Another bubble I'd like to burst, as sadly it's heading into dangerous territory now. There is a lot of hatred out there on this subject, and I'd like to try and get some accuracy& clarity back into this debate. Let's talk Benefits Culture.
Obviously I've previously blogged on Philpott & those supermassive families ( more than 4 kids etc etc ), but what I want to make people aware of is the actual spend.
Much as Jobseekers is not supposed to be fun you'll find the bulk of Benefit spend is NOT on Jobseekers. This might surprise some.
Most of the Benefit spend is on The Disabled, The Elderly,& those in work. Yes, a huge chunk of Benefit spend is on those who are working. They use Housing Benefit, Tax Credits, & Child Benefits typically.
Now if we ignore The Disabled & Elderly ( they can't change their plight really ) what can we do to get spending down on those in& out of work?
More jobs is a good start. When Labour left power in 2010 growth ( Job Creation ) was at 3%. The Con-Dems then made their adjustments and growth shifted to about 0.5% over the past 3 years. And this is extremely serious. Our population is still growing, and yet our job supply is not keeping up. Which is why we now have mass-unemployment issues comparable to the 1980's ( growth needs to be high enough to keep up with population growth or unemployment will rise ). But if there are no jobs out there then how can this be fixed? Education is the answer. Teach people how to do stuff, so that they stand a better chance of creating their own jobs.
Sadly this govt have cut colleges, English Language schools, and trebled University Tuition Fees. And there is still a huge shortage of Apprenticeships out there. So it's not easy to get an education at present. If a Student ends up £40,000 under with Student Debt the BBC Accountants worked out they'd have to pay back£80,000 if they score an average job for their degree. Only the rare few will now see major increases in income from getting a Degree. Which really doesn't help. So it's not easy out there. Education opportunities are suffering due to funding cuts.
This will be an important issue come Election 2014 ( the local Councils ) & Election 2015 ( The Nationals ).
But what about those still in work? Why on earth are they getting Benefits as well? Surely that is a waste of money?
The Tax Credit system was brought in under New Labour to help small businesses struggling with the new Minimum Wage. It was set up as some small firms could only afford to pay minimum wage, and still needed to employ staff. Like with Housing Benefit it tops up your income so you can afford to live near your job. It's a subsidy for small firms basically. It was accepted the larger firms would pay a fair wage, and as such their workers would not need extra help. This might have been the first mistake by New Labour, being honest.
Some big firms soon started paying minimum wage whilst announcing bumper profits for their shareholders. They saw a legal way to boost their profits ( by lowering wages ), so did just that. They exploited the generosity of the previous govt.
So it's pretty obvious some of these big firms can afford to pay a higher wage, and simply don't. I think it's safe to say the In-Work Benefits System needs a review. Is it wasteful of Taxpayers money to hand over benefits to people working for firms that can afford to pay higher wages and simply don't? This is a major decision voters will face.
The Con-Dems are happily cutting these benefits at the minute, so it's going to get tougher for the low paid. All you have to do is read the papers to see that. And seeing as the low paid spend 100% of their income in the local shops & businesses for them to take a pay cut is serious for their community as well.
Are you happy with this? This is the dreaded Benefits Culture that people seem to loath. A system designed to help small business that is not perfect and is being exploited by some larger firms.
I would hope it also obvious that leaving the Disabled alone is reasonable, as there are much more serious fish to fry. Disability Benefits have a fraud rate of about 0.5%. Most people are VERY honest,& the tests are already pretty tough. It's the same with Employment & Support Allowance. The fraud rate, in reality, is actually VERY low. Only a few people are lying when they claim to be on the sick. Not the vast armies that some papers would like you to believe.
So, how do we get this in-work Benefit Bill down? Both major parties are putting out solutions. The Conservatives are relying on the Minimum Wage and market forces alone. When firms can't get quality staff they'll have no choice but to pay more. Well, that's the theory anyway. This idea has some merit sure, but what about those who don't want to move around the country ( leaving their friends & family behind )? Is the Market really as mobile as The Govt believe?
Also, rents are uncapped under the Conservatives ( and have been uncapped since Thatcher removed the caps to allow competition in to 'lower prices' ). Again it is simply left to the market to do it's thing. When was the last time you had a rent cut due to the supposed competition out there? In reality Croydon Wages are low and Croydon rents are high. And that means in-work Benefits payments will remain high. Or these workers will either starve or end up homeless.
Labour are pushing for The Living Wage. This is a pay rise for many low-paid workers ( like people working in Care Homes ), so that they can live on their wages and not need to claim Benefits as well. Even Boris likes The Living Wage.
It forces the Private Sector to pay up, instead of exploiting like I previously mentioned. It's still early days, but this could be a viable solution for reducing the in-work Benefits bill. If the Private Sector pays up more ( possibly by force if they won't do it voluntarily ) us Taxpayers won't get hit for the difference. Many people are growing to like this idea.
Obviously those small firms who can't afford The Living Wage will need some kind of assistance still. But if it stops the bigger firms lying & exploiting their staff then surely that is a good thing?
One other thing to remember. Even the Disabled can work. Some of them can't do much sure, but others can do a lot if properly supported. This is what Disability Living Allowance does ( soon to be changed to the Personal Independence Payment ). Motability is a big one here. Motability is a part of DLA which allows people to hire cars so they can get to & from work. There are many Disabled workers who work, don't need to claim much in the way of Benefits due to this, & simply use their DLA to cover the car to get them about.
The Govt is cutting this Motability bit. So some people won't be able to get to work anymore. So will have to jack it in. Is this the right thing to do?
I'd also like to point out how under the new Sickness Benefits cuts brought in by this Govt if you are on them & marry you lose all of your Benefits and your partner has to pay for EVERYTHING if they earn a low wage or more. So Disabled people will need to be able to work or no-one will date them ( who on earth will give such a huge bill a chance when it comes to the ol' love-life. Try following your dreams with zero cash as your ill partner is so expensive ). And I'm not the only one worried here.
The Disabled are typically at the bottom of the pile in the dating game anyway. We can't up & leave for Australia, are usually not that wealthy, and can't dance all night like healthy people can. So it's much harder to score a date anyway. Now add to that us now being a lot poorer and it, well, it's gonna get pretty lonely for us.
Is this fair?
With the Spare Bedroom cuts to benefits, nick-named the Bedroom Tax, we also have a problem. 2/3 of those effected are Disabled.
The Disabled use these spare rooms for a variety of reasons: From having a place for their partner to sleep in as they can't share a bed, to storing vital life-saving equipment. The Govt are ignoring this and are cutting their benefits anyway. Some disabled will starve if they do not move, and there is nowhere to move to.
It is recognised that there is a massive shortage of places to move to for those being forced to down-size. Hence why I say there is nowhere to move to. Gavin Barwell has admitted that The Govt need to do better here.
All the time this benefits cut happens the Disabled will either get hungrier or build up rent arrears ( that could lead to eviction ). Is this fair?
The Elderly are being let off on the Bedroom Tax, even though many are under-occupying ( they have spare bedrooms ) for real. Is this fair considering what's being done to The Disabled? Should the elderly be let off instead of being moved to Granny-flats? Should the Disabled be let off as well?
So that's the evil Benefits Culture. Not so evil is it? It's actually pretty fair. Well, it was before the current Govt came in. It needs some work sure, but many who get Benefits actually deserve it.
With the elections coming it's important people know the truth on this one.
Christian Wilcox is the Chair of the Croydon Mental Health Forum ( politically neutral ), an NHS Executive ( Advisory ) for the South London & Maudsley ( politically neutral ), and works for the Labour Party privately.
