Osborne is right about Philpott, the system is broken

Osborne is right about Philpott, the system is broken

George Osborne passed comment on the Mick Philpott case yesterday, when he said a debate was needed about whether the state should “subsidise lifestyles like that.”  He was referring to Mick Philpotts 17 children, which he was using as cash cows.  Moving away from Mick Philpott and concentrating on the core message of Osborne’s message, what should the state subsidise?   Our current Welfare system has morphed into something that would be unrecognisable to William Beveridge.

Beveridge’s view on the welfare state was that “the state in organising security should not stifle incentive, opportunity, responsibility; in establishing a national minimum it should leave room and encouragement for voluntary action by the individual to provide more than that minimum for himself and his family.”  The key to the welfare state was that it was the minimum standard of living, it was never a high standard of living.  It was only supposed to be a safety net to prevent people going without food or losing their house.  It was also based on contributions, today the idea of contributing to one’s own benefits has been lost, for example a school leaver who has put very little in can claim as much as someone who has worked for 20 years.  Also the current system totally fails to promote responsibility it actually promotes irresponsibility, it is easier for young people to get a council house if they have a child it does not matter whether they can afford it or not.  I don’t think it is a coincidence that the UK has such a high level of underage pregnancy, you get money for having the child and when it comes to leaving home you are placed at the top of the housing list.  Also the child benefit despite recent reform is not fit for purpose, how many children should the state support?  1?  2?  6?  There should be a cut of point for child benefit such as you will receive child benefit for your first two children and that is it, the state should not actively encourage people to have more children than they can afford.  The benefit cap is trying to tackle the problem of welfare restricting opportunity but whether it will be successful it is too early to tell,  what we do know though is that for some people it is better to be on benefits that get a low paid job.  These people are not leaches they are victims of a broken system after all would any rational minded person go to work to earn less than they could by not working?  However the benefits system should never be a hurdle to someone getting a job you should always be better off in work or the system is failing after all it is only supposed to be a minimum standard of living.

To conclude Mick Philpott’s are rare in our welfare system but that does not mean that the system is not broken or that it has not lost touch with its founding principles, this was what George Osborne’s message when he made his comments about Mick Philpott's state funded lifestyle.  We currently have an opportunity to reform welfare, some reforms have already been implemented.  But there is still more to be done to reconnect welfare with its founding principles and break Britain’s culture of dependency.    

Welfare is not dead

Welfare is not dead

The picture above shows yesterday’s Daily Mirror front page, and if you like me had enough free time yesterday to read the left wing news, look at left wing blogs and laugh at left wing tweets.  You would know there was a hell of a lot of scaremongering about the death of the NHS and the welfare state in general.  I am not going to deal with NHS reform other than to say health care is still free who cares who provides it as long as it is to a high standard.  My point being is that I was frustrated with the level of misinformation floating around about the new reforms and thought I would blog about a few details of the new welfare reforms.

I will start with the bedroom tax, first thing to note about the bedroom tax is it is not a tax as it is not taking any of your own money away.  It is just taking away on average £14 of a person’s housing benefit if they have a spare room, it is also called the spare room subsidy not the bedroom tax (mainly because it is not a tax).  Also the rule has applied in the private sector for about 20 years , if you receive housing benefit for a private sector property the government does not pay for spare rooms.  In my opinion it is only logical the same should apply for public sector properties as a matter of fairness.  Also people can claim up to £400 in housing benefit, even if you factor in the spare room subsidy housing benefit is still very generous in this country.

Moving on to the universal credit, forget about the cap for a moment and just focus on the administrative cost of benefits.  Before universal credit for every one pound of benefit, it cost the government £4 in administrative costs, the universal credit will deal with these extra costs.  I am aware however very few people if any have complained about the savings in administrative costs and most of the complaints have been aimed at the benefit cap.  The cap for a couple will be £500 per week and the cap for a single adult will be £350 per week.   The cap is very close to what a person working on minimum wage would earn and to be honest why should someone out of work be able to earn more than someone in work.

The changes will be hard on some claimants but our welfare system needs reform to break the culture of dependency and replace it with a culture of responsibility.  The state welfare system is only supposed to be a safety net not a comfort blanket.  The financial crisis was caused by governments, financial institutions, and individuals living beyond their means, it has forced everyone to cut back.  Now those who claim benefit will no longer be able to live beyond their means while the state picks up the tab, the new reforms will force those claiming benefits to face the hard choices just like your average working family.  After all is it fair that benefits rise faster than public sector wages?  Is it fair that we have a welfare system that promotes irresponsibility?  Is it fair to trap people in a web of welfare?  I personally would say no.