TaxPayers’ Alliance welfare proposals save little money, but add to misery

The Taxpayers Alliance has released a new report on welfare dependency, but the proposed solutions do little to save costs and only adds to hardship.

The right wing organisation the TaxPayers’ Alliance has released a new report on welfare dependency, arguing that the amount the country spends on benefits is too high and it is necessary to implement a ‘Work for Dole’ scheme.

The report’s proposed Work for Dole scheme will do little to solve the costs it moans about and only add to the hardships of the poorest in society.

The report begins:

“Over the past 50 years, welfare spending has relentlessly grown and now consumes 28 per cent of all government spending. 57 per cent of this goes on benefits for working age people.”

At first glance the TaxPayers’ Alliance’s picture of a Britain suffering the costs of paying for benefit claimants seems shocking, but the statistics reeled off here – similar stats often emblazoned in Daily Mail articles – are not so shocking when you take a look at the detail.

So, where has the 28% figure come from?

Yes 28% of government spending goes on welfare, but welfare isn’t just made up of the benefits this report attacks. A huge amount of welfare spending, 43%, actually goes on pensions. So the author could have simply started off with the less startling fact that 16% of all government spending goes on ‘benefits for working age people’, but I guess this is a less eye-catching figure. It’s good that in the second line the TaxPayers’ Alliance does admit that only 57% of this goes on the type of benefits it focuses on, but it really makes you wonder what was the necessity of the first line…

Anyway, 16% of total government spending is still a vast figure so it’s worth investigating what exactly all this money goes on.

Are taxpayers funnelling money to the lazy?

What do these ‘benefits for working age people’ involve?

The list of benefits that the welfare budget goes to (excluding pensions) includes:

  • housing benefit
  • child tax credit
  • disability living allowance
  • child benefit
  • income support
  • working tax credit
  • job seekers allowance
  • employment support allowance

The largest amount of money on this list goes on housing benefit and child tax credit, which are both benefits that are open to people who are in work. This somewhat detracts from the picture of a Britain that can’t help giving money to the workless.

It is also not as though these benefits are lining the pockets of the idle. For example, housing benefit goes straight to landlords. Over the years spending on housing benefit has risen by a lot but this is more a result of successive governments failure to build new houses rather than any upshot in people happily revelling in welfare dependency. The housing crisis in this country has contributed to a great many social and economic problems and one of these is the huge growth in spending on housing benefit.

So what is the Taxpayers Alliance’s solution?

Their solution is ‘Work for the Dole’. This scheme involves anyone who has been claiming Universal Credit for a certain period of time to undertake activity like clearing parks or graffiti, working for a charity, participating in a training programme or work experience. The amount of work you are expected to do depends on whether you are in a job, how many hours you work or whether you have childcare commitments. The report says that

“the programme shall continue indefinitely, until either (i) the person is working more than 30 hours per week (or their benchmark if lower) or (ii) until they stop claiming Universal Credit benefits entirely.”

Work for the Dole is very similar to the government’s own much despised Workfare policy. Both schemes involve people working without receiving a wage. And it is fair to say that both schemes have major drawbacks. For example, jobs like clearing parks or cleaning graffiti are that – jobs. People who do these socially valuable activities deserve proper pay. To force unemployed people to do them is not only punitive and unnecessary, but is patronising to people whose job it actually is to clear parks or clean off graffiti. It also ignores the fact that most jobseekers are actively seeking jobs. It is not their fault, and they should not be penalised, for an atrocious job market.

The Taxpayers Alliance’s proposals also includes the brutal specification that anyone who ‘is not compliant with Work for the Dole activity requirements’ will ‘have all of their Universal Credit payments suspended.’ It even goes onto admit that there might have to be changes to, or an opt out from EU laws to achieve such a punitive policy.

We have seen a huge rise in the number of food banks in the UK in recent years, and there is strong evidence that this is connected to the government’s welfare reforms. This means that we are already seeing the disastrous effects of a more severe benefits system. Another round of even harsher benefits reforms – as proposed here by the Taxpayers Alliance – is likely to drive even more people to use food banks.

Will the Work for the Dole save money?

The report boldly claims that its proposed ‘Work for Dole’ scheme will make annual savings of £3.51 billion a year . When you look a bit closer you realise that this is a saving of 4.7% of expenditure on benefits included in the Universal Credit umbrella and also housing benefit and child tax credit. So this means it is not even a saving of 4.7% of the non-pensions welfare budget, let alone 4.7% of the welfare budget as a whole. If you are seriously looking to save costs, is piling on the pressure on a very vulnerable group of society a sensible solution? Evidence shows that big companies avoid paying taxes to the tune of £5.5 billion, but we don’t hear the Taxpayers Alliance harping on about this.

After all we read from the Taxpayers Alliance about the horrors of our bulging welfare state it is a little disappointing that their solutions amount to relatively little in financial savings for the taxpayer, but contribute so much more to the hardship faced by the poorest members of society.

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