Hunt’s workforce plan will cost £70,000 per person applying to work in the UK.

British Chancellor Jeremy Hunt’s labor force policy will cost £70,000 for every person applying for a job, the Institute for Financial Studies think tank said Thursday.

The main reason for the high cost is that the government £5bn expansion of free childcare Children under the age of three will benefit mostly from parents who are already working, according to the IFS.

But as families with a parent earning more than £100,000 a year will not qualify for the new 30-hour workday right, the policy would also deal a “huge blow” to spur work for high-paid workers, the think tank said.

Economists have generally welcomed the Chancellor’s efforts to get more people to work by increasing support for child care, making changes to the benefit system and helping people with health problems.

But the IFS analysis shows that this policy package will come at a high price for relatively limited benefits, while creating some perverse effects.

In particular, anyone with a child under school age earning between £100,000 and £134,500 would be better off keeping their taxable income below £100,000 to be eligible for a childcare offer.

Robert Joyce, deputy director of the IFS, said that given this along with a similar break in child support eligibility with parents’ wages reaching £50,000, the government has made an “absolute pork breakfast” of the tax and transfer system for households with over high incomes.

The expansion of publicly funded childcare services will continue to have a greater impact on employment than any other policy: the Office of Accountability estimates that this will put 60,000 people in the labor force and about 1.5 million in employment longer, potentially increasing their lifespan. urgent income.

But IFS said that means the cost of the policy will double, while only a sixth of the funded seats will be new. Most of the money will go to parents who previously paid for childcare.

The other measure — big tax breaks for high-paying retired savers — looks even more costly given its uncertain contribution to the labor force. If the OBR’s central forecast turns out to be correct, it would increase employment by just 15,000 people at a cost of £100,000 per job.

OBR believes that other measures to get people back to work, including advance childcare for low-income parents, intensive employment support for the disabled, and tougher treatment for parents and caregivers who claim unemployment benefits, will have less of an impact. for employment. but they also have a much lower cost per person, around £2,000 to £20,000.

Its projections suggest that the overall package will boost employment by 110,000 by 2027-28 at a cost of around £7bn a year – almost £70,000 per job.

Paul Johnson, director of IFS, said the increase would be “only a fraction of the number of staff lost over the last couple of years” and would be negligible compared to annual net migration.

But Tony Wilson, director of the Institute for Employment Research think tank, said spending on childcare could be justified by the broader benefit to society, parents and child development, while £10,000 to £20,000 is “worth paying to help disadvantaged people. to work and reduce inequality.

According to the OBR, intensive employment support for people with disabilities could increase employment by about 10,000 people.

This will be separate from any repercussions of a larger disability benefit shake-up that will remove any link between people’s ability to work and their entitlement to benefits. This should give people with disabilities the confidence that they can get a job without risking losing a vital income.