Benefits are often an essential subsidy to low wages rather than an alternative to work.
George Osborne’s speech today dwelt on a familiar theme. In terms of locating those areas where the latest round of cuts will fall, he singled out welfare.
In order to justify this, he once again attempted to draw a distinction between “people who work and pay taxes” and those on welfare.
Unfortunately, the line is nowhere near as clear cut as Osborne likes to make out.
The chancellor is in fact avoiding an uncomfortable truth: many people receiving benefits are in work. In fact, in 2012 this was nearly a fifth – 19.4 per cent – of the total of 5,072,264 claimants. Only 1 in 8 housing benefit claimants were unemployed.
Hardly a ‘culture of entitlement’.In the past David Cameron has said that ‘you shouldn’t be better off out of work than in work’ – an undisguised attempt to play taxpayers off against so-called benefit scroungers. And yet benefits today are for many an essential subsidy to low wages and not, as Cameron makes out, an alternative to work.
As for Working Tax Credits, the welfare minister Chris Grayling has already pleaded guilty to the charge that the government is penalising the working poor. Osborne’s removal of tax credits for those working fewer than 24 hours a week will leave the average couple with children up to £3,870 a year worse off.
The latest attempt to paint welfare recipients as distinct from ‘hardworking families’ highlights once again the government’s failure (and unwillingness) to understand the plight of the working poor.
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