How much should we pay in benefits?

How much do you think we should pay to those who are not working? How far should the state go in helping and checking up on people’s wish to find a job?

by Sir John Redwood MP on 3 April 2013 17:41

When Iain Duncan Smith was asked if he could live on £53 a week he answered instead of sidestepping it as a politician is expected to do with such a question. The better answer for an MP and Minister on a good salary faced with such a question would be to say “I do not want anyone to have to live on £53 a week, which is why we are promoting work to raise people’s living standards, and why we have a range of benefits and pensions for the disabled and elderly higher than £53 a week”.

The Coalition government has pointed out that benefits to people of working age amount to £90 billion a year. That takes one sixth of all the taxes we pay. Most people agree that it would be better if more people on these benefits could find work, and most people agree it should always make people better off to opt for work rather than for staying on benefits, where work is available.

The government has made some changes to try to make it more worthwhile to work. Taking many people out of income tax altogether is the positive way of doing this. When people return to work they now face benefit withdrawal but no income tax bill at lower income levels.

The government has also introduced two caps to benefits. The first is a cap to Housing Benefit. No-one can now claim more than £400 a week in Housing Benefit. So if someone living in a very expensive rented property needs help with the rent, they now have to find a property at a lower rent if they want all the rent paid by the state. The second is a cap on total benefit payments, at £26,000 a year for families and £18,000 a year for a single person.

The £26,000 a year cap is much higher than the £53 a week of recent debate, working out at £500 a week. Neither figure is representative of what many on benefits receive.

How much do you think we should pay to those who are not working? How far should the state go in helping and checking up on people’s wish to find a job? The level of benefits is designed to help people over a rough patch, not to become a lifestyle choice. Many people on relatively low benefit incomes will go on to find work and enjoy better lifestyles as a result.

In all the debate between the Churches and the government, Labour is reluctant to engage. We do not know which, if any, of these Coalition measures a Labour government if elected would want to reverse. Labour just keeps complaining about the cut in the 50p tax rate to 45p. The party remains silent when asked why it now favours a 50p tax rate when it means the rich pay less tax.

They remain silent when asked why for practically their whole time in government they correctly thought 40p was a better top rate. They remain silent on whether they would restore the 50p tax rate if in office. They just try to whip up anger over the 50p tax rate to avoid discussing the tough issue of just how much we should pay people of working age who do not have a job and how we should reform our welfare system.

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