Parliamentary Sketch – a taxing debate

Posted on: 27th September 2012

In a week when The Sun newspaper finally admitted, after 23 years, that its front page story under the headline “The Truth” was in fact a shameful pack of lies, I hope the British public will be a little more wary about the way some of their national news headlines are packaged. Humdrum doesn’t sell national newspapers, so ‘incredible’ stories may often be less credible than they seem…

One credible story this week is news of the Government’s challenge to control the £230 billion welfare budget at a time when dependency is, if anything, increasing.

To do so you have to side step the lazy politics: of claims that these are “handouts” to “workshy benefit scroungers”; that its rich boys who are cutting the incomes of the poorest; and that the whole system is rife with fraud.

However, Republican Presidential candidate, Mitt Romney, did let the cat out of the bag this week when he said that “my job is not to worry about those people” (i.e. “those dependent on the State”). He was saying what a lot of those on the right of politics often think but are unprepared to say. The truth, however, is that most who are “dependent on the State” are only dependent for part of their lives, retirement, periods of sickness or worklessness, etc. Many benefits, go to hard working people who’s wages are too low to pay their rent or to feed their families; hence housing benefit, income support, tax credit, council tax benefit, etc. It’s clear from the many people I meet, it’s not that locals are “work shy” but that wages are often too low to take people out of abject poverty.

The Government is right to try to find the right balance so that “it pays to work”. Its announcement that it may not increase benefit by more than wages is fair, providing that wage settlements themselves are fair, whether you be a banker or a cleaner.

The truth is that the whole country has now become dependent on welfare – without housing allowance/benefit the private rented sector would collapse; without tax credits and income support the employment market would go haywire, etc.

So the herculean challenge is to cut the welfare bill without causing unacceptable hardship; ensuring that, where there is work, it pays to take it. The debate on the management of the welfare budget will tax us all.

18th September 2012