The aim of recognising previous labour market contributions in benefit eligibility and payment levels, in order to enhance the political legitimacy of the benefits system, is understandable. And we agree that the role of contributory benefits in partially replacing lost income when someone becomes unemployed can help some people return to sustainable jobs more swiftly.
The problem, however, is that disabled people, and people with long-term health problems, will see their contributory benefit entitlements scaled back if current proposals go ahead. The proposed Unemployment Insurance system could actually reduce expenditure on contributory unemployment benefits by at least £2 billion per year, by ending the long-duration new style Employment and Support Allowance awards. Payment levels for unemployed people in general are being increased, resulting in higher spending. But this is more than offset by withdrawing entitlements for contributory benefits typically received by people leaving employment due to ill-health.