal workers has enabled Ms Sampaio to buy nail polish and kick start her manicure business, which she runs from her house.

“I feel like we are part of this group of people that are coming up in the world,” said Ms. Sampaio, 28. “When you don’t have anything, when you don’t have a profession, don’t have the means to live, you are no one, you are a mosquito. I was nothing. Today, I am in heaven.”

According to a study launched by the International Monetary Fund what creates the informality, in the specific case of Peru, is the lack of flexibility in the workforce.

Professor Gregg’s vision for the UK’s Welfare system is based on flexibility but currently there is no indication of accommodating informal work and creative ambition into the review on progression and persuasion.

The Informal Economy Campaign seeks to do just this.