William Vereker, the chairman of Santander UK and a former business envoy under Theresa May, has blamed Britain’s soaring benefits bill and long-term unemployment on weak numeracy and a poor understanding of financial fundamentals.
Speaking against the backdrop of a rapidly increasing health benefit budget, Vereker warned that many people are overlooking the long-term career benefits of work simply because the immediate income improvement appears marginal compared to benefits.
Vereker said: ‘One of the challenges of unemployment is that people look at the benefits and the job they can get and think, ‘I’m only making an extra €5 or €10 a week – why bother?’ But of course the reason is that you earn more the following year, and then more again. You create an opportunity for yourself.”
He criticized the lack of practical financial education in British schools, arguing that this shortage leaves many young people ill-equipped to appreciate the benefits of steady work. Rather than seeing a low-paid job as a stepping stone, he suggested, people with minimal financial knowledge often see little incentive to give up the security of state support.
The comments come as Labor leader Sir Keir Starmer and Chancellor Rachel Reeves seek to reduce Britain’s soaring sick pay benefits and the number of economically inactive working-age adults, which stands at more than one in five. Critics say generous social benefits encourage dependency. The Center for Social Justice recently found that annual sick pay benefits can exceed income from a minimum wage job by £3,000.
Long-term illness claims have risen by 650,000 since the pandemic to 2.8 million, with a Boston Consulting Group study showing tens of thousands of young people are receiving unemployment benefits directly through education. Ministers have unveiled initiatives ranging from job center reforms to a “youth guarantee” that would see benefits withdrawn from those who refuse work or training, but detailed measures to rein in sick pay remain pending until next year.
Former Home Secretary David Blunkett, now a Labor peer, has expressed his own strong position on the issue, saying: “We have a duty to help people. We have no obligation to help people if they are not willing to help themselves.”