Last year, the government spent £192 billion on welfare payments. This incredible figure exceeds the combined total spending for education (£50 billion), health (£98 billion) and defence (£35 billion). The welfare bill increased by 45 per cent in real terms in the decade to 2009/10.
Clearly this level of spending and growth is unsustainable especially when compared against that on the core government services mentioned above. With this background, it is entirely understandable that national politicians should want to look at how the money is spent. This quickly takes us into the area of universal benefits, the principle that everyone, regardless of income, should be entitled to claim and receive support.
Labour Leader, Ed Miliband, has said that he supports this principle and speculates that there are not that many millionaires to withhold benefits from. He is surely wrong on both counts. In a time of such economic challenge, universal benefits represent an obsolete dogma and political leaders refusing to consider change should demonstrate a greater intellectual agility. His assumption about millionaires ignores the evidence base pointing to many people receiving large incomes and salting wealth away. Look at the problems that we still have with tax evasion and consider too the growth in the number of second homes. Universal benefits are clearly unjustifiable and somebody had to say so.
When we claim benefits, our income sources must be considered. That is only fair to ensure that money is targeted effectively to those most in need. This measure alone is not enough to reform the welfare system. There are other fundamental problems to be addressed.
Over time, as more benefits have been introduced, we have created a massively complex system of calculation and implementation. This system can also create a total benefits payment that might significantly exceed an average income that could be derived by going out to work.
While simplification of the benefits system is highly desirable, it will take time. At least the government is addressing the issue of the total benefits bill through the proposed Universal Credit system. Under this measure, there will be a cap on the total welfare benefits that can be received although households with a Disability Living Allowance claimant will be exempted from this policy. Similarly, Working Tax Credit claimants will be excluded from the cap.
This is a ground-breaking new idea which will mean benefits continuing to support the most vulnerable but not providing that support in an overlapping way for the same specific social issue. It will be much less likely that we have the anomaly of a total benefits package being rather greater than the average employment package for a given area.
Councillor Bob Lanzer, Leader of Crawley Borough Council
13th October 2010