MINISTERS launched a bid to get a million more disabled people and mental health sufferers back into work yesterday by launching moves to give a tax break to firms that employ them.
The Government announced a review into how to enact a manifesto pledge to give a one-year holiday on National Insurance Contributions (NICs) to firms.
The aim is to get 1million disabled people into work over the next decade. Currently there are 3.5million of them in work.
But the plans descended into another row after insiders claimed Philip Hammond was trying to block the move.
DWP wants the review done in time to report in the spring but sources accused the Treasury of watering down the words in yesterday’s consultation document to kick the idea into the long grass.
A source said: “The Treasury is against this. It’s not DWP that’s standing in the way of doing this, it’s not the Department for Health – it’s the Treasury.”
The move is apparently being resisted by Philip Hammond
The Tories pledged to bring in a full-year holiday for NICs in their election manifesto.
They said it would apply for firms employing disabled workers, those with chronic mental health problems, unemployed people who have been out of a job for more than a year and ex-offenders who have repaid their debt to society.
Analysis shows that the government saves £1billion for every 100,000 disabled people they move from benefits into work.
And for every 1 per cent of Employment and Support Allowance (ESA) claimants who move into work it is worth £500million to the economy – half of which ends up going to Government.
Half of ESA claimants are mental health sufferers.
The consultation will explore a range of ways the Government can “incentivise employers to recruit and retain disabled people and people with long-term health conditions”.
Another suggestion is to make sick pay more flexible so workers can still claim a proportion of the benefit if they’re getting better but not able to return full-time.
The Federation of Small Businesses, which has campaigned for the NICs holidays, welcomed the move.
Boss Mike Cherry said: “The Government saves more than £1billion for every 100,000 people on the Employment Support Allowance (ESA) who get into work, so not only is there a clear moral case for action, there is a clear benefit to the taxpayer and the economy, too.
“That’s why the commitment to take forward Theresa May’s manifesto pledge to scrap the National Insurance charged on the first year of employing somebody with a disability or mental health condition is crucial.
“We have raised this directly with the Treasury and the Department for Work and Pensions, and are pleased to see the way forward set out today, and we hope to see this developed in time for the Chancellor’s Spring Statement.
“Not only will the country benefit, but with more people in work the Exchequer will too.”
The Treasury did not respond to a request for comment.