By Marcus Leach
Start-ups and small to medium sized businesses (SMEs) may be the biggest winners in the incapacity benefit crackdown, reports SME Caxton FX, in light of the news that up to half a million more people may soon be looking for work.
The additional workforce could benefit the economy hugely, particularly if they take on roles in the manufacturing sector or at start-ups and SMEs.
“Chris Grayling suggested that the changes could lead to 500,000 people currently on Incapacity Benefit being moved to jobseekers allowance," Rupert Lee-Browne, Caxton FX CEO, said.
"This is a huge number of people to bring into the potential British workforce - instead of being a drain on the economy many of them will take on roles in manufacturing, helping to increase production levels in Britain. Others will apply their currently unused skills in start-ups and SMEs across the country.
“Strengthening enterprise and increasing manufacturing production are the keys to improving our financial stability. The Government is offering a £14,000 payout — albeit with clauses — to private businesses that employ those formerly on incapacity benefit; this should provide sufficient encouragement for businesses to overlook the jobseeker’s CV gap.”
The cost saving element might be the biggest factor, but the influence on business will be significant.
“The weekly payment of £91.40 is currently made to 2.1million people every week," Lee-Browne concludes.
"If half a million of those are able to work, then we are currently paying out nearly £2.5billion per year to Brits who could be employed and paying taxes. The direct savings, and eventually the additional tax payments, will clearly be of huge benefit to our economy; but the additional workforce could be equally, if not more, important to our long-term financial stability.”