Friday, 12 April 2013

Time to get the benefits system back on track

People have talked about welfare reform all my life time but the current government has made the most concerted effort yet to try to actually change things. The most important change is to simplify the system so that many former types of support are merged into one single "universal credit". Support will be tapered so that it always pays to work rather than get by on benefits and it should always pay to take on more hours and move to full time from part time work.

I think this is crucial because the major fault over the last decade or so has been the complexity of the system. People who want to do the right thing and work longer suddenly find that by working, say, 19 hours rather than 16 hours, they lose more benefits than the extra work brings in, so they can literally be worse off. It's bonkers and we need to change the system so that there is a gradual taper that gives people support when they need it but creates the persistent incentive to get on in life, work longer hours and earn more.

Some of the other changes proposed by the government are more controversial but I think they are also right. I really don't understand why anyone can disagree with the idea of capping benefit receipts at £500 per week, the level of the average earnings for working families in Britain, least of all in Cornwall where far fewer families take home that amount anyway. It can never be right that families living on benefits can receive more than those families where parents go out to work, support their own families and pay their taxes. Equally, the decision to increase benefit payments by 1 percent a year has also caused a storm, but most people working in the public sector have had a pay freeze for several years already.

MPs routinely encounter really frustrating cases of families living in overcrowded housing where teenagers lack the privacy of their own room or where older children struggle to do their homework because of a noisy environment. So why do we pay some people extra Housing Benefit so they can keep spare rooms standing empty? It is never going to be easy but we must think again about the unintended consequences we have created in the benefits system.

George Eustice can be contacted at george.eustice.mp@parliament.uk or 1 Trevenson Street, Camborne, Cornwall TR14 8JD or by telephone on 020 72197032.