George Osborne wants long-term unemployed to work for their benefits

The government has unveiled a new Help to Work scheme aimed at encouraging the long-term unemployed back to work, under tougher rules for benefit payments.

The Chancellor George Osborne, told the Conservative Party conference in Manchester that welfare must be "fair for those who need it and fair for those who pay for it"

The scheme will mean people in long-term unemployment who are capable of work will be asked to work in return for their benefits.

Those who have been unemployed for three years or more will be asked to:

• take part in community work placements, such as clearing up litter and graffiti in their local areas
• attend daily signings at the job centre until they find work; or
• participants with multiple barriers to finding work, for example literacy or numeracy problems, will be provided with intensive support to address their problems

Claimants will be expected to be on a training scheme, community work placement or intensive work preparation – losing their benefit if they fail to comply, the government has announced.

Help to Work will be applied to all claimants of Jobseeker’s Allowance when they leave the Work Programme from April 2014.

It will not apply to Employment and Support Allowance claimants.

In his conference speech, Mr Osborne told Tory activists: "We are saying there is no option of doing nothing for your benefits, no something for nothing any more.

"They will do useful work to put something back into their community; making meals for the elderly, clearing up litter, working for a local charity.

"Others will be made to attend the job centre every working day.

"And for those with underlying problems, like drug addiction and illiteracy, there will be an intensive regime of support. No-one will be ignored or left without help. But no-one will get something for nothing."

But Labour's Shadow Chief Secretary to the Treasury, Rachel Reeves said:

"It’s taken three wasted years of rising long-term unemployment and a failed Work Programme to come up with this new scheme. But this policy is not as ambitious as Labour’s compulsory jobs guarantee, which would ensure there is a paid job for every young person out of work for over 12 months and every adult unemployed for more than two years.

"With Labour’s plans we would work with employers to ensure there are jobs for young people and the long term unemployed - which they would have to take up or lose benefits. Under the Tory scheme people would still be allowed to languish on the dole for years on end without having a proper job."

Economy "on the right track"

Mr Osborne reiterated his claim that the UK was on the right track to economic recovery. He said that the government's economic plan was working but was "far from complete", saying that people would not see their family finances"transformed overnight".

He criticised Labour, who he claimed were "declaring war on enterprise".

While he argued that the the UK was on the right track, he warned people their family finances would not be "transformed overnight".

The chancellor insisted the government's economic plan was working but was "far from complete" and turned his fire on Labour - accusing them of "declaring war on enterprise" and calling their plan to freeze fuel prices as "phoney".

Labour's Rachel Reeves attacked the Conservatives saying: "After just two days of their Conference, the Tories have made £1 billion of unfunded spending commitments. But the Tories still haven’t set out how they will help most working people, who are on average £1,500 worse off since David Cameron came to office, with the cost of living crisis.

"By pressing ahead with a tax cut for millionaires and opposing the measures we announced last week to freeze energy prices and expand free childcare for working parents, the Tories have shown just how out of touch they are."

Mr Osborne said he hoped to freeze fuel duty until 2015 to help people with the cost of living, if savings could be found in government funds to pay for it.

British Chamber of Commerce reaction to Chancellor's speech

John Longworth, Director General of the British Chambers of Commerce (BCC), broadly welcomed the Chancellor's speech:

“This conference season, party politics and electioneering have dominated the discourse, when our political class should be focusing on growth and wealth creation.

“So it was heartening to hear George Osborne bring the debate back to our incomplete economic recovery, and the importance of getting the fundamentals right for the future. This is precisely the time when the economy must be the thread that runs through every government policy. It must be front and centre for our political leaders at all times.

“If Britain’s economy is to go from being just good to truly great, the focus the Chancellor exhibited in his speech must be maintained relentlessly for years to come. We must be ambitious for Britain – and our political leaders must get moving, and ensure that their commitments to growth and wealth creation are not just warm words.”

However, he called for more financial support for businesses: “We would have liked to hear more from the Chancellor on business access to finance. The government must make a commitment to scale up the British Business Bank if we are to see young, innovative and recovering companies achieve their growth potential.”