Welfare means being “well fair”

There’s been lots of chatter across the Labour Party today about the proposed welfare cuts and whether to support or oppose them. The issue here is not quite as it seems as actually the political parties and the public want pretty much the same thing but the issue here is different views about perception and the actual reality.

The British public want a system where the clue is in the name “well fair” but that of course means value judging who should and who should not receive this.

So in the yes group are generally the disabled, the elderly and those who have worked hard in their lives but are now on hard times “through no fault of their own”.

Whereas the no camp basically consists of those who are healthy, able to work but “choose not to” and then a separate category of people whose personal circumstances are value judged by others (as one example, someone with several children and/or from different relationships) claimed as “their fault”

The problem is that whilst these generalisations sound great and you will find large numbers articulating this view including for political soundbites, it doesn’t make sense when applied to reality.

So let’s pick one example – the benefits cap where people are given a total amount of benefit to ensure that “work pays”.  This sounds a very fair idea – why should people on benefits get more than someone who works hard and £20k is a lot for “doing nothing”?

However, most people don’t realise that there are two aspects to benefits namely amounts of actual money that people receive and then monies that they don’t receive and never actually see but pays for a service or facility.

The biggest amount of “benefit” that people get is usually housing benefit which is either paid directly to their Council, Housing association or more commonly now, private landlord.  The level of rent is set by landlords and tenants have no choice as they are generally placed there by agencies. This system is proposed to change under universal credit so the tenant does receive the money first but that is not what happens now.   In effect, the tenant has nothing to do with this at all as the money goes straight to landlords.

On the other hand, people do receive a variety of financial benefits such as child benefit, disability benefit and others relating to being out of work and these are paid into bank accounts. How they spend this money is up to them but the amounts are not generous.

The problem with an overall cap is that tenants have absolutely no way of reducing most of this expenditure and have no choice in the matter. They cannot downsize and in fact there are now very few properties that come within the housing benefit cap anyway. If the overall cap is therefore reduced, all that will happen is that vulnerable tenants would have to be evicted as their housing benefit would not cover their rents and means merely shifting a “welfare” budget to a “local government” budget at much greater cost to the public purse.

Rather than getting into a tangle during a leadership contest about whether to support or oppose an overall benefits cap, a better option for the Labour leadership would be to agree the principle of a welfare cap per household but exclude housing benefit from this cap and then exclude from universal credit calculations. This would be politically clever because they could argue a lower headline cap of say £10k for households whilst pressing the government on reducing private and social rentals and therefore housing benefit. Both of these policies would be popular in the party and nationally by attacking profiteering landlords whilst giving extra protection to those in need. The Govt would find this harder to refuse bearing in mind that the recent budget has already intervened on rents by a proposed reduction.

Wonder if any of the leadership candidates will cut through the issue and propose this?

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2 thoughts on “Welfare means being “well fair”

  1. Nick B Scales

    Labour have contributed to a growing welfare bill by refusing to introduce a living wage and rewarding young women for falling pregnant.Now it would appear that Liz Kendall and Harriet Harman are happy to show their Blairite Tory values by supporting George Osbourne’ s budget. Is it not time we had a radical shake up of welfare and work to ensure work actually pays with a real living wage and more support for sick and disabled workforce so that Tax credits and ESA become a thing of the past as people live with fair wages.

    Reply
  2. Rodney Bates (@RodneyBates1)

    The idea that people are rewarded for falling pregnant is nonsense. At best, those who happen to be in or want social housing will get some extra housing points but this is based on children not them. Child benefit is a tiny fraction of the amount needed to feed and clothe etc. so in fact people are worse off if they “fall pregnant”. I do however agree with your point about a living wage (which is not actually being proposed by the Govt despite their claims) and that this would reduce the need for tax credits if properly implemented. Similarly, it is true that the sick and disabled need more support not less and in my view, most of society would support this. It is those that can work but choose not to that angers people although it is arguable how many are actually in this category.

    Reply

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