Controversial benefit cuts backed by MPs

Sweden on Thursday adopted controversial reforms of its generous unemployment benefit system which has brought thousands of people onto the streets in defence of a long tradition of welfare protection.

The law which cuts state payments to the unemployed, was passed with a narrow majority, 158 for and 151 against, while 40 MPs were absent, officials said.

The reforms package reviews the qualifying criteria and raises the financial contributions which must people must make to the system.

Contributions would depend on employees’ unions but on average would be tripled.

The law will come into effect on January 1, 2007, although the reduction in payments will take effect in March.

On Wednesday – when the legislation was due to be passed – opposition parties managed to delay the vote and succeeded in sending the text back to a parliamentary standing committee for employment for a second reading.

The center-right Alliance won the election on the back of a promise to tackle unemployment by increasing incentives for people to seek work rather than live off benefits.

Under the changes, the amounts paid in unemployment benefit would be cut from a maximum of 730 kronor per day to 680 kronor, with a review after 300 days.

The Swedish Confederation of Trade Unions (LO), which represents 15 unions, opposed the reform package, arguing that cuts in unemployment benefit would force people to accept badly paid jobs.

More than 250,000 people signed a petition organized against the reforms and, in scenes rare for Sweden, thousands of workers demonstrated against the reform in Stockholm and across the country last week.

Although official figures put the jobless rate at 4.3 percent in November, experts say that a fifth of Swedes of working age live on state subsidies – either claiming unemployment, sick leave or early retirement payments or taking part in government retraining schemes.