The more I read about this welfare cap, the crosser I get. Not because it will take money away from anyone – far from it, frankly; more because it will still give people who don’t work over three times the minimum wage. £26,000 in benefits is over £35,000 a year once tax and National Insurance is included – and is, according to the IFS, more than 94 per cent of people in the UK earn.
I do think we as a society have an obligation to help those who can’t help themselves. But I do not see why people should have to pay for those who won’t help themselves to live in nicer houses, have holidays and other things that those who work can’t afford, and – crucially – not have the worry that most working people do about the security of their jobs, and what they can give their children.
The changes proposed by the Government will not affect the disabled, war widows/widowers or households with a worker. I don’t think that is unreasonable and in fact I question whether they go far enough.
As, incidentally, do most people. A YouGov poll this weekend shows that 36 per cent of people think that the cap should be under £20,000 a year.
If we’re agreed that the aim of this cap should be to make work more attractive than not working, has it really been thought through in full? Is there a better way to ensure that those who work and do the right thing gain, and those who won’t… don’t?
As Mary-Ann Sieghart wrote in the Independent this morning, it’s that fabled squeezed middle who feel most strongly about this. It is they whose wages have fallen 4 per cent, and who face rising inflation. In one of his many attempts to be coherent last year, Ed Miliband said that Labour couldn’t be seen as the “party of those ripping off society any more”. Given that he has decided that his Lords will vote against the Government tonight, this is unlikely. But the thing that might really cut through is something that I don’t think the Coalition has the guts to do…
He should propose a cap at the level of the minimum wage. Which would be raised to make sure it is actually liveable on, as I have argued previously (building on Ed Miliband’s own very Conservative idea of tax breaks for companies that pay living wages) and paid for by reducing the level of tax that companies pay – because it is pointless simply recycling money.
I don’t have all the answers, and I don’t know if any of the above is practical. But the aim must – surely – be to radically reduce complexity, increase the disposable income and incentives for people in work, and properly encourage people into work.
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Irrespective of where this cap is set, there should be a stand-still on benefits for 5 years – which would encompass huge savings and gradually get people to realise they better work.
And any landlord worth his salt will look very hard at turning down certain cash ( albeit somewhat less) than the dangers of voids and potential non-payment. I’d be very surprisewd if anyone actually has to move out of any accommodation at all
If you’ve had to live on benefits, as I had to very recently, you quickly realise it is not a fun experience. My £60 a week job seekers allowance wasn’t a great deal, and that was when I actually recieved it. After doing a weeks work I had my payments stopped for over a month before I could convince them I wasn’t working, and then was continually scrutinised as if I was some sort of criminal at every opportunity.
I find it very difficult to believe assertions that “no disabled people will be affected” or “nobody will have to move out”. This is a complex system with all sorts of differing cases, and generally affecting those with the weakest voices in society. Those who are getting 26k or more are probably going to be families who get extra top ups and income related payments. Are we really comfortable with throwing families out of their houses or even onto the streets as a risk to take? Also, is it fair that couples are effectively encouraged to seperate to double their cap?
I’ve no doubt that welfare dependency is a problem in Britain, and we should be making sure that work pays. But this feels uncomfortably like blaming the feckless unemployed for everything, and a first step towards talking about the ‘deserving and undeserving poor’. At a time where the economy is in intensive care, it will be hard to tackle this properly. Especially since the problem is not that people won’t/aren’t applying for jobs – its that there are 5 people for every vacancy.
Hi David
Sorry to hear about your job loss, and glad you are back on your feet.
You didn’t get anything LIKE £26k a year though, did you? And it was temporary. It’s supposed to be a safety net and yes I do hope that every single job centre worker scrutinises every applicant properly – it’s not their money, it’s that of taxpayers and they have a responsibility to use it properly.
The broader point is surely that there need to be some very serious changes in how/what/when we pay benefits. It shouldn’t be the case that nine in ten households receive some – it should be far far fewer. It should be for those in need who cannot provide for themselves.
I also like KingLear’s idea of a freeze – as I wrote at the time, I was very unimpressed by benefits being uprated when pay was effectively being decreased.
I stick to my main point though: it is not fair on either side that it is possible to have a better life on benefits than in work. The news last night had some (slightly ‘central casting from Number 10′) vox pops making exactly that point.
I agree about your last point, but I am not totally sure this is really the case. And to the extent it is, my suspicion is this is not a problem big enough (in terms of size) we need a whole bill about it.
My other problem with the current debate is it is framed in terms of saving money. If we want to solve welfare dependency in communities blighted since the 80′s, it’s going to cost a lot of money giving the people concerned new skills and creating active industrial policies to get jobs moving there. It is a fools paradise to believe we can just reduce the payments and these problems will go away.
I seuspct that Beveridge would feel unhappily vindicated rather than amazed. He intended that welfare be funded by insurance, and warned Bevan that irresponsible over-use and under-funding would result if it were to rely on taxation.