Thursday, 26 May 2011

Reducing benefits not the answer.

When the subject of state benefits comes up, it's not long before someone will come out with something along the lines of 'people get far too much on benefits' and it's usually followed by 'you're better off not working'. Well, the fact is that only the latter is anywhere close to the truth.

When we talk about what people receive from the state in the form of benefits, you have to remember to deal with the issue without emotion or, more importantly, without prejudice. The first thing that must be considered is the poverty line. All poverty is relative and what is poverty in this country is not poverty in India. So we must set the poverty line at a rate that we feel is correct for a rich country for, despite right wing hyperbole claiming otherwise, we still are a very rich country.

Now, this is where prejudice often creeps in and it usually presents itself along side jealousy, resentment & bitterness because it's understandable that people want to see a marked difference in the lives led by those on benefits and those who work. Otherwise, what's the point of working?

Here's the problem. What do we, in this country, believe is a luxury and what do think is a necessity? It's reasonable to argue that a TV is a necessity, but what kind of TV? Anyone who has looked for a job knows that it's easier and far more likely to be successful if you have regular access to a computer and a broadband connection so surely that is a necessity too? Obviously, this is not an easy problem to solve but the important thing is to approach it in the right way, and for me, that approach should be to provide as high a living standard as is possible within budget and not aim to just provide enough to get by. Why would we not want to be a country where even our poorest live very well?

The problem is compounded by low wages and high taxes. For the vast majority of people, a weeks wage is only just above that of a weeks benefits and for some, the added costs of working actually do leave them worse off. This is clearly unsustainable and we need to look at ways of ensuring that work provides a significant monetary benefit over and above that of not working but that must not be the easy answer of reducing benefits. It should involve lifting the take home pay of those who choose to work.

What's need for all of this is a simpler and fairer welfare system. It's crazy that our tax code, which is so complex, creates a situation where parents pay out taxes only to receive it back in the form of tax credits or where a couple with one parent working and one at home have half the tax free allowance of a couple that both work. Is it not a fair assumption that the cost of cutting tax altogether for our lowest earners can be offset against the reduction in those forced to claim state help?

If we are to reform Welfare in this country it should be with the objective of lifting the benefit of working, not making the lives of those on benefits harder.

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