The Future of the Welfare State

John Humphrey’s look at the future of the Welfare State managed to trot out examples of all the stereotypes that are portrayed in the media when the subject of benefits is brought up.

There was the family living in a house in Islington which had a rent of £2300 – it didn’t look like a particularly luxurious house to my northern eyes. London house prices are ridiculous and some allowance within the system must be made for the huge weekly sums families have to pay. Should families who are on housing benefit already have to uproot their children and lives to move to another area because their housing benefit will be capped – somehow that doesn’t sit well with me.

The person who resonated most with me was the single mother at the Merseyside jobs club. She was trapped in the cycle of trying to find a job which fitted in with available hours of childcare – I empathized with her argument that she couldn’t get childcare which started early enough and which she could afford, as well as the frustrating reality that she would only be worse off if she took a job. Her tears were genuine. We need to bring down the price of childcare in this country and make it  more flexible in terms of opening hours and availability of places. I relied on family to help with my childcare when I returned to work as there were no part-time child care places available but many families don’t have anyone who can help.

The incapacity benefit claimant was less convincing to me and of all the people interviewed came across as the one who had the biggest sense of entitlement. She made little comment about wanting to get back to work which gave the impression that a long-term stint on benefits was fine by her. This is one of the trickiest areas of benefit reform for the government. It needs to be handled sensitively and fairly. Many many claims for incapacity benefit are being dropped before they reach the stage of a medical – is this evidence that the claim was invalid or that people are in despair and can’t fight the new system?

Tax Credits introduced by Labour have been a contentious issue from day one. It is frustrating that we know another large family in which only one parent works who brings in a huge amount of money in Tax credits whilst in our household my husband works long hours as a teacher for not much more money. Tax Credits can be a disincentive to promotion – when considering at a step up the teaching Upper Pay Scale we found ourselves asking “what would it do to the tax credits?” – our finances are so finely balanced that a pay rise which meant a drop in Tax Credits or a cut in child benefit would be a disaster. This is not the “go for it” conversation that a family should be having when discussing whether to try make progress.

The cutting of child benefit to higher rate tax payers is something I am not in support of as a blanket policy. A family on just over £43,000 a year with several children and living in the South-East will not be in a position to manage without child benefit. The anomaly where a family with one earner only who is in the higher tax bracket loses child benefit but a family with two earners paying lower tax but an income of £60,000 etc can keep it must be addressed. A system where very high earning families are allowed to nominate a charity to receive their child benefit is one alternative.

Next Budget day will be a nail-biting one for many families around the country. The months ahead will be difficult as changes to the welfare state begin to kick in.Like or dislike the coalition government I admire their courage in tackling one of the most expensive bills on the table –  it’s political dynamite!


6 thoughts on “The Future of the Welfare State

  1. interesting post, i didn’t see the bbc program, but will try to catch it on a later date, i agree with you about childcare costs, it must be a nightmare for thoes who really want to work, but cannot, the rent capping is another nightmare to come, will wait to see the outcome of that will work out.

  2. The rent capping is a real nightmare – how do you unwind what has already begun? Until rents in the South are reduced (which isn’t going to happen) or more social housing is built (which at the moment isn’t going to happen either) then rent capping will force families to move.

  3. Very good read. I too was one trapped in the cycle of benefits and childcare. I have 6 kids, so imagine the childcare costs for that bunch. Thankfully I found my way out through self employment and work from home 90% of the time, and the other 10% dad is there to help out.

    The government, no matter which one is in power, have a very tough job when it comes to the welfare. Damned if they do and damned if they dont !!

  4. Hi RillyRoo – I think self employment is the way forward for a lot of women in that it means you can work around your children. I was self employed for 4 years and it was very hard work but enabled me to leave teaching. I think I will be heading back to self employment myself before very long.

  5. I very much enjoyed this blog having just done my own take on the programme. However, whilst I agree with your views on tax credits when addressing a step up in pay (it does seem incredibly unfair that you can earn more and take home less), is there not a reason that those sterotypes were the ones featured on the programme? Possibly because people who are on long term income support or jobseekers have been brought up in a world where that is acceptable, and they have no real intention of wanting to return to the world of work? Whereas people who have worked all their lifes and momentarily require state help take both the financial aid and do all they can to return to work?

  6. A good post – I think a lot of the problems with benefits come from people not understanding how they work, but then, you can’t really blame them, it is so complicated.

    For example, we rent a fairly cheap house – we looked round several, and within half an hour bus ride of school, nursery and the inlaws (who help us loads with childcare), this was one of only two that was suitable (within our price range, near a good bus route, enough bedroom space for a couple, a child and a baby in a cot). Both houses were exactly the same price, but one had two bedrooms, no garden and very little storage, and the other had four bedrooms, garden and storage, so of course we went for the second. Housing benefit for our family size is £195 a month short, but would have been for both, yet we are now one of those terrible families claiming benefit for a house that is bigger than we need.

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