John
01-03-2011, 02:30 PM
Rising unemployment will add an extra £1.4bn to the welfare bill, according to the Government's independent financial watchdog.
The unemployment benefit bill will be £700m higher than previously expected, the Office for Budget Responsibility found.
It said the cost of housing assistance would also grow by the same amount because larger numbers will claiming jobseeker's allowance or drop into lower wage brackets.
Its analysis is based on the revised unemployment estimate after the June budget, when it changed its forecast from 6.3% to 6.5% for 2014.
Since then the forecast has been revised upwards again, to 6.7%.
Shadow work and pensions secretary Douglas Alexander said the OBR analysis demonstrated the risk the Government was taking with the economy and its package of cuts.
"The growing cost of the risk the Government is running with the economic recovery is now emerging," he told The Guardian.
"The result of policies which undermine growth and jobs is a longer dole queue and a higher welfare bill."
It comes as Labour leader Ed Miliband claims the impending 2.5% increase in VAT will cost families an extra £389 a year and hinder economic growth.
Source - Yahoo.
The unemployment benefit bill will be £700m higher than previously expected, the Office for Budget Responsibility found.
It said the cost of housing assistance would also grow by the same amount because larger numbers will claiming jobseeker's allowance or drop into lower wage brackets.
Its analysis is based on the revised unemployment estimate after the June budget, when it changed its forecast from 6.3% to 6.5% for 2014.
Since then the forecast has been revised upwards again, to 6.7%.
Shadow work and pensions secretary Douglas Alexander said the OBR analysis demonstrated the risk the Government was taking with the economy and its package of cuts.
"The growing cost of the risk the Government is running with the economic recovery is now emerging," he told The Guardian.
"The result of policies which undermine growth and jobs is a longer dole queue and a higher welfare bill."
It comes as Labour leader Ed Miliband claims the impending 2.5% increase in VAT will cost families an extra £389 a year and hinder economic growth.
Source - Yahoo.