Last week on the blog I wrote about how I though Labour was wrong to oppose the Government's plans to cap certain benefits at 1% (not including benefits for the disabled, or pensions which will rise at 2.5%)
The graph below, from the independent Institute for Fiscal Studies, shows that at the moment benefits have actually increased much more than wages. Our plans (in yellow) simply bring benefits back into line with wages.
As well as the fairness argument I think its also important to recognise that when benefits increase much faster than wages that creates a real trap for low paid workers. For many years under Labour it made more financial sense for some people to be on benefits rather than to work. We are changing that with the Universal Credit and Benefit Cap to make sure work always pays. Limiting the latest benefits rise to 1% is part of restoring that balance.
I think you make some fair points about benefit increases. I’m generally in favour of this. But it needs to be done carefully.
ReplyDeleteIf you are in work and you see benefits rise faster than you wages you won’t be pleased.
But then again, 72 pounds per week isn’t a lot to live on - and make steps to find work. In Northumberland you’re going to need to have transport to find a job. It can’t be easy to eat, and run a car for 72 pounds a week.
Personally I’m of the view that there will be unintended consequences to capping benefits. And whilst I feel it has to happen, let’s be under no illusion that crime won’t rise, because I think it will.
As you’ll be aware, it costs 41k to keep someone in prison, yet it is only 3.7k to keep someone on the dole. As food prices go higher, it must be incredibly tempting for someone out of work to indulge in some sort of criminal activity. And putting them into prison will cost the poor old tax payer much more than to keep them on the dole.
There also seem to be reports of teachers in schools bringing food to school to feed undernourished children. I fear rises in diseases once thought eradicated.
But, like I say, the benefit bill has to be brought under control. But doing it, and expecting nothing else to happen is rather naive in my opinion.