Is unemployment benefit at risk in the future?
One problem which many people will have trouble getting their heads around in the short term is the fact that even if the economy was to pick up tomorrow the unemployment figure would continue to rise well into 2009. This lag between a slowdown in the economy and increase in unemployment has only just started and there are serious consequences for the government.
As unemployment rises this will see the tax take from the UK population fall substantially, thereby resulting in less money going into the government coffers. However, it is actually a double whammy because as unemployment rises we will see the pressure on the benefits system in the UK grow substantially, which is not good news bearing in mind the current predicament of the authorities.
The funding for public services will be stretched to the limit and there is concern that the authorities will introduce new changes to the benefits system to try and reduce the financial burden. Unemployment benefit payments and the likes of housing assistance, reductions in local council tax and other benefits will see UK social spending skyrocket over the next 12 months.
While it is fair enough to give people a gentle push to look for work, leaving them literally on the poverty line after possibly working for many years seems very harsh.
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