Reforming benefits is not just fair it is essential

Reforming benefits is not just fair it is essential

Around 6.1 million people who have at least one family member in work are counted as in poverty, now compare that to the 5.1 million families in poverty were no one works this shows a broken benefits system in which it pays for some not to work.  There was a time when Labour stood up for the working man but that time seems long gone, Labour stand by while public sector workers get pay cuts but pipe up when they hear benefits will be cut. The statistic above illustrates a broken benefits system in no circumstances should someone out of work earn more than those in work.

By raising the threshold of the basic rate of income tax the Conservatives are starting to make work pay, this alongside the universal credit and the fact that they won't allow benefits to rise more than 1% shows a commitment to rebalance the benefits system towards those who want to work. I am well aware many of those in work also draw some sort of benefit but the proposals which this Conservative government have laid out will rebalance the system in favour of those workers making sure the person in work is always paid more than those out of work. In the current benefits system it costs the government £4 for every £1 given in benefit due to the amount of bureaucracy needed, the new universal credit will cut down the cost of bureaucracy by simplifying the system. Work and Pensions Secretary Ian Duncan Smith has said this will mean that the government will have more money to spend on developing those on benefits so they are more able to compete for jobs.  Our current benefits system is totally different from the original cradle to grave concept in which those who put something into the system got something out, today many people now take more from the system than they put in to the system due to work not paying and also the break down in traditional family structures while not having adequate affordable child care to help single parent families.

There is a strong argument that capping benefits and cutting benefits through introducing a lower than inflation 1% rise will lower public spending because those who need benefits nearly always spend all of what they receive which is good for the economy. However the government has introduced a number of measures which could counteract this negative effect on the economy.  One of these policies is the rise in the tax threshold for basic rate tax payers which will give them an extra £267, this extra money is likely to be spent increasing the amount spent by this group as just like those who draw benefits this group spends most of their income. Also the cut to the top rate of tax (from 50p to 45p) is likely to increase the spending of those with the most to spend not just on goods, but also on business and on charity.  The top rate tax cut is also likely to bring more money into the exchequer as more people are paying it than the old 50p tax. Also there will be a rise of 1% in the threshold for the 40% tax meaning there will be another 400,000 workers are expected to pay the tax as the threshold will be raised lower than the rate of inflation this measure is expected to bring in an extra £1billion a year. The tax cuts will hopefully get the economy growing and counteract the benefit cut; I also added the increase in the number of people paying the 40% tax to show that everyone has to cut back. 

A final point on why reforming benefits is not only fair but essential, public spending is far too much the deficit is lurking around 7.7% of GDP this country is spending much more than it makes and public spending needs to be cut.  It is not easy but it is essential, why should those on welfare continue to see their income increase while teachers, Fire-fighters, Police officers and NHS workers face pay-freezes and cuts.  It is true the country needs a safety net for those who lose their job but for to many people it is like a spider’s web. At the moment people leave school with no qualifications or people with are forced to leave work because they have a child and with the additional cost of child care suddenly they are better off on benefits, the current system does not help these people it traps them in a culture of dependency.  The Conservative changes to the system are good but they could be better, such as they must pledge some of the money saved through benefit reform into education programs for the unemployed.  They must also look at creating affordable child care places so single parents can return to work, and finally they need to look at a social housing program, either through physically building new houses or renovating old derelict ones so that there are affordable council houses which will save the government bucket loads in housing benefit in the long run.